Where to cash your savings bonds

You can cash US savings bonds at most banks and credit unions, or directly through the US Department of the Treasury if your financial institution won't do it. Walk in with the bond itself, your ID, and a completed Form 8888 (if you want the money deposited to a bank account instead of received as a check). The teller will verify the bond's serial number, confirm you're the registered owner or an authorized representative, and process the redemption on the spot.

If your bank declines — some smaller institutions don't handle savings bonds — you can mail the bond and a signed letter requesting redemption to the Treasury Retail Securities Site in Parkersburg, West Virginia. Include a copy of your ID and your Social Security number. Processing by mail takes four to six weeks. You can also redeem Series EE and Series I bonds online through TreasuryDirect if you own them in that account, though you cannot redeem paper bonds online.

Some employers offer payroll deduction programs that let you buy savings bonds directly, and those bonds can sometimes be redeemed through the same payroll system. Check with your HR department about whether that option is available to you.

Key Takeaways

  • Most banks and credit unions will cash your savings bond on the day you walk in, as long as you bring the bond, your ID, and proof you own it.
  • The Treasury will redeem your bond by mail if your bank refuses, though it takes four to six weeks and requires a copy of your ID.
  • You must wait until a bond reaches its final maturity date to cash it without penalty, or hold it for at least one year to avoid losing the last three months of interest.
  • The bank or Treasury will report the interest you earned to the IRS on a Form 1099-INT, and you owe federal income tax on that interest in the year you redeem the bond.
  • State and local taxes do not apply to savings bond interest, but you may owe federal tax depending on your income and tax bracket.

When you can redeem without losing interest

Series EE and Series I bonds must be held for at least one year before you can redeem them. If you cash them before that year is up, you forfeit the last three months of interest — so if you've held the bond for six months, you'll only receive interest for three months. After one year, you can redeem at any time without penalty.

Series EE bonds issued before May 2003 and Series I bonds issued before May 2003 have a final maturity date of 30 years from issue. After that date, they stop earning interest and you should cash them. Series EE bonds issued after May 2003 and all Series I bonds issued after May 2003 have a final maturity of 30 years as well, but the Treasury may extend them. Check your bond's issue date and the current year to know how much time you have left.

If you hold a bond past its final maturity date without redeeming it, you lose all the interest it has earned. The Treasury does not automatically cash bonds, so it's your responsibility to track the maturity date and redeem before then.

What happens to the interest you earn

The interest on US savings bonds is subject to federal income tax, but not state or local tax. You report the interest on your federal tax return in the year you redeem the bond. The bank or Treasury will send you a Form 1099-INT showing how much interest you earned, and you use that figure on your tax return.

You have the option to report the interest each year as it accrues, rather than waiting until you redeem. This is called "reporting on an accrual basis" and requires you to file Form 3115 with the IRS. Most people don't do this because it means paying tax on money they haven't received yet. Stick with the simpler approach: report the interest when you cash the bond.

The amount of tax you owe depends on your total income and tax bracket. If you redeem a large bond and it pushes you into a higher bracket, you may owe more tax than you expected. Consider spreading redemptions across two tax years if you have a choice.

Redeeming bonds owned by a minor or deceased person

If you own a savings bond registered to a minor, you can redeem it as the parent or legal guardian. Bring the bond, your ID, and the child's Social Security number. The bank will verify that you have authority to act on the minor's behalf.

If the bond owner has died, the person settling the estate (the executor or administrator) can redeem the bond. You'll need the original bond, a certified copy of the death certificate, proof of your authority to act (such as letters testamentary from the probate court), and your ID. The Treasury or bank will verify these documents before processing the redemption. The interest earned up to the date of death is reported on the deceased person's final tax return, not on the redeemer's return.

What to do if your bond is lost, stolen, or damaged

If your paper bond is lost or stolen, contact the Treasury Retail Securities Site immediately at 1-844-284-2676. Provide the bond's serial number, issue date, and denomination. The Treasury can place a stop on the bond to prevent someone else from cashing it, and will issue a replacement bond with the same value and interest accrual.

If the bond is damaged but still readable, most banks will accept it for redemption. If it's too damaged to read, the Treasury can replace it if you provide the serial number and other identifying information. Replacement bonds take four to six weeks to arrive by mail.

Keep a record of your bond's serial number, issue date, and denomination in a safe place separate from the bond itself. This makes it much faster to report a loss and request a replacement.

Redeeming bonds early or before maturity

You can redeem a Series EE or Series I bond before its final maturity date as long as you've held it for at least one year. The trade-off is that you forfeit the last three months of interest. If you need the money and the bond is old enough, this penalty is usually small compared to the total value.

Some bonds, like older Series E bonds, have different rules. Check the bond itself or contact the Treasury to confirm the redemption terms for your specific bond type and issue date. The Treasury website has a bond lookup tool where you can enter your bond's information and see its current value and maturity date.

How to verify your bond's value before cashing it

The Treasury offers a free tool called the Savings Bond Calculator on its website. Enter your bond's series, denomination, issue date, and series number, and it will show you the current value, the interest earned, and the final maturity date. This takes the guesswork out of knowing what you should receive when you redeem.

You can also call the Treasury Retail Securities Site at 1-844-284-2676 and provide your bond information over the phone. A representative will look up the bond and tell you its current value. This is useful if you're unsure whether the bond has reached its one-year holding period or if you want to confirm the value before walking into your bank.

Frequently Asked Questions

Can I cash a savings bond at any bank, or only the bank where I opened an account?

Most banks and credit unions will cash a savings bond even if you don't have an account there, though some smaller institutions may decline. Call ahead to confirm your bank handles savings bond redemptions. If they don't, the Treasury will redeem it by mail.

What if I've lost the physical bond but I know I own it?

Contact the Treasury Retail Securities Site at 1-844-284-2676 with your bond's serial number and issue date. They can verify you own it, place a stop to prevent theft, and issue a replacement. If you don't have the serial number, provide as much information as you remember and they'll search their records.

Do I have to pay state income tax on the interest from a savings bond?

No. Savings bond interest is exempt from state and local income tax. You only owe federal income tax on the interest, reported in the year you redeem the bond.

What happens if I cash a bond before it's been one year?

You lose the last three months of interest. So if you've held the bond for six months, you'll receive interest for only three months. After one year, you can redeem without this penalty.

Can I redeem a savings bond online?

Only if you own it through a TreasuryDirect account. Paper bonds cannot be redeemed online. You must take them to a bank or mail them to the Treasury.