To redeem Treasury savings bonds, log in to TreasuryDirect if the bonds are electronic, or take paper bonds to your bank; if the bank won’t cash them, mail them to the Treasury with FS Form 1522. Series EE and Series I bonds must be held at least 12 months, and cashing before the five-year mark costs you the last three months of interest. All interest is subject to federal income tax in the year you redeem.
Check the Bond’s Value and Whether It’s Still Earning
Before you cash anything, find out what the bond is worth and whether it’s still earning. Series EE and Series I bonds earn interest for 30 years from the issue date, then stop.1eCFR. 31 CFR Part 351 Subpart B – Maturities, Redemption Values, and Investment Yields of Series EE Savings Bonds A matured bond sitting in a drawer is losing ground to inflation every month you leave it there.
Series HH bonds, which the Treasury stopped selling in 2004, have all reached final maturity as of August 2024.2TreasuryDirect. About U.S. Savings Bonds If you still hold HH bonds, cash them now.
Use the Treasury’s Savings Bond Calculator to find the current cash value. You’ll need the series, denomination, and issue date.3TreasuryDirect. Calculate the Value of Your Paper Bond(s) The cash value often differs from the amount printed on the paper. EE bonds sold between 1980 and April 1995 were purchased at half face value, so a bond printed with “$50” originally cost $25.4TreasuryDirect. EE Bonds 1980 Through April 1995 Series I bonds are always sold at face value and grow with an inflation-adjusted rate that resets every six months.
Holding Period and Early Redemption Penalty
You cannot cash a savings bond during the first 12 months after purchase. This applies to Series EE bonds issued since February 2003 and to all Series I bonds.1eCFR. 31 CFR Part 351 Subpart B – Maturities, Redemption Values, and Investment Yields of Series EE Savings Bonds5TreasuryDirect. I Bonds
Cash a bond between the one-year mark and the five-year mark and you forfeit the last three months of interest.5TreasuryDirect. I Bonds The redemption value will never drop below what you paid, but the penalty can sting on a bond that’s only been earning for a year or so. After five years, there’s no penalty.
Redeeming Electronic Bonds Through TreasuryDirect
If your bonds live in a TreasuryDirect account, this is the fastest route. Log in, go to ManageDirect, and under Manage My Securities, click Redeem Securities.6TreasuryDirect. Cashing EE or I Savings Bonds Select the bonds, confirm the transaction, and the funds transfer to your linked bank account through ACH.
Electronic bonds also allow partial redemptions. You can cash any amount of $25 or more as long as you leave at least $25 in the bond.6TreasuryDirect. Cashing EE or I Savings Bonds Handy if you need part of the money and want the rest to keep earning.
Redeeming Paper Bonds at a Bank
Most banks and credit unions will cash paper EE and I bonds on the spot. Bring the physical bond and a valid government-issued photo ID. The teller verifies the bond and your identity, then deposits the funds into your account.
The catch: banks are not required to cash bonds for non-customers. The Secret Service recommends that financial institutions only cash bonds for customers who have held an account there for at least 12 months.7Federal Reserve Financial Services. Savings Bond Redemptions Frequently Asked Questions Without an account, expect to be turned away or referred to TreasuryDirect. Some banks also cap the total they’ll redeem in a single visit, so call ahead if you’re cashing a stack.
Paper bonds cannot be partially redeemed. You cash the whole bond or none of it.6TreasuryDirect. Cashing EE or I Savings Bonds
Redeeming Paper Bonds by Mail
If your bank won’t help, mail the bonds to the Treasury. Fill out FS Form 1522, the Special Form of Request for Payment.8TreasuryDirect. FS Form 1522 – Special Form of Request for Payment The form asks for your contact information, Social Security Number, each bond’s serial number, and your bank routing and account numbers for direct deposit.
Whether you need certified signatures depends on the dollar amount. If the combined redemption value is $1,000 or less, sign the form and include a copy of your driver’s license, passport, or state ID. If the total exceeds $1,000, sign in the presence of a notary public or an authorized certifying officer at a bank or credit union, who applies an official seal.8TreasuryDirect. FS Form 1522 – Special Form of Request for Payment Other authorized certifiers include military commissioned officers (for service members and their families), judges, clerks of U.S. courts, and U.S. diplomatic officials abroad.9TreasuryDirect. href=”https://www.treasurydirect.gov/research-center/signature-certification/” target=”_blank” rel=”noopener”>Signature Certification Most people use their bank, where certification is usually free.
Mail the signed form and original bonds to:
Treasury Retail Securities Services
P.O. Box 9150
Minneapolis, MN 55480-915010TreasuryDirect. Contact Us
Use registered or certified mail so you have tracking on irreplaceable paper. Processing currently takes at least six weeks, and the Treasury warns it can take longer.10TreasuryDirect. Contact Us Payment arrives as a direct deposit to the account listed on your form.
If the Bonds Are Lost or the Owner Has Died
A missing paper bond isn’t a lost paycheck. The Treasury can replace or cash a lost, stolen, or destroyed bond as long as you can provide enough identifying information. File FS Form 1048, the claim form for missing bonds. If you don’t have the serial numbers, TreasuryHunt.gov can search using your Social Security Number and generate a version of the form with a reference number the Treasury can process.11TreasuryDirect. Get Help for Lost, Stolen, or Destroyed EE or I Savings Bonds You’ll need the approximate issue date or range, your name and address as they appeared on the bonds, and the total number missing.12TreasuryDirect. FS Form 1048 – Claim for Lost, Stolen, or Destroyed United States Savings Bonds Sign in front of a notary or certifying officer and mail the form. Replacements come electronically into a TreasuryDirect account.
When a bondholder dies, what happens next depends on how the bond was registered. A surviving coowner or named beneficiary becomes the sole owner and can redeem normally once they provide a certified copy of the death certificate. Without a surviving coowner or beneficiary, the bond becomes part of the estate. The estate’s legal representative can request payment or distribute the bonds to heirs, but must submit court-issued letters of appointment dated within the past year.13eCFR. 31 CFR Part 315 Subpart L – Deceased Owner, Coowner or Beneficiary These situations almost always route to Treasury Retail Securities Services by mail rather than a bank counter.
Taxes When You Cash In
Interest on savings bonds is subject to federal income tax but exempt from state and local income taxes.14TreasuryDirect. Tax Information for EE and I Bonds Most holders defer reporting the interest until they cash the bond or it matures, which means decades of accumulated interest can hit a single tax year. You can instead elect to report interest each year as it accrues, though few people do.
When you redeem, you’ll receive a Form 1099-INT showing the total interest earned. A bank that cashes the bond issues the 1099-INT at the time of the transaction or by January 31 of the following year. Redeem through TreasuryDirect and the 1099-INT posts to your online account by January 31.14TreasuryDirect. Tax Information for EE and I Bonds For paper bonds, the 1099-INT covers all interest over the bond’s entire lifetime, not just the final year.
Education Tax Exclusion
You may be able to exclude bond interest from federal income tax if you use the proceeds for qualified higher education expenses in the same year you redeem. The bond must have been issued in your name (or your spouse’s name) when you were at least 24 years old. The exclusion phases out at higher incomes. For 2025 returns, the phaseout begins at a modified adjusted gross income of $99,500 for single filers and $149,250 for joint filers, and disappears entirely at $114,500 and $179,250 respectively.15IRS. Publication 970 – Tax Benefits for Higher Education These thresholds adjust annually for inflation, so check the current IRS guidance for the year you plan to redeem.