Where to cash your savings bond

You can cash a savings bond at most banks and credit unions, even if you don't have an account there. Walk in with the bond itself, a valid photo ID, and your Social Security number. The teller will verify the bond's serial number and current value, then issue you a check or deposit the money directly into an account you provide.

If you prefer not to visit a bank in person, you can cash certain bonds through the U.S. Treasury's TreasuryDirect website. Series I and Series EE bonds purchased through TreasuryDirect can be redeemed online, and the money goes into your linked bank account within a few business days. Paper bonds cannot be redeemed online — only those you bought electronically.

Some employers also offer bond-cashing services through payroll. Check with your HR department to see if this option is available; if it is, you submit the bond and receive the proceeds as a separate check or direct deposit.

Key Takeaways

  • Banks and credit unions will cash your savings bond without requiring you to be a customer, as long as you bring the bond and a photo ID.
  • Series I and EE bonds bought through TreasuryDirect can be cashed online at no cost, while paper bonds must be cashed in person at a financial institution.
  • You must wait until a bond reaches its final maturity date or meet the minimum holding period (typically one year) before you can cash it without penalty.
  • Cashing a bond before five years have passed means you lose the last three months of interest as a penalty, even if the bond is otherwise mature.
  • The bank 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 cash the bond.

Minimum holding periods and early redemption penalties

You must hold a savings bond for at least one year before you can cash it. If you try to redeem it before that year is up, the bank will refuse — there are no exceptions to this rule, even in emergencies.

If you cash the bond between one year and five years, you lose the last three months of interest as a penalty. For example, if you cash a bond after three years, you receive interest only through month 33, not month 36. This penalty applies to all savings bonds regardless of series or purchase date.

After five years, you can cash the bond without any interest penalty. However, you still owe federal income tax on all the interest the bond earned, whether you cash it early or at maturity.

What happens to the interest you earned

The interest on a savings bond is not paid to you separately — it is built into the bond's value. When you cash the bond, you receive the principal plus all accumulated interest as a single payment.

The bank will issue you a Form 1099-INT showing the total interest earned. You must report this interest as income on your federal tax return for the year you cash the bond. If the bond was in a child's name, the interest is taxable to that child, not to the parent who bought it.

You can choose to report the interest each year as it accrues instead of waiting until you cash the bond, but most people don't do this because it requires filing amended returns. The simpler approach is to report all the interest in the year you redeem.

Cashing bonds registered to someone else

If a bond is registered in your name only, you can cash it anytime after the holding period. If it is registered in two names (yours and another person's), both owners must be present to cash it, or one owner must have a power of attorney document signed by the other.

If the bond's original owner has died, the person settling the estate can cash it, but they will need a certified copy of the death certificate and proof that they have authority to act on behalf of the estate. The bank will guide you through what documents are required.

Bonds registered in a child's name can be cashed by a parent or legal guardian, but the child must be present or the guardian must have legal documentation showing guardianship.

Replacing a lost, stolen, or damaged bond

If your paper bond is lost, stolen, or damaged, you can file a claim with the U.S. Treasury to have it replaced or redeemed. Contact TreasuryDirect by phone at 844-284-2676 or through their website to start the process.

You will need to provide the bond's serial number if you have it, or details like the series, denomination, and approximate purchase date. The Treasury will investigate and either issue a replacement bond or pay you the current value. This process can take several weeks.

If the bond was damaged by fire, water, or wear but is still readable, most banks will cash it as-is. Bring it in and ask; the teller can usually process it without involving the Treasury.

Cashing bonds at different financial institutions

Large national banks, community banks, and credit unions all cash savings bonds. You do not need to use the bank where you have your checking account — any federally insured institution will do it. Some smaller banks or credit unions may ask you to call ahead to confirm they have the cash on hand, especially if you are cashing a large-denomination bond.

Brokerage firms and investment companies generally do not cash savings bonds, so do not try a financial advisor's office. Stick to banks and credit unions.

If you are cashing a bond through TreasuryDirect online, the money goes to whatever bank account you linked to your TreasuryDirect profile. Make sure that account information is current before you request redemption.

What to bring and what to expect

Bring the physical bond (if it is a paper bond), a valid photo ID such as a driver's license or passport, and your Social Security number. The teller will examine the bond to confirm it is genuine and check that you are the registered owner or an authorized representative.

The process usually takes 10 to 15 minutes. The bank will verify the bond's series, denomination, and current value using Treasury records, then issue payment. You can receive the money as a check, a deposit to your account, or sometimes cash, depending on the bank's policy and the amount.

If you are cashing a very large bond or multiple bonds at once, the bank may require you to fill out a Currency Transaction Report (CTR) for tax reporting purposes. This is routine and does not mean anything is wrong — it is a federal requirement for cash transactions over $10,000.

Frequently Asked Questions

Can I cash a savings bond before one year has passed?

No. All savings bonds have a one-year minimum holding period. You cannot cash the bond before that time, and no bank will process it. If you need the money sooner, you will have to find another source.

Do I have to pay state income tax on the interest?

No. Savings bond interest is exempt from state and local income taxes. You owe only federal income tax on the interest earned. This is one of the tax advantages of savings bonds compared to other savings vehicles.

What if the bank says they can't cash my bond?

This is rare, but it can happen if the bond is counterfeit, the serial number is invalid, or the bond has already been cashed. Ask the bank to explain why they cannot process it. If you believe the bond is legitimate, contact TreasuryDirect directly at 844-284-2676 to verify its status and get guidance on next steps.

Can I cash a bond online if I bought it as a paper bond?

No. Only electronic bonds purchased through TreasuryDirect can be redeemed online. Paper bonds must be cashed in person at a bank or credit union. If you want to switch to online redemption in the future, you can buy new bonds through TreasuryDirect instead of paper bonds.

What happens if I cash a bond and don't report the interest on my taxes?

The bank reports the interest to the IRS on a Form 1099-INT, so the IRS will know you cashed the bond and how much interest it earned. If you don't report it, you risk owing back taxes, penalties, and interest. It is simpler and safer to report the interest when you file your return.