HH Bond redemption?

[bill123]

Hi,

I have some HH bonds that I purchased around 1998. I believe they were converted from EE bonds.

How can I find out what interest rate I am currently getting on them? Also, does anyone know how long it would take to redeem them and what kind of taxes I would need to pay?

I am house shopping and would use the bonds for my down payment. I am trying to decide if I should go ahead and cash them in now or wait until I have found a house and ready to purchase it.

thanks
b

[kork13]

I don't personally know alot about HH bonds, but the best resource I can point you to is directly at the source: the U.S. Treasury website. That link is specifically for HH-type bonds, but the rest of the site is pretty simple to navigate as well. I'm taking all of my information from that site, but partially summarized below.

The HH bonds are worth the face value, since you should have been receiving semi-annual interest payments from them. The current rate appears to be 1.5%.

As for redemption, you can take your bonds (I assume/hope you still have the paper bonds from issue?) to any local bank, and they can help you set up the redemption. They can't pay you for the bonds directly, but they can help you set up the redemption request. You'll have to receive the redemption funds via direct deposit from the Treasury.

For taxes, interest earnings are exempt from State and local income taxes, but are subject to Federal income tax (which you have probably been paying every year since you bought them). However, you should have no tax due from the redemption (face) value, because those amounts were already taxed when you first bought the bonds.

The timing honestly doesn't matter, but as a personal recommendation, earlier is simpler. The bank will look back into your financials for at least the last 1-3 months, and they'll want to know where every cent of your downpayment comes from. By getting the DP situated and in place weeks (possibly months) before-hand will make that process much smoother.... I found this out the hard way when I bought my house in August -- I had my DP coming from 5 different savings/checking/investment accounts, and providing source documents for all of those various deposits was a royal pain in the butt.