Help me decipher the utility of a "CATS" bond.
April 11, 2006 8:53 PM Subscribe
My grandmother recently passed away and in her possession we discovered a matured "CATS" (Certificate of Accrual on Treasury Securities) "Series P" bond to be paid to my name. It's nothing huge, a few thousand dollars, but it matured in 2002. Though I'm fairly sure I've figured out how to redeem it, I'm having absolutely no success in understanding exactly what a "CATS" bond is. Plenty of Google results but it's all Greek to me, quite frankly.
posted by incomple to Work & Money (21 answers total)
It's for $6,000, was issued in September of 1985, matured in 2002, and says "13 1/4% Interest due May 15, 2014" at the top.
The institution here in Manhattan where it was issued is inaccessible (apparently the goddamned World Trade Center fell on top of it) so it's not as simple as just going to the bank. Here's what I'm wondering--It matured in 2002, meaning I can redeem its $6,000 worth, correct?
Well, what's this 13.25% figure all about? Is that a yearly accrued interest until 2014, making the bond worth quite a lot more than its purchase price? Or does it mean that in 2014, the bond is going to accrue a flat 13.25% (topping out at just under $6,800)?
Obviously if it's going to be worth quite a lot in 2014 I'll sit on it, but $6000 today is worth a lot more to me than $6800 in the better part of a decade, so help me make the decision to redeem it or not. Thanks for any help anyone can give me--I'd be lost without you.