U.S. Savings Bonds Continue to Grow After Maturity

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U.S. Savings Bonds Continue to Grow After Maturity

When I was in the second grade, which would have been about 1957, I attended to a small, four-room school in Independence, Missouri. We had a playground with three swings, two teeter-totters, and a jungle gym. There was no cafeteria, so our mothers had to pack our little lunches every morning. I had a metal lunchbox with a picture of Superman on it.

The highlight of the school week was Wednesday. On that day, two very important things happened. First, the school board sent a hot lunch crew to our school. And they almost always served the same thing – Made-Right hamburgers. Yum! I loved those things. In case you’re not familiar with them, a Made-Right is a loose-meat hamburger on a bun. In addition to the burgers, the lunch crew also brought small bags of potato chips, pickles, and a few other condiments you could add. Naturally we had milk to wash everything down. But in those days, our milk didn’t come in a cardboard box like it does today. It was delivered in little glass bottles with cardboard stoppers on the top.

 

The second thing that happened on Wednesdays was a regular visit from the Government. Now, that’s typically not a good thing, especially if it’s the IRS. Fortunately, these ladies came into our classroom on a benevolent mission. Each week they would give the same short speech (at least it always seemed like the same speech). They always pointed out the value of saving for the future. And after the big sales pitch, they offered us the little United States Savings Stamps. At only twenty-five cents each, they were a bargain.

Even though twenty-five cents was the lion’s share of my weekly allowance, I always bought one. There were a few times when I had a little extra cash, and I would buy a second one. It didn’t matter that I would have to give up a Dreamsicle from the ice cream truck. This saving thing was important business. Almost everyone in my class bought these stamps. We knew the stamps were a good thing. There wasn’t a kid in that classroom that hadn’t seen Superman on television telling about how it was a good thing to save our money and to help the country at the same time.

The Government Ladies also gave each of us a book, kind of reminiscent of the S&H; Green Stamps, or Gold Bond Stamps of that era. The book was designed to hold the stamps so we didn’t lose them. Every week we would buy our stamps, lick the back of them, and stick them in our little books, trying to get them as straight and as neat as we could.

When you had accumulated 50 of them and filled every vacant square in your book, you could trade the whole thing in for an honest-to-goodness $25 United States Savings Bond. Then the waiting began as the bonds matured over the next 11 years or so. During that school year and the one that followed, I managed to fill two books with stamps, which I traded in for two new $25 United States Savings Bonds. I took them home and stuck them a drawer and waited.

Years later, in the 90s, my father gave me my Savings Bonds. They had been stored safely away in his filing cabinet for forty years. I figured it was time to cash them in and collect my $25 for each of them.

 

When I went to the bank I was surprised to learn that, although the bonds had stopped maturing at the regular rate after the 11-year period, they had continued to earn interest at a lower rate for the following 30 years. At the time I redeemed them, they were worth a little over $250 each.

Wow! What an unexpected bonus. Superman was right. As usual. That just goes to show you the value of time and compound interest when it comes to saving. They should initiate a program like that today to teach our youngsters to save a little instead of spending it as soon as it’s acquired.