What Are War Bonds? History, Redemption, and Lost Bonds

War bonds are U.S. government debt securities first sold to civilians in May 1941 to help pay for World War II; the best-known version, the Series E savings bond, was marketed to the public as a patriotic way to lend money to the Treasury.¹ If you still hold one, the practical news is simple: every original war bond has reached final maturity, is no longer earning interest, and should be cashed. The accrued interest is taxable federal income in the year you redeem.

What a War Bond Is and When It Was Issued

Congress gave the Treasury the authority to borrow by issuing bonds through the Second Liberty Bond Act of 1917, now codified at 31 U.S.C. § 3102.² The Series E bond was issued under that authority from May 1941 through June 1980.¹ During the war it was marketed as a “war bond”; afterward it continued as a general savings instrument until the Treasury replaced it with the Series EE bond in 1980. Series EE bonds and Series I bonds are the versions sold today.

Why Old War Bonds Stopped Growing

Series E bonds used a discount pricing model instead of paying periodic interest. A $25 bond cost $18.75, and the gap between purchase price and face value represented the interest earned as the bond aged. The original maturity was ten years, but the Treasury extended that period multiple times, so most savings bonds end up earning interest for 20 to 30 years depending on their issue date.³

Because no Series E bond was issued after June 1980, every one of them has now hit its final maturity date. At that point the bond stops earning anything and simply sits as a non-earning asset. Holding it longer actually loses value in real terms, since inflation keeps eating purchasing power while no new interest accrues. The redemption value today is the original purchase price plus all the interest that accumulated during the earning years.

Federal Taxes on the Interest

Savings bond interest is subject to federal income tax but exempt from state and local income tax.⁴ Under 26 U.S.C. § 454, a cash-method bondholder has two ways to report that interest: include it each year as it accrues, or defer reporting until the bond is redeemed, disposed of, or reaches final maturity, whichever comes first.⁵

Most holders defer, which is why cashing a decades-old war bond typically triggers a large one-year tax bill: all the accumulated interest hits your return at once, and can push you into a higher bracket for that year. If you prefer the annual method instead, the election applies to all savings bonds you own and binds you in future years unless the IRS lets you switch back.⁵

You must report the interest on your federal return whether or not you receive a Form 1099-INT.⁶ To see the current redemption value and accrued interest on any paper bond you hold, use the savings bond calculator on TreasuryDirect.

One tax break that often comes up does not help war-bond holders: the education interest exclusion under 26 U.S.C. § 135 is limited to Series EE bonds issued after December 31, 1989, and to Series I bonds.⁷ Original Series E war bonds do not qualify, even if you spend the proceeds on tuition.

What Happens When the Bondholder Dies

When a bondholder dies, the full redemption value of their savings bonds, including accrued interest, is part of the gross estate for federal estate tax purposes.⁸ How the interest is taxed as income depends on an election the executor makes.

If the deceased used the cash method and had not been reporting interest annually, the executor can either:

Report all pre-death interest on the decedent’s final income tax return, so the person who inherits only owes tax on interest earned after the date of death; or
Skip that election, in which case the full accrued interest becomes income in respect of a decedent, taxable to the inheritor. The inheritor can keep deferring until the bond is cashed or reaches final maturity, and may claim a deduction for any federal estate tax attributable to the bond.⁸

Ownership transfers depend on how the bond is registered. A surviving co-owner is recognized as the sole owner on proof of the other co-owner’s death. A named beneficiary becomes the sole owner on proof of the registered owner’s death.⁹ If neither applies and the estate is being administered, the legal representative must provide letters of appointment dated within one year of submission.

How to Cash a Paper War Bond

The easiest route is a bank where you have an account. Banks that act as authorized paying agents for the Treasury can redeem paper bonds and pay you the current value on the spot, at no charge.¹⁰ Bring valid photo ID and sign the request for payment on the back of the bond. Not every bank handles savings bonds, and those that do may cap how much they will redeem in one visit, so call ahead.¹¹

If a bank won’t work, or if the bond belonged to someone who died, or you’re acting as a legal representative, you redeem by mail. Send the signed certificates with a completed FS Form 1522 to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150. Use insured or registered mail. The form asks for your Social Security number for tax reporting and your bank information for direct deposit.¹²

Expect it to take time. Mail-in redemptions where you are named on the bond take at least six weeks, and cases involving estates or bonds not registered to you typically take at least two months.¹³ If you have already converted paper bonds into electronic form in a TreasuryDirect account, you can redeem online by selecting a destination bank account.¹⁴

Signature Certification for Mail-In Redemption

Your signature on FS Form 1522 must be certified by an authorized officer, usually an officer or employee at a bank or other depository institution who applies the institution’s official seal or signature guarantee stamp.¹⁵ A notary public can also certify. Authorized paying agent banks typically provide the certification free to account holders.

Bonds Registered to a Minor

If a bond is in a child’s name and the child is too young to understand the transaction, either parent can cash it. The parent the child lives with, or the parent with legal custody, signs the request for payment and certifies the relationship and the child’s age.¹⁰ If the child does not live with either parent, the person providing the child’s primary financial support can make the request. If a court has appointed a guardian for the minor’s estate, that guardian redeems the bond by presenting a certified copy of the letters of appointment, dated within one year of submission.

Lost, Stolen, or Destroyed Bonds

If a paper bond is lost, stolen, or destroyed, file FS Form 1048 with the Treasury to request a replacement or payment.¹⁶ Use the standard version if you know the serial number. If you don’t, and the bond was issued in 1974 or later, Treasury’s online tools may locate the records and generate a version of the form that can be processed without it.

Replacements are issued as electronic bonds inside a TreasuryDirect account, not as new paper certificates. The form must be signed in front of a notary or certifying officer and mailed to the address printed on it. Lost-bond searches take considerably longer than ordinary redemptions; the Treasury currently estimates at least seven months.¹³ If the original bond resurfaces after a replacement has been issued, it belongs to the government and must be returned to Treasury Retail Securities Services.

Searching for Unclaimed Bonds

Billions of dollars in savings bonds have matured without ever being cashed. If you think a deceased relative bought bonds that were never redeemed, the search now runs through state unclaimed property programs. The Treasury’s own search tool, Treasury Hunt, was discontinued on September 30, 2025.¹⁷

Under the SECURE 2.0 Act, the Treasury must share information about matured, unredeemed bonds with states to help locate owners. The sharing covers bonds more than three years past final maturity that have not been cashed.¹⁸ To search, go to your state’s unclaimed property office; the National Association of Unclaimed Property Administrators maintains a directory at unclaimed.org. You may need the bond owner’s full legal name, their state of residence when the bonds were bought, and supporting documents such as ID or a death certificate if you are claiming as an heir.

1
TreasuryDirect. Historical and Retired Bonds
2
Office of the Law Revision Counsel. 31 USC 3102 – Bonds
3
U.S. Treasury Fiscal Data. Treasury Savings Bonds Explained
4
TreasuryDirect. Tax Information for EE and I Bonds
5
Office of the Law Revision Counsel. 26 USC 454 – Obligations Issued at Discount
6
Internal Revenue Service. Topic No. 403, Interest Received
7
Office of the Law Revision Counsel. 26 USC 135 – Income From United States Savings Bonds Used to Pay Higher Education Tuition and Fees
8
Internal Revenue Service. Publication 559, Survivors, Executors, and Administrators
9
eCFR. 31 CFR Part 315 Subpart L – Deceased Owner, Coowner or Beneficiary
10
eCFR. 31 CFR Part 315 – Regulations Governing U.S. Savings Bonds
11
TreasuryDirect. Cash EE or I Savings Bonds
12
TreasuryDirect. FS Form 1522 – Special Form of Request for Payment
13
TreasuryDirect. Contact Us
14
TreasuryDirect. How Do I…?
15
TreasuryDirect. Signature Certification
16
TreasuryDirect. Get Help for Lost, Stolen, or Destroyed EE or I Savings Bond
17
TreasuryDirect. Treasury Hunt
18
TreasuryDirect. 2024 Report to Congress Under the SECURE 2.0 Act of 2022