Cashing in on Unclaimed Property

Tough times compel people to rein in spending, cancel pricey subscription services like premium cable, mail in product rebate receipts, and collect food coupons. But the aggregate savings from those activities could end up looking like pocket change compared to billions of dollars in unclaimed property being held in state controllers' and the U.S. Treasury's coffers.

The Bureau of Public Debt, part of the U.S. Treasury Dept., says more than $16.6 billion worth of unredeemed U.S. savings bonds have matured and are no longer earning interest. The bureau has established a Web site, www.treasuryhunt.gov, for people to search for a missing bond by the original owner's Social Security number.

Claiming Treasury Bonds
Most people don't realize that even if the original holder of a bond has died, their heirs can still redeem it. Heirs can download a series of documents from www.treasurydirect.gov that enable them to state their relationship to the original owner and send in a copy of legal documentation, like a will or estate agreement, that proves it. Anyone who knowingly provides false information on these forms could potentially be brought up on perjury charges, according to the Treasury Dept.

In addition, at the end of 2008, there was more than $32 billion in unclaimed money sitting in state treasury coffers across the country, according to Shane Osborn, treasurer of Nebraska and president of the National Association of Unclaimed Property Admimistrators (NAUPA), a nonprofit organization affiliated with the National Association of State Treasurers. Unclaimed property accrues from a wide range of sources, including final paychecks that employees never collected, abandoned bank accounts, stock and bond certificates put away in safe deposit boxes or hidden under floor boards in homes, consumer product rebate checks, and utility deposits. Some of the money will never find its match, such as unused gift certificates at retailers which aren't required to keep records of who bought them.

Series E Bonds
There are more than 42 million individual Series E bonds bought between 1941 and 1978 that have fully matured and comprise the vast majority of the bonds that can be redeemed from the Treasury Dept. The E bonds were issued in denominations of $25 to $10,000 at 75% of face value and can be redeemed for between four and 12 times face value, says Stephen Meyerhardt, public affairs officer in the Bureau of Public Debt. The highest multiples apply to those bonds that locked in peak interest rates for 10 years if they entered an automatic 10-year extension period when those higher rates were in effect, such as between November 1981 and October 1982, he says.

The average estimated redemption value on the E bonds is around $400, says Meyerhardt. He estimates that perhaps 5% are redeemable for more than $500. "People who had larger securities were more apt to keep track of them and turn them in than those with very small amounts," he says.

Some savings bonds will never be redeemed, such as a portion of those bought during World War II "that were deliberately destroyed during bond rallies" in patriotic support of the government war effort, he says. Some heirs choose to hold onto bonds in their relatives' names because they're the only keepsake left. Other bonds just get lost along the way, and the heirs don't have enough information to even consider making a claim, he adds.

Only E bonds issued in 1974 or later can be searched at treasuryhunt.gov, since most issues before 1974 didn't require owners' Social Security numbers. The Bureau can still search its records for them but would need a letter from a claimant to start the process, says Meyerhardt.

The Treasury is holding another $62.8 million worth of matured H bonds, issued from 1952 through 1979. Also known as current-income bonds, they paid interest semi-annually prior to maturity and can be redeemed only at face value since there's virtually no outstanding interest left to be paid on them.