You can cash in a Series EE bond at most banks, through the Treasury Department, or by mail — but the timing and tax consequences depend on how old the bond is
Series EE bonds can be cashed in at any time after you own them, but the Treasury will penalize you if you cash them in before five years have passed. If your bond is five years old or older, you can redeem it without penalty at a bank, credit union, or through the U.S. Department of the Treasury. The amount you receive is the current redemption value, which includes all interest earned since you bought the bond.
The process itself is straightforward, but you need to know which route works for your situation and what tax forms you'll need afterward. The choice between a bank, the Treasury, or mail depends on how many bonds you're cashing in and how quickly you need the money.
Key Takeaways
- Series EE bonds can be cashed in without penalty only after five years of ownership; cashing in earlier means losing three months of interest.
- Banks and credit unions can redeem your bond in person if you bring the physical bond and a government-issued ID, usually within minutes.
- The Treasury Department accepts redemptions by mail or through TreasuryDirect if you own the bond electronically, and processes them within two to three weeks.
- You owe federal income tax on all interest earned, but not state or local tax, and you can choose to report it all in the year you cash it or spread it across years if you've been deferring.
- If you lose a physical bond, the Treasury can issue a replacement, but the process takes several weeks and requires proof of purchase.
Cashing in at a bank or credit union
The fastest way to get your money is to walk into a bank or credit union with the physical bond and a government-issued ID. Most institutions will redeem Series EE bonds on the spot, though some may require you to have an account there. Call ahead to confirm they offer this service — not every branch does, and some credit unions only redeem for members.
Bring the bond itself (not a copy), your ID, and be prepared to sign the back of the bond in front of a bank employee. The bank will look up the current redemption value using Treasury tables and hand you a check or deposit the money directly into your account. The whole process usually takes 10 to 15 minutes. The bank does not withhold taxes; you will owe federal income tax on the interest when you file your tax return.
If you own multiple bonds, you can redeem them all in one visit. Some banks have limits on how many they'll cash in a single day, so ask when you call. If you're cashing in a large number of bonds, the Treasury Department may be faster.
Redeeming through the Treasury Department
If you own your Series EE bond electronically through TreasuryDirect (the Treasury's online account system), you can redeem it directly from your account without visiting a bank. Log in to TreasuryDirect, select the bond you want to cash in, and request the redemption. The money will be deposited into the bank account linked to your TreasuryDirect account within one to two business days.
If you own a physical bond and prefer to work with the Treasury directly, you can mail it to the Bureau of the Fiscal Service along with a completed FS Form 1522 (the redemption request form). Include a copy of your ID and a letter explaining what you're doing. Mail everything to the address listed on the form. The Treasury will send you a check within two to three weeks, or deposit the money into your bank account if you provide those details on the form.
This route is slower than a bank visit but useful if you don't have a local bank that redeems bonds, or if you're cashing in a very large number of bonds and want an official record from the Treasury itself.
The five-year penalty and what it costs
If you cash in a Series EE bond before it has been held for five years, the Treasury will reduce your redemption value by three months of interest. This is not a flat fee — it's calculated based on the actual interest your specific bond has earned. On a bond that has earned $100 in interest, the penalty might be $2.50 or $3, depending on the interest rate at the time you bought it.
The penalty applies to the interest only, not to your original purchase price. You always get back at least what you paid for the bond, even if you redeem it immediately. However, because Series EE bonds are sold at half their face value (you pay $50 for a $100 bond), the early redemption penalty can still make a meaningful difference on bonds held for only a few months.
If your bond is exactly five years old or older, there is no penalty. The redemption value you receive includes all interest earned, with nothing subtracted. This is why many people wait until the five-year mark to cash in bonds they no longer need.
Tax reporting when you redeem
The interest you earn on a Series EE bond is subject to federal income tax but not state or local tax, no matter where you live. You do not owe tax on the original purchase price — only on the interest. When you cash in the bond, you have two choices for how to report the income.
The first option is to report all the interest in the year you redeem the bond. This is the most common approach. You will receive a Form 1099-INT from the bank or Treasury showing the interest amount, and you report it on your tax return for that year. The second option is to report the interest in the year you bought the bond and each year after, spreading the tax burden across multiple years. This requires filing Form 8818 with your tax return each year, and most people do not choose this route because it is more complicated.
If you have been holding the bond for many years and have not reported the interest annually, you can still choose to report it all in the year you cash it in. There is no penalty for having deferred the tax in previous years, as long as you report it when you redeem.
What to do if your bond is lost or damaged
If you lose a physical Series EE bond, you can request a replacement from the Treasury. You will need to file a claim with the Bureau of the Fiscal Service, providing proof that you owned the bond — typically a receipt from your purchase, a bank statement showing the purchase, or a previous tax return on which you reported the interest. The Treasury will investigate your claim and, if approved, issue a replacement bond with the same issue date and redemption value as the original.
The replacement process takes four to six weeks. During that time, you cannot redeem the bond. If the bond is damaged but still readable, most banks will still accept it for redemption, though they may require a letter from you explaining the damage. If the damage is severe enough that the bond's information cannot be read, treat it as lost and file a claim.
If your bond was destroyed in a disaster (fire, flood, etc.), you can file a claim without a receipt, but you will need to provide other documentation of ownership, such as insurance records or correspondence from the Treasury.
Comparing your redemption options
| Redemption Method | Speed | What You Need | Best For |
|---|---|---|---|
| Bank or credit union in person | 10–15 minutes | Physical bond, government ID | One or a few bonds; you need cash quickly |
| TreasuryDirect online | 1–2 business days | Electronic bond in TreasuryDirect account | Bonds you bought through TreasuryDirect; no need to leave home |
| Treasury by mail | 2–3 weeks | Physical bond, FS Form 1522, copy of ID | Many bonds; you want an official record from the Treasury |
Frequently Asked Questions
What if my Series EE bond is less than five years old?
You can still redeem it, but the Treasury will subtract three months of interest from your redemption value. For example, if your bond has earned $50 in interest and you redeem it at four years old, you lose about $1.25 in interest. You always receive at least your original purchase price back.
Do I have to pay state income tax on the interest?
No. Series EE bond interest is exempt from state and local income tax in all states. You owe federal income tax only. This is one reason some people buy Series EE bonds as part of their savings strategy.
Can I redeem a Series EE bond that someone else gave me?
Yes, but you will need to be listed as the owner or co-owner on the bond. If the bond is registered only in someone else's name, they must redeem it or sign a form authorizing you to redeem it on their behalf. Ask the bank or Treasury for the specific authorization form required.
What happens if I cash in a bond and then need the money back?
Once you redeem a Series EE bond, it is gone — you cannot reverse the transaction or get the bond back. If you think you might need the money, wait until you are certain before redeeming.
Do I need to report the redemption to anyone besides the IRS?
No. The bank or Treasury will send you a Form 1099-INT for your records and tax filing, but you do not need to notify any other government agency. Report the interest income on your federal tax return as ordinary income.