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. Call ahead to confirm they handle savings bonds — some smaller branches don't. You'll need to bring the bond itself and a photo ID.

If you don't want to visit a bank in person, you can cash Series I and Series EE bonds through TreasuryDirect, the U.S. Department of the Treasury's online platform. You'll need to set up an account, transfer the bond into it, and request the redemption online. This process takes a few business days.

The Federal Reserve also processes savings bond redemptions by mail if you send the bond directly to them, though this is slower and requires more paperwork than a bank visit or TreasuryDirect.

Key Takeaways

  • Most banks and credit unions will cash your savings bond for free, even without an account, as long as you bring the physical bond and photo ID.
  • You must wait until a bond reaches final maturity or you pay an early redemption penalty — typically three months of interest — if you cash it before that date.
  • Series I bonds have a one-year holding requirement before you can cash them at all, and a five-year holding period to avoid the penalty.
  • TreasuryDirect lets you cash bonds online, but you'll need to transfer the bond into an account first, which takes time if the bond is physical.
  • The bank will report the interest you earned to the IRS, so you'll owe federal income tax on that amount in the year you cash it.

Understanding the holding period and early redemption penalty

You cannot cash a savings bond whenever you want. Each bond type has a holding period — a minimum time you must keep it before cashing without a penalty.

Series EE bonds can be cashed after one year, but if you cash before five years have passed, you lose the last three months of interest. Series I bonds have a one-year holding requirement before you can cash them at all. If you redeem an I bond before five years, you also forfeit three months of interest. After five years, both types can be cashed with no penalty.

If your bond has reached final maturity — typically 30 years after issue — it stops earning interest and you should cash it. The bank will tell you the maturity date when you bring it in.

What documents and information you'll need

Bring the physical bond and a government-issued photo ID (driver's license, passport, or state ID). The bank will verify your identity and check that you are listed as the owner or co-owner on the bond.

If you're cashing a bond that belongs to someone else — a deceased relative's estate, for example — you'll need different paperwork. Bring the death certificate and proof that you have legal authority to redeem it, such as letters testamentary or a court order. The bank's bond department can tell you exactly what they need.

If you're using TreasuryDirect, you'll need your Social Security number and the bond's serial number. If the bond is physical, you'll have to mail it to TreasuryDirect first or request a transfer from the Federal Reserve, which can take several weeks.

How the bank processes the redemption

When you hand the bond to the teller, they'll enter the serial number and issue date into their system to confirm the bond is real and to calculate the current value. This includes the principal you paid plus all interest earned to that date.

The bank will then ask how you want the money — as a check, a deposit to your account (if you have one there), or cash. Most banks process this same day or the next business day. You'll receive a receipt showing the bond's serial number, the amount paid, and the interest earned.

Keep that receipt. The bank reports the interest to the IRS on a Form 1099-INT, and you'll need the receipt to match it to your tax records.

Tax implications when you cash

The interest you earned on the bond is subject to federal income tax in the year you cash it. If you earned $500 in interest, you'll owe federal income tax on that $500 — the rate depends on your overall income and tax bracket.

You do not owe state or local income tax on savings bond interest, even if your state has an income tax. This is one advantage of savings bonds over other savings vehicles.

If you've been reporting the interest each year on your tax return (some people do this instead of waiting until redemption), you won't owe tax again when you cash it. Ask your tax preparer whether you've been doing this. Most people don't report annually and instead pay the tax all at once when they redeem.

Cashing a bond held in a minor's name

If the bond is registered in a child's name, the parent or legal guardian can cash it, but the interest is taxable to the child. Bring the child's Social Security number and proof of guardianship (birth certificate or custody order).

Some parents use savings bonds as a tax strategy by putting them in a child's name, since children often have little or no other income and may owe no federal tax on the interest. This is legal, but the tax rules are complex. Talk to a tax preparer before cashing a bond in a minor's name if you're counting on this benefit.

What to do if you've lost the bond

If you've lost a physical savings bond, you can file a claim with the Treasury Department to replace it or get the value. You'll need to provide the bond's serial number, issue date, and denomination. If you don't have this information, the Treasury can search their records if you provide your Social Security number and the approximate issue date.

This process takes several weeks. In the meantime, the bond continues to earn interest. Once the Treasury confirms the bond was issued to you, they'll either reissue it or pay you the current value, depending on what you request.

Frequently Asked Questions

Can I cash a savings bond at any bank?

Most banks and credit unions will cash savings bonds, but not all branches do. Call ahead to confirm. You don't need an account at the bank. Bring the bond and photo ID.

What happens if I cash a bond before five years?

You'll lose the last three months of interest as a penalty. For Series I bonds, you can't cash before one year at all. After five years, there's no penalty for either type.

Do I have to pay taxes when I cash a savings bond?

Yes, you owe federal income tax on the interest earned. The amount depends on your tax bracket. You don't owe state or local tax. The bank reports the interest to the IRS, so report it on your tax return.

Can I cash a bond online through TreasuryDirect?

Yes, but only if the bond is already in your TreasuryDirect account. If you have a physical bond, you'll need to transfer it first, which takes time. A bank visit is usually faster.

What if the bond is in someone else's name?

You'll need legal authority — a death certificate and letters testamentary for an estate, or a court order for guardianship. The bank's bond department will tell you what documents they need before you bring them in.