Bearer bonds have not been issued in the U.S. since 1982, but there are still some that haven’t been redeemed and have value. Unlike other bonds, where the owners are registered, bearer bonds can be redeemed by whomever possesses them. Figuring out the value may require some research, as the original financial institutions might not be in business.
Find out what financial institution currently manages the bond. Printed on the bearer bond will be the name of the financial institution that originally issued it -- most likely a bank or corporation. In many cases, the bank or bond issuer will have been purchased by another bank or financial institution. If so, that firm may honor the bond. If the bank no longer exists, you may not be able to redeem the bond for its value. You may need to provide the bond’s serial number.
Bearer bonds also have the value and interest payments printed on them. Many bonds are valued at $5,000. Each bond will have “coupons” that denote an interest payment and redemption date. A maturity date is also printed on the bond. If a bond still has interest coupons that haven’t expired and if the bond hasn't reached its maturity date, it still has value.
Find out if the bond has been "called," where the financial institution that issues it calls back all remaining bonds and coupons. According to Wells Fargo, if a bond has been called, then all remaining coupons must be redeemed in order to receive the return on the principal. The interest payment coupons will no longer be valid for a called bond, but the bond's value, called the principal, is still honored, according to The New York Times. Because bearer bonds aren't registered, the bond issuer notifies the public that it is calling the bond through an advertisement in the newspaper or financial institution.
Add the value of the remaining interest coupons to the principal value in order to determine the bearer bond's overall value. If the bearer bond isn't called, the interest coupons can still be redeemed, with the interest payment representing a percentage of the bond's value. Several U.S. banks still accept bearer bonds, including Wells Fargo and US Bank.
If the bearer bond can't be redeemed, it may have value as a collectible. The hobby of collecting antique stocks and bonds is called scripophily and these collectors could help you determine if the expired bearer bond has value.
Because bearer bonds can be redeemed by anyone who owns them, they can be risky. Similar to cash, bearer bonds are vulnerable to theft and damage.
- Wells Fargo: Bondholder Information - Bearer Bonds
- New York Times: Coupon Clipping, the Old-Fashioned Way
- Stock Search International: Welcome to the World of Scripophily
- Gates Capital: Glossary
- U.S. Securities and Exchange Commission. "Interest rate risk—When Interest rates Go Up, Prices of Fixed-rate Bonds Fall." Accessed Apr. 4, 2020.
- If the bearer bond can't be redeemed, it may have value as a collectible. The hobby of collecting antique stocks and bonds is called scripophily and these collectors could help you determine if the expired bearer bond has value.
- Because bearer bonds can be redeemed by anyone who owns them, they can be risky. Similar to cash, bearer bonds are vulnerable to theft and damage.
Terry Lane has been a journalist and writer since 1997. He has both covered, and worked for, members of Congress and has helped legislators and executives publish op-eds in the “Wall Street Journal,” “National Journal” and “Politico." He earned a Bachelor of Science in journalism from the University of Florida.