SI 01140.240: U.S. Savings Bonds

changes
←	*	→

~~Effective Dates: 09/23/2014 - Present~~
Effective Dates: 11/27/2017 - Present
TN 25 (06-12)
SI 01140.240 U.S. Savings Bonds
A. Background on savings bonds
U.S. Savings Bonds are obligations of the Federal government. Unlike other government bonds, they are not tradable in the usual sense through brokers or security traders. The U.S. Department of the Treasury (hereafter “Treasury”), redeems bonds directly online or converts and redeems savings bonds only through authorized financial institutions. The form of the savings bond determines the method of conversion or redemption.
Treasury maintains electronic records of U.S. Savings Bonds through New Treasury Direct (also referred to as TreasuryDirect.) TreasuryDirect is an online system for purchasing, holding, and conducting transactions in Treasury securities. Treasury also uses the terms “account-based” and “book-entry” to describe electronic savings bonds.
This table shows the transition schedule for paper bonds to electronic form.
Date
Treasury action
October 17, 2002
Began offering electronic Series I U.S. Savings Bonds
May 8, 2003
Began offering electronic Series EE U.S. Savings Bonds.
December 31, 2011
Stopped issuing most U.S. Savings Bonds in traditional paper bond form
January 1, 2012
Began offering U. S. Savings Bonds Series EE and I for purchase only in electronic form.
NOTE: Treasury still issues Series I bonds in paper form but only as a Federal tax refund. The public cannot purchase Series I bonds through a financial institution. For more information about Federal tax credits and refunds, see
* SI 00830.060 Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) Payments Exclusions, and
* SI 01130.676 Federal Tax Refunds and Advanced Tax Credits for SSI Resources.
B. Policy on ownership of paper savings bonds
Treasury allows the following three ways to title paper U.S. Savings Bonds:
* sole owner,
* co-owner, and
* beneficiary registration.
1. Sole owner
The individual owns the U.S. Savings Bond if only his or her name appears on it. The Social Security Number shown on a bond is not proof of ownership.
EXAMPLE: A U.S. Savings Bond title reads, “John Smith.” Only John Smith can cash that bond.
2. Co-owner
For Supplemental Security Income (SSI) purposes, the co-owners of a U.S. Savings Bond own equal shares of the redemption value of the bond.
EXAMPLE: The U.S. Savings Bond reads, “John Smith or Mary Smith.” Mary and John are co-owners. Either owner can cash the paper bond without the knowledge or approval of the other. When one co-owner dies, the bond becomes the sole property of the surviving co-owner.
3. Beneficiary registration
Beneficiary registration means that there are two people named on the paper savings bond, the owner and a beneficiary. “Payable on Death” or “POD” is shown between the names on the face of the savings bond. The owner has sole ownership rights during his or her lifetime. Upon death of the owner, the beneficiary becomes the owner of the savings bond.
EXAMPLE: The bond title reads “John Smith Payable on Death Mary Smith.” Mary Smith may only cash the bond if John Smith has died.
C. Policy on ownership of electronic savings bonds
Treasury allows the following three ways to title electronic savings bonds:
* single owner,
* “with,” and,
* beneficiary registration.
1. Single owner bond
One individual owns the bond and only that individual’s name appears on Treasury's record for that electronic savings bond. Treasury maintains a record of bond ownership in the owner’s online account in TreasuryDirect. Treasury creates an account number for the account holder who purchased the bond.
EXAMPLE: The bond registration reads, “John Smith.” Only John Smith can cash that bond. In order to do so, he must have a TreasuryDirect account and access the account using his account number, password, and any additional authentication Treasury requires.
2. “With” bonds
A “with” bond is a bond whose titling lists an owner with a secondary person. The bond owner may grant transaction authority to the secondary person that allows the secondary, or “with,” person to cash the bond. Transaction authority means that the bond owner gives the secondary person the authority and access necessary to conduct online transactions involving bonds in the name of the owner. The owner can grant transaction authority at the time the bond is purchased, or later. Once the secondary person receives the authority, he or she can conduct transactions involving those bonds using his or her online account in TreasuryDirect.
However, even with transaction authority the secondary person is not an owner of the bond. The owner can revoke this authority at any time without prior notice to the secondary person. The owner can also remove the secondary person from the bond at any time without that person's permission. Upon the death of the owner, the “with” person becomes the owner.
EXAMPLE: The bond reads, “John Smith with Mary Smith.” Mary is not an owner, but if she has a TreasuryDirect account and John gives her transaction authority, she could redeem the bond for John. If John dies, Mary becomes the sole owner.
3. Beneficiary registration
The bond owner can name a beneficiary of the electronic savings bond. During the bond owner’s lifetime, he or she has sole ownership rights and is the only person who can redeem the bond. When the owner dies, the beneficiary becomes the owner of the bond and can cash the bond.
EXAMPLE: The savings bonds reads, “John Smith Payable on Death Mary Smith.” Only after John Smith dies does Mary Smith become the owner.
D. Policy on a bond's status as a resource
1. During mandatory retention period
* During the 6-month mandatory retention period, U.S. Savings Bonds (including Series EE, and Series I) issued prior to 2/1/2003 are not resources. They are resources (not income) as of the first moment of the seventh month.
* During the 6-month mandatory retention period, Series HH U.S. Savings Bonds are not resources. Treasury issued the last HH bond in August 2004. For more information on Series H and HH bonds, see SI 01140.240E.3.c. (in this section).
* During the 12-month mandatory retention period, Series EE and Series I U.S. Savings Bonds issued on or after 2/1/2003 are not resources. They are resources (not income) as of the first moment of the thirteenth month.
NOTE: The mandatory retention period is the same for paper and electronic Series EE and Series I bonds.
2. Access for redemption of paper bonds
Physical possession is a requirement for redeeming paper U.S. Savings Bonds. If a person other than the SSI claimant, recipient, or deemor has possession of the bond but will not relinquish it, the bond is not a resource for SSI purposes. This policy applies to solely held and jointly held paper U.S. Savings Bonds. (For an example pertaining to jointly held bonds, see SI 01120.010D.4.)
3. Access for redemption of electronic savings bonds
Although physical possession is necessary for redemption of a paper bond, owners of electronic bonds have no physical bond to redeem. The owner of an electronic savings bond can redeem it at any time after the mandatory initial retention period if the owner has a TreasuryDirect account and transaction authority.
a. Single owner bonds
The owner of a single owner bond can redeem the bond with a TreasuryDirect account and access codes.
b. “With” bonds
The owner of a “with” bond can redeem the bond with a TreasuryDirect account and access codes. The secondary person, or “with” person, can redeem the bond only if the “with” person has his or her own TreasuryDirect account and the owner gives the “with” person transaction authority.
c. Beneficiary registration
The beneficiary of a beneficiary registration account can redeem the bond only after the owner dies and only if the beneficiary has a TreasuryDirect account and access codes.
d. Gift bond
“Gift bond” describes any bond in which the registered owner is not the purchaser. If the purchaser is holding the bond as a gift in his or her TreasuryDirect account, the registered owner needs possession of the access codes and a TreasuryDirect account to redeem the bonds. If the purchaser will not grant transaction authority to the registered owner, the bond is not a resource for SSI purposes.
Once the purchaser transfers the bond to the registered owner’s TreasuryDirect account and releases the access codes, it becomes a resource to the owner. A gift bond is generally in the form of a single owner bond and often is the only method a person can use to place bonds in a minor’s name.
4. Conversion of U. S. Savings Bonds from paper to electronic form
Treasury, through TreasuryDirect, encourages owners of paper Series EE and Series I U.S. Savings bonds to convert them to the electronic form. To convert paper bonds to electronic bonds the owner must have physical possession of the paper bond and establish a TreasuryDirect account.
Treasury, through TreasuryDirect, encourages owners of paper Series EE and Series I U.S. Savings bonds to convert them to the electronic form. To convert paper bonds to electronic bonds the owner must have physical possession of the paper bond and establish a TreasuryDirect account. If the paper bond has been lost, stolen, or mutilated, the Department of the Treasury has a replacement process. The claimant or recipient can access the TreasuryDirect website to request a substitute electronic bond using the following links:
* Replacing a Series EE bond
* Replacing a Series I bond
NOTE: Treasury last issued Series H and Series E savings bonds in December 1979 and June 1980 respectively and only in paper form. They have all reached maturity, that is, their maximum value, and no additional interest is due. Therefore, Treasury will not convert Series E savings bonds from paper to electronic form. Treasury never converted Series H to electronic form.
Consider the information in the following chart when making resource determinations:
Series
Mandatory retention period
Month bonds first counts as a resource
Percent value at time of issue
Last month of issue
Can be converted to electronic bond
Series EE – electronic
12 months beginning 02/2003
6 months prior to 02/2003
1st day of 13th month
1st day of 7th month
100% currently
Currently issued
N/A
Series EE – paper
12 months beginning 02/2003
6 months prior to 02/2003
1st day of 13th month
1st day of 7th month
50%
12/2011
Yes
Series I – electronic
12 months beginning 02/2003
6 months prior to 02/2003
1st day of 13th month
1st day of 7th month
100%
Currently issued
N/A
Series I – paper
12 months beginning 02/2003
6 months prior to 02/2003
1st day of 13th month
1st day of 7th month
100%
After 12/2011 Issued only as tax refund cannot purchase
Yes
Series HH – paper only
6 months
1st day of 7th month
100%
08/2004
No
Series H – paper only
6 months
1st day of 7th month
100%
12/1979
No
Series E – paper only
6 months
1st day of 7th month
75%
06/1980
Not if mature
E. Procedure for developing savings bonds in initial claims
1. How to determine ownership
a. Paper bonds
Ask the individual to submit any paper bonds in which he or she has an ownership interest. Use the name(s) shown on the bond to determine ownership per SI 01140.240C.1., SI 01140.240C.2., or SI 01140.240C.3. (in this section).
b. Electronic savings bonds
When an individual alleges ownership of electronic savings bonds, you must document the bond ownership. Ask the individual to printout a record of the individual's bond holdings from the Current Holdings section of his or her TreasuryDirect account. (For instructions, see SI 01140.240E.3.b. in this section.)
2. What to do when an individual does not have possession or access to the savings bond(s)
If the individual alleges that he or she cannot submit a bond because a co-owner or other individual has physical possession of the paper bond, then you must obtain a signed statement from the individual possessing the bond.
If the individual alleges he or she cannot gain access to an electronic bond because the individual holding the bond in his or her TreasuryDirect account refuses to grant transaction authority or deliver an electronic gift bond, then obtain a signed statement from the holder or the other individual controlling access to the bond.
Whether the bond is paper or electronic the signed statement of the individual holding or possessing access to the bond verifies that he or she:
* has physical possession of the bond or holds the bond in his or her Treasury Direct account, and
* will not allow the individual to cash the bond or will not cash it, and
* will not give the individual the ability to redeem it.
3. How to determine the value of bonds after the retention period
a. Series E, EE, and I bonds (paper)
Treasury no longer sells paper Series E and EE bonds. Treasury ended sales of Series E bonds in June 1980. Series E bonds sold at three quarters of the face value.
Treasury ended the sale of paper Series EE bonds in December 2011. Paper Series EE bonds sold for one-half of the face value of the bond.
Treasury no longer sells paper Series I bonds. Series I bonds sold at full face value with interest accruing to the redemption value. When the individual redeems the E, EE, or I bonds, the redeemed amount includes accrued interest added to the purchase price. Treasury made no periodic interest payments on E/EE/I bonds. To determine the value of a paper bond:
* Use the Savings Bond Calculator or the Comprehensive Savings Bond Value Table on the U.S. Bureau of Public Debt's Internet web site at: http://www.treasurydirect.gov/BC/SBCPrice; or
* Use a current copy of the Table of Redemption Values for U.S. Savings Bonds; or
* As a last alternative, obtain the value by telephone from a local bank and record it on a Report of Contact (RC). The bank will need the series, denomination, and issue date.
NOTE: For MSSICS cases, you may access the Savings Bond Calculator by selecting the link above the monthly values table in the Stock, Bond, or Mutual Fund (RSTB) page.
b. Series EE and Series I U.S. Savings Bonds (Electronic)
Electronic Series EE and Series I bonds are always issued at their full face value. As interest accrues, the bond's value is the face value plus the accrued interest. Unlike paper bonds, there are no set denominations for electronic Series EE and Series I bonds. A person can purchase a bond in any amount between $25 and $10,000. It is not possible to verify an electronic bond's current value using the Treasury's online “Savings Bond Calculator” or the Table of Redemption Values. To determine the value of an electronic bond:
* Ask the individual to print out his or her “Current Holdings” list from the Treasury Direct web site. Verify the total current value of the electronic bonds using the Current Holdings list.
* Use the “Current Holdings—Summary” page to verify the number of bonds, face value of the bonds, issue dates, confirmation numbers, and the value of individual bonds.
* If the individual alleges he or she cannot obtain the Current Holding list because he or she has lost the password or account number, the individual must contact Treasury to retrieve them.
NOTE: Treasury protects the Current Holdings list by password, account number, and other authentication information, so only the account holder can access this information. If the owner of the bond is also the purchaser, he or she only needs his or her TreasuryDirect account number, password, and other access authentication information to access the account and retrieve the Current Holdings list.
EXAMPLE: Mr. Johnson purchases an electronic Series EE savings bond for $457.32. The face value of that bond is $457.32 and interest will accrue on that amount. To verify ownership and value of the bond, the claims representative (CR) asks Mr. Johnson to obtain his Current Holdings list and Current Holdings Summary on the TreasuryDirect web site. From the Current Holdings Summary, the claims representative verifies the face value as $457.32 and that, with accrued interest, the current value of the bond is $491.50. The CR documents $491.50 as the countable resource value for SSI purposes.
c. Series H and HH bonds
Treasury no longer issues Series H and HH U.S. Savings bonds. These bonds were available only as paper bonds. Treasury issued them at their face value, but the bonds did not increase in value. Instead, Treasury made interest payments to the owner each six months. Consult Dividends and Interest SI 00830.500 to determine whether this counts as unearned income. After the initial 6-month retention period, the redemption value of a series H or HH bond remained its face value. Contact the Treasury Department to verify the value of distributions from H or HH bonds. The address to contact is: Series HH/H Bureau of the Public Debt Division of Customer Assistance P. O. Box 2186 Parkersburg, WV 26106-2186
4. How to document evidence of savings bonds (paper and electronic)
Follow this procedure for recording evidence of paper and electronic savings bonds.
* Record each bond's serial number (or issue confirmation number), denomination (or initial bond amount), series, issue date, and redemption value on the EVID screen in the “Shared Process Menu” which is selection #4 on the SSA Main Menu. See Electronic Evidence Documentation and Retention GN 00301.286.
* If it is not feasible to use EVID, document the electronic file with a photocopy or certification of the bond(s). For the legal requirements for photocopying U.S. Government obligations, see SI 01140.010G.
Unlike paper bonds, electronic savings bonds do not have a serial number. Instead, each electronic bond is assigned a sequential “issue confirmation number” that will appear on the Current Holdings list. A bond owner's first bond will have the issue confirmation number “IAAAA” followed by “IAAAB” for the second bond, “IAAAC” for the third bond, etc.
5. How to record bond information in non-MSSICS cases (paper and electronic)
In order to record bond-related information in non-MSSICS cases, follow these steps:
* Use the Remarks field on the Supplemental Security Record (SSR) to record the number of bonds, the denominations or amounts, series, issue dates, and redemption values.
* Input RE21 in the CG field.
EXAMPLE: The claimant owns two series EE bonds both issued in October 2000. One of the bonds is a $100 denomination and the other is a $200 denomination. The claims representative (CR) codes the Remarks field as follows: “DI owns 2 series EE bonds. $100 bond issued 10/00 value is $61. $200 bond issued 10/00 value is $119.” Then the CR inputs RE21 in the CG field.
6. How to record bond information in MSSICS cases (paper and electronic)
Use the following steps for cases processed in MSSICS:
* Record the savings bond's serial number if paper or sequential number if electronic in the Description field of the Stock, Bond, or Mutual Fund (RSTB) page.
* Record the redemption value of the savings bond for the applicable months.
* Repeat the process if the individual has multiple bonds.
* Use the CMSC screen to input the “RE21” code, but do not code any additional CG field information about the bonds.
7. How to follow-up, if appropriate
If an individual owns a U. S. Savings Bond (paper or electronic) which, in the future, may cause countable resources to exceed the limit, re-contact the individual shortly before the value of the bond becomes available or may cause ineligibility. Set an RT diary as a reminder to re-contact the individual using either MSSICS or Direct SSR Update. (For additional information concerning posting diaries, see SM 01301.205.)
EXAMPLE: During a redetermination in April 2009, the recipient alleges he purchased an electronic EE series U.S. Saving Bond in December 2008. The amount of the bond was $740.25. The earliest the recipient can redeem the bond is December 2009, and the bond counts as a resource for SSI the following month, January 2010. The CR sets an RT diary for November 2009 and asks the recipient to verify the amount of the bond by sending in the Current Holding Summary for the bond in December 2009.
F. Procedure for developing savings bonds during post-eligibility events
Unless otherwise stated, the following procedures apply to both paper and electronic savings bonds.
1. When the existing documentation supports the allegation
If the individual's allegation of the number, type, issue date, and denomination of bonds matches the EVID screen, MSSICS, the SSR Remarks field, or in a prior file available in the field office, accept the allegation. It is not necessary to have the individual resubmit the bonds.
If the mandatory retention period has elapsed for one or more of the bonds, determine the current redemption value and update the EVID screen, MSSICS, or the SSR Remarks field with the current value.
2. When the CG field agrees with the individual's allegation
In the past, only the CG field was available to document savings bonds and some cases may still have bond documentation in the CG field.
If an individual's allegation of the number, type, issue date, and denomination of bonds matches the CG field, accept the allegation. It is not necessary to have the individual resubmit the bonds.
When the mandatory retention period elapses for one or more of the bonds, determine the current redemption value and update the CG field with the current value.
EXAMPLE: During a redetermination in March 2003, the recipient alleges owning the same U.S. Savings Bond she previously reported. Previously, she reported she received the bond “for Christmas 2001.” Based on her description, the CR determines it is a match for a Series EE bond already described in the CG field. The recipient states that the bond is for $200 and is the only bond she owns, but she did not bring the bond with her to the FO. The individual's SSR contains a CG field entry of “RE21 1EEX 1201 200X.” Since the individual's allegation agrees with the CG field entry, it is not necessary for the individual to resubmit the bond. The CR determines the current redemption value of the bond and updates the CG field with that value.
3. When the existing documentation does not support the allegation
a. Paper bonds
If the alleged number, type, issue date, and denomination of bonds are not reflected in the EVID screen, MSSICS, the SSR Remarks field, the CG field, or in a prior file available in the field office, follow the initial claims procedures in SI 01140.240E (in this section), and have the individual resubmit all the bonds he or she owns.
b. Electronic bonds
If the alleged number, type, issue date, and amount of the electronic bonds do not match in the EVID Screen, MSSICS, the SSR Remarks, the CG field, or in a prior file available in the field office, require re-verification of the electronic bonds.
Ask the individual to obtain the Current Holdings Summary from the TreasuryDirect website which can provide a complete list of the individual's electronic bonds and their value and document the file per SI 01140.240E.4. (in this section).
G. References
* SI 00830.500 Dividends and Interest
* SI 02310.015 Savings Bond Interface
* SI 02310.049 IRS Alert Development-Special Situations
* SM 01005.525 CG Field in Initial Claims
* SM 01301.785 CG Field in Postentitlement
* MSOM INTRANETSSI 013.020 Stock, Bond, or Mutual Fund
* MSOM MSSICS 023.006 CMSC Screen
* MSOM EVID 001.003 EVID Screen

POMS Reference

SI 01140.240: U.S. Savings Bonds