Seniors often have a healthy distrust of banks, and with good reason. After living through the Great Depression, bank closures and World War II, an account balance stamped into passbook didn’t feel quite as substantial as holding a U.S. savings bond in your hand. Previous generations didn’t have brokerage accounts (unless their last name was Rockefeller). When they bought stock or received company shares as part of their compensation or pension, they got an actual paper stock certificate.
These valuable documents often got tucked into a drawer or other hiding place, and eventually forgotten. In fact, there are billions of dollars worth of negotiable U.S. Treasury bonds alone floating around out there somewhere. The problem today is that when younger generations start sorting through their parents’ or grandparents’ paperwork and run across a stock certificate, they have no idea what they are. Here’s a little primer on how to identify stock certificates and savings bonds, and tips on discovering their value.
How savings bonds work
The U.S. Treasury began selling savings bonds in 1935, and over the years the color and size of the bonds have changed (most are a yellowy/orange color on heavy paper), but key elements are consistent. Similar to the currency in your wallet, bonds feature etchings of famous historical figures and a dollar amount.
For example, a 1944 $25 bond had George Washington on it. Some current bonds have Martin Luther King. Bonds also have the name of bond owner and the issued date, and newer bonds include the bondholder’s Social Security number.
These securities fall into the general category of zero coupon bonds, meaning that while interest on them accrues regularly, nothing is paid out until the bonds mature (30 years for U.S. Savings Bonds). The denomination of the bond is its value at maturity - the date featured on the bond - and the bonds originally sell for half of that face value, so a $50 bond sells for $25, then matures to a $50 value.
The key thing to remember about U.S. Savings Bonds is that, once a bond matures, it never expires. Visit this government site to calculate the value of your bonds.
Often workers bought bonds through their employers each pay period. The money was deducted from their paychecks, and bonds were mailed to their houses. We’ve found hundreds of unopened envelopes from the U.S. Treasury with bonds in them. So if you find a stack of savings bonds Grandma bought in 1950, they’re still negotiable, and the U.S. Treasury would love to pay them off and get that debt off its books.
What’s that stock certificate worth?
Stock certificates are as unique as the company issuing them, and some can be incredibly elaborate and colorful. For example, some Disney stock certificates have Walt on them surrounded by some of his most famous creations. DreamWorks shares may have Shrek peaking out of the bottom.
Again, there’s key information that every legal stock certificate will have, including the corporate name, the name of the person to whom the stock is registered and the all-important CUSIP number.
Without wading too deeply into the tall grass, the CUSIP identifies the issuing company and the type of security represented, and every stock certificate has a unique number. Every time a company changes its name or splits is shares, a new CUSIP is assigned to that stock, creating a trail of breadcrumbs you can follow.
Vintage stock certificates, like this railroad certificate, may have value to collectors
Say you come across a 60-year-old stock certificate from a company you’ve never heard of. That original CUSIP number will lead to the stock’s current counterpart (assuming the company survived), and its current value. You may need to hire a forensic accountant to help you uncover the value of these stocks, but it’s worth finding out. We’ve found stocks for clients worth thousands of dollars.
Even if the search ends in a bankruptcy, though, don’t assume that the certificate is worthless. There’s an active collectors’ market for old stock certificates. While not every old certificate qualifies as “collectable,” the going price for a Bear Stearns stock certificate is about $500.
Just a few weeks ago we were working with a family who was about to throw away $6,000 worth of savings bonds because they thought they had expired! Fortunately we were there to explain. Pay attention to your estate paperwork, so you don’t accidentally lose a valuable inheritance.