Where to cash your savings bonds

You can cash savings bonds at most banks and credit unions, even if you don't have an account there. Walk in with the bond itself and a valid ID, and the teller can process it on the spot. Some banks charge a small fee (typically $5 to $25) to cash a bond that wasn't issued through them, so calling ahead to ask about fees saves a trip.

If you prefer not to visit a branch, you can cash bonds through the mail by sending them to the Federal Reserve Bank in your region. The Federal Reserve's website lists which bank serves your state. Include a letter requesting redemption, your Social Security number, and a copy of your ID. Mail it certified so you have proof of delivery. The process takes one to two weeks after the Federal Reserve receives your package.

For Series EE and Series I bonds, you can also redeem them online through TreasuryDirect, the government's bond management system. You'll need to set up or log into your TreasuryDirect account, and the money goes directly to your linked bank account within a few business days.

Key Takeaways

  • Most banks and credit unions will cash your savings bonds in person, though some charge a fee if you're not a customer.
  • Series EE and Series I bonds can be redeemed online through TreasuryDirect if you have an account set up.
  • You cannot cash a bond before it reaches its final maturity date, which is printed on the bond certificate itself.
  • The Federal Reserve will process bonds by mail if you send them certified with a copy of your ID and a redemption request letter.
  • Interest earned on savings bonds is subject to federal income tax but not state or local tax.

Checking your bond's maturity date

Every savings bond has a final maturity date printed on the certificate. You cannot cash the bond before that date arrives. For Series EE bonds issued after May 2003, the final maturity is 30 years from the issue date. Series I bonds have a final maturity of 30 years as well. Series HH bonds (no longer issued) mature after 20 years.

If your bond has already reached its final maturity date, the interest stops accruing, and you should cash it. Holding it longer earns you nothing. You can find your bond's exact maturity date by looking at the issue date on the certificate and adding the maturity period. If you've lost track of when your bonds were issued, TreasuryDirect shows the issue date for any bonds registered in your account.

Early redemption and the penalty for Series EE bonds

Series EE bonds can be cashed before maturity, but there's a cost: you lose the last three months of interest. So if you cash a bond that's been held for five years and nine months, you only receive interest through five years and six months. This penalty applies no matter how long you've owned the bond.

Series I bonds have no early redemption penalty, but there's a different catch. If you cash an I bond before it's been held for five years, you lose the last three months of interest. After five years, you can cash it without penalty. This makes I bonds less flexible in the short term but more rewarding if you hold them longer.

Series HH bonds, if you still own any, cannot be redeemed early at all. You must hold them until maturity or let them reach final maturity before cashing.

What happens to the interest you've earned

When you cash a savings bond, you receive both the principal (the amount you originally paid) and all the interest that has accrued, minus any early redemption penalty. The interest is paid as a lump sum in that single transaction. For example, if you bought a $100 Series EE bond 20 years ago and it's now worth $207, you receive $207 total.

The interest is subject to federal income tax in the year you cash the bond. You'll receive a Form 1099-INT from the financial institution that cashed it, and you report that interest on your tax return. However, savings bond interest is not subject to state or local income tax, which is one reason some people use them for long-term saving.

If you're cashing multiple bonds or a large amount, the tax hit can be significant. Some people space out redemptions across different tax years to keep their taxable income lower in any single year.

Cashing bonds held in someone else's name

If a bond is registered in someone else's name — for example, a grandparent bought it for you — that person must be present to cash it, or they must sign a power of attorney form authorizing you to redeem it. A bank will not cash a bond in someone else's name without their signature or legal authorization.

If the bond owner has passed away, the bond becomes part of their estate. The executor or administrator of the estate can cash it, but they'll need to provide a death certificate and proof of their authority (usually a court document). The process is slower than a standard redemption and may take several weeks.

Replacing lost or damaged bonds

If your bond is lost, stolen, or damaged beyond readability, you can request a replacement through TreasuryDirect if it's registered in your account there. For older bonds not in TreasuryDirect, contact the Federal Reserve Bank that serves your state. You'll need to provide the bond's serial number if you have it, your Social Security number, and the approximate issue date. The replacement process takes four to six weeks.

If a bond is damaged but still readable, most banks will cash it as-is. If it's severely damaged, the bank may send it to the Federal Reserve for verification before processing, which adds time to the transaction.

Transferring bonds instead of cashing them

You don't have to cash a bond. You can transfer it to someone else by having the current owner sign the back of the certificate and providing it to the new owner. The new owner then becomes responsible for reporting the interest on their tax return when they eventually cash it. This is sometimes done as a gift, though the person receiving the bond should understand that they'll owe taxes on the accrued interest when they redeem it.

Series EE and Series I bonds can also be transferred through TreasuryDirect to another person's account, which is cleaner than handling the physical certificate. The transfer must be requested by the current owner through their TreasuryDirect account.

Frequently Asked Questions

Can I cash a savings bond at any bank?

Most banks and credit unions will cash savings bonds, but some charge a fee if you're not a customer. Call ahead to ask about fees. If you want to avoid fees, try the bank or credit union where you have an account, or use TreasuryDirect if your bonds are registered there.

What if I can't find my bond certificate?

If your bond is registered in TreasuryDirect, you can redeem it online without the physical certificate. For older bonds not in TreasuryDirect, contact the Federal Reserve Bank in your region with your Social Security number and the approximate issue date. They can search their records and help you replace it.

Do I have to pay taxes on the interest when I cash my bond?

Yes. The interest is subject to federal income tax in the year you cash the bond. You'll receive a Form 1099-INT, and you report that amount on your tax return. State and local income tax does not apply to savings bond interest.

What if the bond is in my child's name?

The person whose name is on the bond must sign it or authorize you with a power of attorney. If your child is a minor, you may be able to sign as their guardian, but policies vary by bank. Call ahead and ask what documentation they need.

Can I cash a bond before it matures?

Series EE and Series I bonds can be cashed early, but you lose the last three months of interest as a penalty. Series I bonds have no penalty after five years. Series HH bonds cannot be cashed early. Check your bond's maturity date before deciding.