Savings bonds deposit through your bank, not the Federal Reserve

You cannot deposit a savings bond the way you deposit a check. Savings bonds are not negotiable instruments — your bank's ATM will reject them, and a teller cannot process them at the counter. Instead, you redeem the bond with the U.S. Department of the Treasury, receive the cash value, and then deposit that money into your account.

The process takes place in two separate steps: first you cash the bond, then you deposit the proceeds. How long this takes depends on which method you use to redeem — some routes are instant, others take weeks.

Key Takeaways

  • Series EE and Series I savings bonds must be redeemed through TreasuryDirect or your bank, not deposited directly like checks.
  • TreasuryDirect redemptions for electronic bonds happen instantly and the money can go straight to your bank account.
  • Paper bonds require you to visit a bank in person, and the bank may hold the funds for several business days before crediting your account.
  • You must own the bond for at least one year before redeeming it, and redeeming before five years means you lose the last three months of interest.
  • The Treasury will send you a 1099-INT form at tax time if your bond earned more than $10 in interest during the year.

Redeeming electronic bonds through TreasuryDirect

If your savings bonds are registered in TreasuryDirect (the Treasury's online system), you can redeem them and have the money deposited directly to your bank account within one business day. Log into your TreasuryDirect account, navigate to the "Manage My Securities" section, and select the bond you want to redeem. The system will ask you to confirm the redemption and provide your bank routing number and account number.

TreasuryDirect deposits go to the same account you used to purchase the bonds, unless you update your banking information before redeeming. Once you confirm the redemption, the bond is cashed immediately and the proceeds are scheduled for deposit. This is the fastest method and avoids any physical handling of documents.

Cashing paper bonds at a bank

Paper savings bonds must be redeemed in person at a bank where you hold an account. Bring the physical bond certificate and a valid photo ID. The bank teller will verify the bond's authenticity, confirm that you meet the redemption requirements (owned for at least one year), and process the cash-out. You will receive a check or, at some banks, a deposit directly to your account on the spot.

Banks typically hold paper bond deposits for three to five business days before the funds become available, even if the teller deposits the money immediately. This hold protects the bank in case the bond certificate is counterfeit or has already been redeemed elsewhere. Ask the teller how long the hold will last so you know when the money will clear.

Redeeming bonds through the Treasury if you don't have a bank

If you do not have a bank account, you can redeem savings bonds by mail through the Treasury's Bureau of the Fiscal Service. Send the bond certificate, a completed FS Form 1522 (the redemption request form), and a copy of your ID to the address listed on the Treasury website. The Treasury will mail you a check, which typically arrives within four to six weeks.

This method is slow and leaves your bond in the mail twice — once going to the Treasury and once coming back to you as a check. It is worth using only if you have no other option. Once you receive the check, you can deposit it at any bank using mobile deposit, at an ATM, or by visiting a branch in person.

Understanding the redemption penalties and timing

Savings bonds have two redemption rules that affect how much money you receive. First, you must own the bond for at least one year before you can redeem it at all — the Treasury will not cash a bond that is less than one year old. Second, if you redeem before the bond has been held for five years, you lose the last three months of interest as a penalty.

For example, a Series I bond purchased on January 15, 2023, cannot be redeemed until January 15, 2024. If you redeem it on January 15, 2025 (two years), you receive the interest earned through October 15, 2024, not through January 15, 2025. The three-month interest penalty applies to both Series EE and Series I bonds.

What happens to the interest when you deposit the proceeds

When you redeem a savings bond, the Treasury pays you the principal plus all accrued interest as a single lump sum. That entire amount — principal and interest combined — goes into your bank account. The interest portion is taxable income in the year you redeem the bond, and the Treasury will report it to the IRS on a 1099-INT form if the interest exceeds $10.

You are responsible for reporting the interest on your tax return, even if you do not receive a 1099-INT. Keep a record of the bond's purchase date, redemption date, and the amount of interest earned. If you held the bond for many years, the interest can be substantial, so factor that into your tax planning before you redeem.

Depositing the money once you have it

Once you have the cash or check from the bond redemption, deposit it like any other funds. If the Treasury or bank gave you a check, you can deposit it via mobile app, mail it to your bank, or bring it to a branch. If the money went directly to your account through TreasuryDirect or a bank deposit, it will appear in your account according to the hold period the institution sets.

There is no special process for depositing bond proceeds — the money is treated as ordinary income once it leaves the Treasury's hands. Your bank will not ask where it came from or treat it differently from any other deposit.

Frequently Asked Questions

Can I deposit a savings bond directly into someone else's bank account?

No. The bond must be redeemed in the name of the registered owner, and the proceeds go to that person's account. If you want to give the money to someone else after redemption, you can transfer it from your account to theirs once it clears.

What if I lost my paper savings bond?

Contact the Treasury's Bureau of the Fiscal Service with your bond's serial number and purchase information. They can issue a replacement certificate, though the process takes several weeks. If you cannot locate the serial number, bring any documentation you have — purchase receipts, old statements — to help identify the bond.

Do I have to redeem the entire bond, or can I cash out part of it?

You must redeem the entire bond. Savings bonds cannot be partially redeemed or split. If you own multiple bonds, you can redeem them one at a time or all at once, but each individual bond is an all-or-nothing transaction.

How long does it take for money from a redeemed bond to show up in my account?

TreasuryDirect deposits arrive within one business day. Paper bonds deposited at a bank are typically held for three to five business days. Mail redemptions through the Treasury take four to six weeks for the check to arrive, plus however long your bank holds the check after you deposit it.

Will redeeming a savings bond affect my taxes or benefits?

The interest from a redeemed bond is taxable income and must be reported on your tax return. If you receive means-tested benefits like Supplemental Security Income or SNAP, the redemption may affect your may be able to access or benefit amount in the month you receive it, depending on your state's rules. Check with your benefit administrator before redeeming a large bond.