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Tracking US Savings Bond Interest does NOT update Market Value

unknown

I want to track the value of US Savings Bonds (2018 Quicken for Windows ). Going by the instructions in Quicken, I have setup a Brokerage acct and a security for my series EE bonds. I then entered a Buy transaction for initial shares along with the price/share. Then, I entered an Intinc transaction for all of the interest earned todate. However, the market value is not updated to reflect the current value of the bonds. If I use the ReInv transaction I have to enter the number of shares which increases the share balance and changes the market value to the total interest re-invested NOT the total bond price plus the interest. Is there a way to enter Interest Income and have the market value reflected correctly?

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Jim_Harman

I am not an expert on savings bonds in Quicken, but I think the best way to handle this depends on how you will be treating the interest for tax purposes.

Most people let the interest add to the value of the bond and only pay taxes on it when they sell the bond. If you have a $100 bond, you could buy 1 "share" for $50.00 and periodically change the share price to match the current value. When you sell the bond, you would record all the accumulated interest then sell the bond at $25.00.

If it is a tax deferred account or you are paying taxes on the interest every year, you would record Interest Income for the interest as it accumulates and let the interest money accumulate as cash in the account.

unknown

I am not an expert on savings bonds in Quicken, but I think the best way to handle this depends on how you will be treating the interest for tax purposes.

Most people let the interest add to the value of the bond and only pay taxes on it when they sell the bond. If you have a $100 bond, you could buy 1 "share" for $50.00 and periodically change the share price to match the current value. When you sell the bond, you would record all the accumulated interest then sell the bond at $25.00.

If it is a tax deferred account or you are paying taxes on the interest every year, you would record Interest Income for the interest as it accumulates and let the interest money accumulate as cash in the account.

Note on Savings Bonds and taxes. You don't have to pay taxes as you get the interest. You need to pay it when their final maturity is hit or you sell them.

unknown

I am not an expert on savings bonds in Quicken, but I think the best way to handle this depends on how you will be treating the interest for tax purposes.

Most people let the interest add to the value of the bond and only pay taxes on it when they sell the bond. If you have a $100 bond, you could buy 1 "share" for $50.00 and periodically change the share price to match the current value. When you sell the bond, you would record all the accumulated interest then sell the bond at $25.00.

If it is a tax deferred account or you are paying taxes on the interest every year, you would record Interest Income for the interest as it accumulates and let the interest money accumulate as cash in the account.

P.S. I put my savings bonds in brokerage account and marked it tax deferred.
Since I only started recording my bonds long after they hit face value I put in the face value and then an entry for the interest accumulated past that value. And then record an interest income transaction when I got interest.

The value of the bond initial value entered, plus the interest. You don't go by the "market value".

In reality I believe that Savings bonds are not like other bonds.
The "face value" is sort pointless.

For instance you buy a bond for $18.75 (I believe that is the number for a $25 bond).
You hold it for a year and sell it. You won't get either the $18.75 or $25.

You hold it to final maturity, you won't get $25, you will get more because they don't stop earning interest when they hit face value.

unknown

So, my original question was about correcting the "market value" or the total value of the brokerage account... not taxes! Because the value of the brokerage account does not reflect the original US Savings Bond purchase (Buy transaction) and the interest (ReInv transacation). Once I entered the Interest (ReInv) transaction the account value was updated to the interest amount only. The account value should reflect the total value of the bonds... initial purchase amount plus all interest. Is there a way to accomplish this in Quicken?

Ps56k2

BTW - the US Treasury used to have a desktop program called Savings Bond Wizard.
They retired that software program this year, and replaced it with a website - and technique to save the inventory HTML file to your desktop - and then Import it back to the website for future viewing.
The key, is that the interest rates and other bond info is updated 2 times a year.

https://www.treasurydirect.gov/indiv/tools/tools_savingsbondwizard.htm

Jim_Harman

Condor723,

Did you try the approach I outlined in my post above - consider each bond of a particular maturity date as 1 share, buy at half the maturity price, and adjust the price as the interest is credited?

{Edit to clarify} As I said above,

If you have a $100 bond, you could buy 1 "share" for $50.00 and periodically change the share price to match the current value. When you sell the bond, you would record all the accumulated interest then sell the bond at $25.00.

Continuing the example, if you eventually sell the bond for $95.50, you would enter an Income transaction of $45.50 of interest on the sale date and then a Sell transaction of the 1 share at $50.00.

That will track the value of your bonds correctly AND handle taxes correctly if that is important to you.

craig.

Some years back I entered my US Savings bonds as per Quicken's instructions. One share for each bond and purchase/maturity date. Using Savings Bond Wizard, I ran updates each quarter and used Interest Income transactions to update the bond's value. when I look at the details for each bond category, I can see the amount of interest accrued to the bonds in that group. But when looking at the Investing tab, Quicken only lists the interest in a summary "cash" line for all the bonds, nothing for the individual bond categories. Not a big deal for me, now that all have reached final maturity. However, if I was actively buying bonds, I would be disappointed in the lack of functionality. And that Quicken will not update them automatically.