Do Credit Unions Cash Savings Bonds: Eligibility, ID, and Limits

Yes, credit unions do cash savings bonds, but only if the credit union has qualified with the U.S. Treasury as a paying agent. Once a credit union holds that status, federal rules require it to redeem eligible paper Series EE and Series I bonds during regular business hours for anyone who can prove they are the owner or co-owner, whether or not that person is a member.¹ Not every credit union has applied, so call ahead before you make the trip.

Which Credit Unions Are Authorized

Paying agent status is granted by a Treasury Retail Securities Site after a credit union applies under 31 CFR Part 321. The certificate covers all of the institution’s branches.² A credit union that has not qualified has neither the obligation nor the authority to cash your bond.

Even at a qualified paying agent, expect some practical limits. Many credit unions cap how much they will redeem in a single transaction, and larger redemptions may need management approval. These caps are institution-level policies rather than federal rules. A teller can also decline to cash a bond that is altered or damaged in a way that hides the serial number.

What To Bring

To cash a paper bond at a credit union, you need three things:

A government-issued photo ID, such as a driver’s license or passport. The name on the ID must match the name printed on the bond.
Your Social Security number, which the credit union uses to report the interest to the IRS.
The paper bond itself. Do not sign the back at home. You sign in front of the teller, and your signature has to match the owner name on the front.

If you are mailing bonds to the Treasury instead of visiting a branch, a certified signature is required when the total value is more than $1,000.³ At the credit union, the teller handles identity verification directly.

Check Eligibility and Value First

Series EE and Series I bonds have to be held at least 12 months before you can cash them.³ Redeem within the first five years and you forfeit the last three months of interest as an early-redemption penalty.⁴ Both series stop earning interest after 30 years, so there is no reason to hold longer than that.

Before you leave the house, look up what the bond is actually worth. TreasuryDirect’s free Savings Bond Calculator gives the current redemption value based on the series, denomination, and issue date.⁵

What Happens at the Teller Window

The teller checks your ID, examines the bond, and looks up its current value in Treasury redemption tables. That value is your original purchase price plus accrued interest. You will be asked whether you want federal income tax withheld from the interest portion at the time of redemption, which can make tax filing easier later.

You can take the proceeds as cash or as a deposit into a credit union account. The credit union gives you a receipt showing the serial number, the interest paid, and any tax withheld. Keep it. If the interest totals $10 or more, the credit union will send you IRS Form 1099-INT the following January reporting the income.⁶

Cashing a Bond Registered to a Minor Child

A parent can redeem a bond in a child’s name at a credit union when the child is too young to understand a request for payment, you are the child’s parent, and the child lives with you or is in your legal custody.⁷

On the back of the bond you write a short certification giving the child’s name, Social Security number, and age, confirming residency or custody, and stating the child is not old enough to make the request. You sign “on behalf of [child’s name], a minor.” The teller verifies that certification along with your own ID.⁷ If the credit union declines to process it, you can mail the bond with FS Form 1522 to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150.⁸

Cashing a Bond After the Owner Dies

What happens next depends on how the bond was registered. If a surviving co-owner is named, that person becomes the sole owner and can cash the bond at a credit union with the bond, valid ID, and a certified copy of the death certificate. A named beneficiary who is not a co-owner becomes the owner the same way and can redeem without probate.

If no co-owner or beneficiary is listed, the bond is part of the estate. When the estate is not being formally administered, a qualifying relative such as a surviving spouse or next of kin can use FS Form 5336 to request payment or transfer, so long as the total value is $100,000 or less. If the estate is in formal administration, the court-appointed representative handles redemption. These paths usually go through Treasury Retail Securities Services by mail rather than through a credit union branch.

If the Credit Union Can’t or Won’t Cash Your Bond

If your credit union is not a paying agent, or will not process a particular bond, any bank or credit union that does hold paying agent status can do it. Paying agent status is not limited to credit unions. Call before you go.

You can also skip the branch entirely and mail your bonds to the Treasury. Complete FS Form 1522, get your signature certified if the total value is more than $1,000, and send everything to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150.⁸ There is no limit on the value or number of bonds you can cash this way, and the Treasury mails a Form 1099-INT the following January.³

Two boundaries are worth flagging. Electronic bonds held in a TreasuryDirect account cannot be cashed at a credit union at all; you log into TreasuryDirect, use the “Cash In” function, and the funds arrive in a linked account by ACH. The 12-month holding rule and the three-month interest penalty apply to electronic bonds the same way.³ Series HH bonds also cannot be cashed at any credit union; they are redeemed only through Federal Reserve Banks or the Bureau of the Fiscal Service.⁹

Taxes on the Interest

Savings bond interest is subject to federal income tax but exempt from state and local income tax.¹⁰ Most bondholders wait to report the interest until they cash the bond, but you may instead report the annual increase in value each year as it accrues.¹¹ Whichever method you choose has to be applied consistently to all your Series EE and I bonds. In the year you cash a bond, any previously unreported interest is taxable, and you report it based on the 1099-INT.¹²

You may be able to exclude the interest from federal tax entirely if you use the proceeds for qualified higher education expenses (tuition and fees at eligible institutions for yourself, your spouse, or a dependent). The bonds must be Series EE or I issued after 1989, you must have been at least 24 years old when they were issued, and your modified adjusted gross income must be under the annual IRS limit. Married filing separately is not eligible. Claim the exclusion on IRS Form 8815; the income thresholds adjust each year for inflation.¹³

1
eCFR. 31 CFR Part 321 – Payments by Banks and Other Financial Institutions of Definitive United States Savings Bonds and United States Savings Notes (Freedom Shares) – Section 321.10
2
eCFR. 31 CFR 321.3 – Procedure for Qualifying and Serving as Paying Agent
3
TreasuryDirect. Cash EE or I Savings Bonds
4
TreasuryDirect. I Bonds
5
TreasuryDirect. Calculate the Value of Your Paper Savings Bond(s)
6
Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID
7
TreasuryDirect. Cashing Paper Bonds for a Young Child
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TreasuryDirect. FS Form 1522 – Special Form of Request for Payment of United States Savings and Retirement Securities
9
eCFR. 31 CFR Part 352 – Offering of United States Savings Bonds, Series HH
10
TreasuryDirect. Tax Information for EE and I Bonds
11
Internal Revenue Service. Publication 550 – Investment Income and Expenses
12
Internal Revenue Service. Savings Bonds 1
13
Internal Revenue Service. Form 8815 – Exclusion of Interest From Series EE and I U.S. Savings Bonds