Converting Paper I Bonds

[BearBones]

I am trying to simplify my investments. I get paper I Bonds back each year after filing taxes. Would be easier to convert to electronic and keep with my other I Bonds at Treasury Direct. Does anyone have a compelling reason to keep in paper form that outweighs negatives of one more thing to log and keep track of?

[dualstow]

It's not compelling, but I do like that I have paper I-Bonds in a relative's safe. It's the only physical thing besides krugs that I can store on my own, free of identity theft vulnerability. ( I guess I also have some Amex renminbi cheques, but no paper cash. I hate the smell of the ink ).

[MachineGhost]

What if there is an EMP attack or a nuclear holocaust?  Do you trust the U.S. Treasury to have proper backup procedures in place and far off site?  You may want to inquire about their exact risk contigenices.

[Pointedstick]

What if there is an EMP attack or a nuclear holocaust?  Do you trust the U.S. Treasury to have proper backup procedures in place and far off site?  You may want to inquire about their exact risk contigenices.

If there's an EMP attack or a nuclear holocaust, I'd worry about there being a U.S. Treasury around to make the payments. I-bonds are fairly low on my list of things to acquire in preparation for those possibilities. 

[dualstow]

I think MG was joking. Then again, maybe not.

[smurff]

I'd check with the Treasury about how heirs or other owners can have access to your TD account in the event of death or serious disability (like being in a long coma or persistent vegetative state).  It's pretty straightforward with paper bonds, not so obvious with electronic bonds with no paper documentation from the Treasury of their existence.

One of the advantages of "forgetting" about the existence of a generally safe  investment is that the temptation to interfere with it is forgotten, too.  As long as you keep the bonds in the same safe place where you keep PM coins, or in a safety deposit box, they will not be totally forgotten.  You can also scan the bonds and store the e files on a flash drive.  A trusted family member or other heir should know where you keep them, and you should know where they keep theirs. (You can always move them if trust breaks down for whatever reason.)

A lot of the distrust of e-IBonds could be dealt with via a periodic (annual, semiannual, or quarterly) paper statement from the Dept of the Treasury, stating the electronic bonds held, their face values, acquisition and maturity dates, and any interest accumulated.  It would be similar to what Social Security now does each year for those in the Social Security system.  They need to do it for the same reason SSA does:  People were paying into the system, but come time to pay up, the SSA had "lost" their contributions, or the wrong amounts were credited as contributed, or they were credited to someone with a similar name or SS number, or even to that number the wallet manufacturers used to include in the example cards they included in their wallets.  It sounds silly today, but back when it was a new system and people were unfamiliar with how it worked, lots of them used that number (something like 000-00-0000) as their own.

Right now, if some nut at the Treasury wanted to, they could wipe your account off the face of the earth, with no proof that it ever existed besides your own printouts, which they can claim are fake.  Every electronic system that governments claim was invulnerable had been hacked so many times it's a national embarrassment.  Cyberwarfare is a reality.  It doesn't have to be a Treasury nutcase, but a Chinese, Nigerian, Bulgarian, or North Korean nutcase can do lots of damage.

Even President Reagan knew what to expect from governments.  He's the one who said, "Trust, but verify."

With the periodic statement I envision, the Treasury Dept could mail it to you, or you can have the option of getting an official print out from the bank you use for investing/cashing in.  The banks can even charge a reasonable fee for your printout.  You shouldn't  have to take it if you don't want it, but it should be there for those who do.

It's not just the end-of-civilization scenarios that need to be considered.  End of computer, end of brain function, end of password cheat-sheet need to be considered as well.

[AgAuMoney]

no paper cash. I hate the smell of the ink.

You can wash it.  That kind of money laundering is 100% legal.  Just throw it in the machine or tie it into a sock or pillowcase (or a 'delicates' bag if you have one).  Probably be fine in the dishwasher, but I like the clothes washer better.  Paper money is more delicate than stainless steel and dishwashing detergent is pretty harsh stuff.  Besides, what would the money get on my dishes?

It will smell much better after laundering.  Ink (and other) smells go away in my experience.

[WildAboutHarry]

I converted a bunch from paper to "electronic" when the "new" TD was starting up.  I regret it to this day. 

Paper securities are the equivalent, in one sense, of silver and gold coins.  Nostalgia, lost innocence, etc.

Don't do it is my advice.  EMP be damned!

[smurff]

no paper cash. I hate the smell of the ink.

You can wash it.  That kind of money laundering is 100% legal.  Just throw it in the machine or tie it into a sock or pillowcase (or a 'delicates' bag if you have one).  Probably be fine in the dishwasher, but I like the clothes washer better.  Paper money is more delicate than stainless steel and dishwashing detergent is pretty harsh stuff.  Besides, what would the money get on my dishes?

It will smell much better after laundering.  Ink (and other) smells go away in my experience.

Dishwasher is probably too hot.  It also cleans by throwing the water against plate and cup surfaces, where the fine sand that is naturally in water does a bit of dermabrasion, stripping surface debris away.  It might a abrade the money so much that some of the ink wears away.

Washing machine will work, just keep water cold or warm, and use a delicate cycle.  You could also try hand washing as it's a lot simpler.  Air dry it, or test dry it a few minutes on a delicate cycle.