A war bond is a debt security the U.S. government sold directly to civilians to help pay for military operations, most famously during World War I and World War II. You lent the Treasury money by buying the bond at a discount, and the government paid you back the full face value when the bond matured years later. War bonds are no longer issued, and every Series E bond from the World War II era has stopped earning interest, so if one is sitting in a drawer, it is simply waiting to be cashed.
How a War Bond Worked
War bonds were built so almost anyone could afford one. Face values started as low as $25, and the bonds sold at a discount: a $25 bond typically cost $18.75. You paid that price upfront, received nothing in the meantime, and collected the full $25 at maturity. The gap between the purchase price and the payout was your return. In modern terms, it was a zero-coupon security — no periodic interest checks, just a lump sum at the end.
The original maturity was 10 years, but the Treasury later extended the interest-bearing life of these bonds to 30 or 40 years depending on the issue date. War bonds were also non-marketable and registered. You could not sell one to another person on the open market; you either held it to maturity or cashed it in with the government, and only the registered owner, co-owner, or named beneficiary could redeem it.
Liberty Bonds and Series E Bonds
Two campaigns account for almost everything a reader is likely to be holding or asking about.
The first was the Liberty Bond program of World War I. The Treasury ran five offerings between 1917 and 1919, plus a final “Victory Loan.” About 20 million Americans bought more than $21 billion in Liberty Bonds, which covered roughly two-thirds of the war’s cost.1Architect of the Capitol. Liberty Bond Rally, U.S. Capitol, Photograph, 1918 Unlike the later savings bonds, Liberty Bonds were marketable, meaning their prices moved on secondary markets and some holders sold at a loss when conditions shifted.
The second was the Series E bond program of World War II. Introduced on May 1, 1941 as “Defense Bonds” and renamed “War Bonds” after Pearl Harbor, Series E bonds were the non-marketable, discount bonds most people picture: $18.75 in, $25 out.2TreasuryDirect. The Volunteer Program and Series E Savings Bonds Roughly 85 million Americans bought about $185 billion in them by the end of the war, often through payroll deductions marketed under the slogan “everybody every payday.”3TreasuryDirect. The Payroll Savings Plan The Series E stayed in circulation as a general retail savings product long after the war; the Treasury kept selling them until June 1980, when Series EE bonds took over.4TreasuryDirect. Historical and Retired Savings Bonds
Do War Bonds Still Earn Interest?
No. Every Series E bond had stopped earning interest by 2010 at the latest. Holding one longer does not add to its value. It only delays paying the tax on the interest that has already accrued. If you have paper war bonds, the practical move is to cash them.
How to Cash an Old War Bond
Many banks will still redeem paper savings bonds, but policies vary. Some cap how much they will cash at one visit, and some do not handle redemptions at all. Call ahead and ask what identification you need to bring. A paper savings bond must be redeemed for its full value; partial redemption is not allowed.5TreasuryDirect. Cashing Savings Bonds
If your bank will not do it, or if the bonds total more than $1,000, you can redeem them by mail. Complete FS Form 1522, have your signature certified by a bank officer, and send the form with the physical bonds to the Treasury Retail Securities Services office in Minneapolis.5TreasuryDirect. Cashing Savings Bonds
Lost, Stolen, or Damaged Bonds
File a claim using FS Form 1048. The serial number helps, but if you do not have it, the Treasury can search its records using the approximate purchase date, your Social Security number, and the names on the bond. You will need to sign the form in front of an authorized certifying officer at a bank or credit union. Any replacement for a Series EE or Series I bond is issued electronically into a TreasuryDirect account rather than reissued on paper.6TreasuryDirect. Filing a Claim for Lost, Stolen, or Destroyed United States Savings Bonds and Notes
Searching for Unclaimed Bonds
The Treasury’s old “Treasury Hunt” search tool was retired in September 2025 under changes from the SECURE Act 2.0. Inquiries about unclaimed Treasury securities now go through the individual states’ unclaimed property programs. Start at unclaimed.org, run by the National Association of Unclaimed Property Administrators, and search the state where the original purchaser lived when the bond was bought.7TreasuryDirect. Treasury Hunt
Taxes When You Cash One
Interest on U.S. savings bonds, including old Series E war bonds, is subject to federal income tax but exempt from state and local income tax. For most bondholders, the entire accumulated interest is reported in the year the bond is cashed, which can push you into a higher bracket if you redeem a large batch at once. The bank or Treasury will issue a 1099-INT for any bonds you cash during the year.8Internal Revenue Service. Savings Bonds 15TreasuryDirect. Cashing Savings Bonds One tax break worth knowing about does not apply here: the education savings bond interest exclusion covers only eligible Series EE and Series I bonds issued after 1989, not Series E war bonds.9TreasuryDirect. Using Savings Bonds for Education
Can You Still Buy a War Bond?
Not under that name. The U.S. government no longer issues anything branded as a war bond. Military spending is funded through the same Treasury securities that cover the rest of the federal budget: Treasury Bills (4 to 52 weeks), Treasury Notes (2 to 10 years), and Treasury Bonds (20 or 30 years), all of which trade freely on secondary markets.10TreasuryDirect. About Treasury Marketable Securities11TreasuryDirect. Treasury Bonds
The direct descendants of the old war bonds are Series EE and Series I savings bonds. Like Series E, they are non-marketable, aimed at individual investors, and bought directly from the government. The minimum purchase is $25, both are now electronic only through TreasuryDirect, and the annual purchase cap is $10,000 per person for each type.12TreasuryDirect. Comparing EE and I Bonds13TreasuryDirect. How Much Can I Spend/Own? Series EE bonds sell at face value and pay a fixed rate. Series I bonds combine a fixed rate with an inflation adjustment that resets every six months based on the Consumer Price Index, which is why they tend to be the more popular pick when prices are rising.14TreasuryDirect. I Bonds Interest Rates Opening a TreasuryDirect account requires a Social Security number, a U.S. address, and a linked bank account.15TreasuryDirect. Open an Account
The mechanics are recognizably the same as the Series E: you lend the government money, you cannot trade the bond, and you get a modest guaranteed return. What has disappeared is the campaign around it.