There is no government fine or statutory penalty for not cashing matured savings bonds, but the real penalties for not cashing matured savings bonds are financial and tax-related: the bond stops earning interest the day it matures, the IRS treats all of the accumulated interest as taxable income in the year of final maturity whether you redeem the bond or not, and if you ignore the 1099-INT the Treasury issues, standard IRS underpayment penalties start accruing. On a bond carrying $10,000 or more in deferred interest, the combined cost can run into thousands of dollars.
When Your Bond Actually Stops Earning
Final maturity is set by the Treasury and depends on the series.
- Series EE bonds stop earning 30 years from the issue date. Bonds issued in the mid-1990s are reaching final maturity now.1TreasuryDirect. EE Bonds
- Series I bonds also stop at 30 years. The earliest I bonds, issued in September 1998, reach final maturity in 2028.2TreasuryDirect. I Bonds Interest Rates
- Series HH bonds matured after 20 years. The last were issued in August 2004, so every HH bond has now reached final maturity.3TreasuryDirect. Cashing HH Savings Bonds
- Series E and H bonds all matured years ago. The last Series E bonds (1980) reached final maturity by 2010, and the last Series H bonds (1979) by 2009.
If you’re not sure where your bonds stand, the TreasuryDirect Savings Bond Calculator will show the exact maturity date, current value, and total interest earned for any EE, E, or I bond.4TreasuryDirect. Savings Bond Calculator
The Money You Lose by Doing Nothing
A matured bond earns 0%. Every day it sits unredeemed, you give up whatever that principal could earn in a high-yield savings account, a Treasury bill, or any other interest-bearing option. Over a few years of inaction, the forgone interest adds up.
Inflation compounds the damage. When the money earns nothing, its purchasing power falls by roughly the annual inflation rate. Five years at 3% inflation strips about 15% of what the money will buy. There’s no fine on paper, but the result is the same: your wealth quietly shrinks.
The Tax Bill Hits Whether You Cash the Bond or Not
This is the point most bondholders miss. If you’ve been deferring the interest on Series EE, E, or I bonds, which almost everyone does, the IRS treats all of that accumulated interest as taxable income in the year the bond reaches final maturity. Redemption is not required for the tax to be due.5TreasuryDirect. Tax Information for EE and I Bonds
The Treasury issues a 1099-INT for the year a bond matures, reporting all previously untaxed interest under the owner’s Social Security number.5TreasuryDirect. Tax Information for EE and I Bonds That interest goes on your federal return as ordinary income. For 2026, the top federal rate is 37% for single filers earning above $640,600 ($768,700 for joint filers), with lower brackets at 10%, 12%, 22%, 24%, 32%, and 35%.6Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Savings bond interest is exempt from state and local income tax.1TreasuryDirect. EE Bonds
The real problem is lump-sum recognition. A bond held for 30 years might have $8,000 or $15,000 in accrued interest, all landing on a single tax return. That spike can push you into a higher bracket for the year, raising the rate on your other income too. Someone normally in the 22% bracket could end up paying 24% or more on part of that interest.
Series H and HH bonds work differently. They paid interest semiannually by check or direct deposit, and that interest was taxed each year as it was received, so there’s no large deferred amount sitting untaxed at maturity. The exception: if you exchanged older E or EE bonds into HH bonds before the program ended in 2004, the deferred interest from the originals carries forward and becomes taxable when the HH bond matures, is redeemed, or is otherwise disposed of.7eCFR. 31 CFR Part 352 – Offering of United States Savings Bonds, Series HH
IRS Penalties if You Don’t Report the Interest
Because the 1099-INT is filed with the IRS at the same time it’s sent to you, the agency will eventually match it against your return. If you leave the interest off, the standard underreporting penalties apply:8Internal Revenue Service. Penalties
- Accuracy-related penalty of 20% of the underpayment when you understate your income.9Internal Revenue Service. Section 10 – Penalties and Interest Provisions
- Failure-to-pay penalty of 0.5% of the unpaid tax per month, up to 25%.
- Failure-to-file penalty of 5% of the unpaid tax per month if you skip filing altogether, up to 25%.9Internal Revenue Service. Section 10 – Penalties and Interest Provisions
Interest also runs on the unpaid tax from the original due date. Ignoring the form doesn’t erase the obligation; it just stacks penalties and interest on top of what you already owe.
Escheatment: How Your State Can Take Custody
Under the SECURE 2.0 Act, the Treasury is required to share information about unredeemed savings bonds with state governments. An “applicable savings bond” for this purpose is one more than three years past final maturity, held in paper form (or electronic without valid bank account information on file), and not yet redeemed.10TreasuryDirect. 2024 Report to Congress Under the SECURE 2.0 Act of 2022 States use that information to locate owners through their unclaimed property programs.
If your state’s unclaimed property office takes custody of the funds, the money isn’t lost. You can still claim it. But instead of a direct redemption through Treasury, you’ll file a claim through the state process, which generally requires proof of identity, proof of ownership, and patience. The Treasury Hunt online search tool was retired on September 30, 2025, so searches for unclaimed Treasury securities now go through state programs at unclaimed.org.11TreasuryDirect. Treasury Hunt
Paper bonds in a drawer carry their own risks: loss, theft, fire, water damage. Proving ownership of a bond you can’t produce is possible, but it means more paperwork and more waiting.
How To Cash a Matured Bond
If the bonds are held electronically in TreasuryDirect, redemption takes a few clicks. Log in, select the bond, choose full or partial redemption, and submit. Funds deposit into your linked bank account.12TreasuryDirect. Redeem Savings Bonds
For paper bonds, most banks will cash them for their own customers with valid identification. The Secret Service recommends that financial institutions require customers to have held an account for at least 12 months before redeeming bonds, and some banks enforce that or a similar policy.13Federal Reserve Financial Services. Savings Bond Redemptions Frequently Asked Questions Banks are not required to cash bonds for non-customers at all. If your bank won’t process the bond, or if the value exceeds its transaction limits, you can mail the bond directly to Treasury Retail Securities Services, P.O. Box 214, Minneapolis, MN 55480-0214.
Once a bond has matured, there’s no advantage to waiting. The interest has already stopped, the tax year has already been triggered or will be, and every additional month exposes you to inflation and, eventually, escheatment.