How to Sell Government Bonds

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How to Sell Government Bonds. Government bonds, known in the United States as "Treasury bonds," are monetary or security debts issued by a specific country with the intent to repay the buyer, with interest, over a predetermined period of time. Knowing how to properly sell government bonds, even before they mature, will help to ensure that you get the most for your investment.

Sell Government Bonds

Find out whether or not the government bond in question has matured, which will determine your course of action in selling. You can find out the date a bond will mature by contacting the authority who issued the bond, such as the United States Department of the Treasury. You will need to provide information regarding the serial number of the bond or other identification codes.

Considering selling your government bond to a secondary market, such as an independent broker or financial institution, if it has not yet matured. Usually, a broker will offer your bond to a variety of banks and financial institutions, and then accept the highest bid for you. He will usually charge a nominal fee for each bond sold.

Sell a bond that has not yet matured directly back to the government authority that originally issued it. In the case of U.S. Treasury bonds, you will need to fill out a PD F 5179-1 form for the sale of a bond.

Mail your form(s) to the nearest Federal Reserve Bank to redeem a U.S. Treasury bond. The value of the bond will be directly deposited into your bank account, minus a fee. Note that each country may have a different procedure for redeeming bonds.

Redeem a government bond that has reached its term of maturity by contacting the authority that issued it directly. In the case of the U.S. Treasury department, you will be sent a notice by mail approximately 45 days before the bond matures, so that you can either reinvest it or cash it in.

Check the website for the U.S. Treasury for more options on selling government bonds through the Treasury Direct program (see Resources below).

Tips & Warnings

  • Decide which bonds to buy based on maturity periods. The Treasury Department divides bonds into 3 different classes: short-term bonds, or "bills," have a term of less than 1 year before they mature, medium-term bonds are called "notes," and usually have terms of 1 to 10 years, and long-term treasury bonds are just called "bonds," and can take 10 years or more to mature.

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