Where and how to redeem your bonds

You can cash government bonds at most banks and credit unions, or directly through the U.S. Department of the Treasury if you own them electronically. The method depends on what type of bond you hold and whether it's in paper or digital form.

Paper bonds (Series EE, Series I, and older Series HH bonds) can be redeemed at any bank or credit union that offers savings services. Bring the bond itself, a valid ID, and proof of Social Security number. The teller will verify the bond's authenticity and current value, then process the redemption. Most banks complete this same-day or within one business day.

Electronic bonds held through TreasuryDirect (the Treasury's online system) are redeemed directly through your account. Log in, select the bond you want to redeem, and request the redemption. The money transfers to your linked bank account within one to three business days.

Key Takeaways

  • Paper bonds can be cashed at any bank or credit union; electronic bonds are redeemed through your TreasuryDirect account online.
  • You must wait until a bond reaches its issue date before cashing it, and cashing early means losing accrued interest if the bond is less than five years old.
  • The Treasury will send you a 1099-INT form at tax time if your bond earned $10 or more in interest during the year.
  • Bonds held in a minor's name require a parent or guardian to sign and present ID when redeeming.

Understanding the penalties for early redemption

If you cash a Series EE or Series I bond before it reaches five years old, you lose the last three months of interest. This is the Treasury's standard penalty for early withdrawal. For example, if a Series I bond has earned $150 in interest but you redeem it at four years and six months, you forfeit $37.50 (three months' worth) and receive $112.50 instead.

Series HH bonds, which are no longer issued but still held by many people, have different rules. They mature after 20 years and pay interest every six months. Redeeming before maturity also costs you three months of interest, but these bonds are less common and your bank may need to contact the Treasury to process the redemption.

There is no penalty for waiting past the maturity date to redeem. A Series EE bond matures after 30 years; a Series I bond after 30 years as well. After maturity, they stop earning interest, so there is no financial reason to hold them longer.

What happens with the interest you've earned

The interest on your bond is added to the redemption amount you receive. When you cash a $100 Series I bond that has earned $45 in interest, you receive $145 total (minus any early redemption penalty if applicable).

That interest is taxable income in the year you redeem the bond. The Treasury will issue you a Form 1099-INT if the bond earned $10 or more in interest. You report this on your federal tax return as interest income. Some people hold bonds specifically to defer this tax liability until retirement, when they expect to be in a lower tax bracket.

If you bought the bond with after-tax money (not through a retirement account), you owe federal income tax on the interest but not on the original principal. State and local income taxes vary by location; some states exempt Treasury bond interest from state tax.

Redeeming bonds held in a child's name

A parent or legal guardian must redeem bonds registered in a minor's name. Bring the bond, your ID, and the child's birth certificate or Social Security card to the bank. The parent or guardian signs the redemption form, and the funds go to an account in the parent's or guardian's name.

Once the child turns 18, they can redeem their own bonds if they have access to them. If the bonds are in a safe deposit box or held by the parent, the adult must still initiate the redemption, but the interest income will be reported on the child's tax return if they file one.

Replacing lost or damaged bonds

If your paper bond is lost, stolen, or damaged, you can request a replacement from the Treasury. Contact the Bureau of the Fiscal Service at 1-844-284-2676 or visit treasurydirect.gov. You will need to provide the bond's series, denomination, and issue date if you have them. The Treasury can look up the bond using your Social Security number and the information you provide.

Replacement bonds take four to six weeks to arrive by mail. During that time, the bond continues to earn interest. Once you receive the replacement, you can redeem it at your bank or through TreasuryDirect as usual.

Cashing bonds through an estate or trust

If you inherited a bond or are redeeming one from an estate, the process depends on whether the bond is in your name or still registered to the deceased person. If it is still in the deceased's name, you will need a certified copy of the death certificate and proof that you are the authorized heir or executor.

Bring these documents to your bank along with the bond. The bank may need to send the paperwork to the Treasury for verification, which can add one to two weeks to the process. Once verified, the redemption proceeds to your account. The interest earned up to the date of death is reported on the deceased's final tax return; interest earned after that date is reported on your return.

What to do if your bank won't redeem the bond

Some smaller banks or credit unions do not redeem paper bonds, though this is uncommon. If your bank declines, ask them to refer you to a bank in your area that does, or contact the Treasury directly. You can mail paper bonds to the Treasury's Bureau of the Fiscal Service with a completed FS Form 1522 (available on treasurydirect.gov). Include a letter stating your intent to redeem, your Social Security number, and the account where you want the funds deposited.

Mailing bonds takes longer — typically three to four weeks — and carries the small risk of loss in transit. Using a bank is faster and safer if one is available to you. Electronic bonds held in TreasuryDirect have no such limitation; you can redeem them anytime through your account.

Frequently Asked Questions

Can I cash a bond before its issue date?

No. A bond must reach its issue date before you can redeem it. For example, a Series EE bond issued on January 15, 2024, cannot be cashed until January 15, 2024. Attempting to redeem before that date will be rejected by the bank or Treasury.

What if I lost the physical bond but remember buying it?

Contact the Treasury at 1-844-284-2676 with your Social Security number and any details you recall (series, approximate amount, year purchased). The Treasury can search its records and issue a replacement bond, which you can then redeem. This takes four to six weeks.

Do I have to redeem all my bonds at once?

No. You can redeem one bond, some of your bonds, or all of them whenever you choose (after the issue date). Each redemption is a separate transaction, and you only pay tax on the interest from the bonds you actually cash that year.

What if the bond value has changed since I bought it?

Series I bonds adjust their interest rate every six months based on inflation. Series EE bonds earn a fixed rate. When you redeem, you receive the current value — principal plus all accrued interest to the redemption date. You cannot receive less than face value; the Treasury guarantees that Series EE bonds will at least double in value over 20 years.