A step-by-step guide to cashing your savings bond (2024)

US savings bonds are a safe way to invest your money with a fixed interest rate that isn’t subject to state or local income taxes.

But how do you cash a savings bond? And what if you need to cash a savings bond before the maturity date? The steps for cashing in a savings bond depend on which type of bond you have, how you want to receive payment and how much the bond or bonds are worth.

What are savings bonds?

Savings bonds — also known as debt securities — are available for purchase through the US Department of the Treasury to fund the borrowing needs of the US government. When you buy a savings bond, you lend the government money. Later, when you cash the savings bond, you receive the amount you paid for the bond plus interest.

Currently, you can purchase the following two types of electronic savings bonds online from the US government:

• Series EE US Savings Bonds: Series EE bonds have a fixed interest rate for the first 20 years and are guaranteed to double in value.
• Series I US Savings Bonds: Series I bonds’ interest rates can change every six months based on inflation.

Electronic savings bonds can be purchased in amounts of $25 to $5,000 in 1-cent increments each year. For example, you could buy a savings bond for $25.01 or $307.11.

If you buy paper savings bonds, you must keep the bonds safe. The only way to purchase a Series I paper savings bond is to use your tax refund as payment and you can buy any amount up to $5,000 in $50 increments.

You may be issued multiple bonds to fill your order. They are only available in Series I in the following denominations:

• $50
• $100
• $200
• $500
• $1,000

When is it worth cashing in a savings bond?

The longest you can hold Series EE bonds and Series I savings bonds is 30 years, at which time they will have reached their final maturity date and will no longer earn interest. You must hold a savings bond for at least 12 months before you can cash it in. But you can choose to cash in a bond any time in between. So how do you decide when to cash in savings bonds?

One factor to consider is that if you cash in your savings bonds before five years, you’ll lose the final three months of interest. For some investors, this may be enough incentive to hold onto bonds until at least the five-year mark.

Here are some reasons to cash in your savings bonds.

You need to pay off debt

Earning interest is great, but if you’re drowning in debt, paying off that debt may end up saving you more money in the long run.

Debt can get expensive, whether it’s interest rates, outstanding fees, or just a high balance you need to pay off. Using your savings bond is one way to chip away at debt or pay it off entirely.

You need to make a big purchase

If you’re planning to buy a home, car, or another large purchase, it might be worth cashing in a savings bond to access those funds.

You are in search of higher returns

Savings bonds are very secure, but the interest you’ll earn on them may not match the potential return you’d get on some other investments, such as an S&P 500 index fund or some high-yield savings accounts or CDs. Therefore, you may decide to cash in your savings bonds and put your funds elsewhere.

The bond reached maturity

This one is simple. When your savings bond hits its final maturity date, it’s time to cash it in. Savings bonds stop earning interest after 30 years.

Checking the maturity date

The maturity date is when your bond is due back to you, the investor. Before you cash your savings bond, you’ll need to check its maturity date to ensure it’s eligible for payment. Each of the two types of savings bonds, Series EE and Series I, has a final maturity date of 30 years from the date the bond was purchased.

You can cash in your savings bond as early as 12 months after your original purchase. If you cash the savings bond within five years of the issue date, you’ll lose the last three months’ worth of interest. Savings bond maturity dates are set by the US Treasury.

To find the maturity date of your paper Series EE or Series I bonds:

1. Check the upper right corner of your paper savings bond to find the issue date
2. Your bond’s final maturity date will be 30 years from the issue date

To find the maturity date of your electronic Series EE or Series I bonds:

1. Log into your TreasuryDirect account
2. Click the Current Holdings tab
3. You’ll find a list of details about your savings bond, including its maturity date

Gather required documentation

The documentation you’ll need to cash in your savings bond depends on whether you’re cashing in a paper or electronic bond.

If you’re cashing in an electronic bond, you don’t need any additional documentation — everything can be completed within your TreasuryDirect account.

If you’re cashing in a paper savings bond of $1,000 or less, you’ll need FS Form 1522 and a copy of your driver’s license, passport, state ID or military ID. If the bond amount is more than $1,000, you must have your signature certified by a notary or certifying officer.

Where to cash the savings bond

Where to cash savings bonds will also depend on whether you have an electronic or paper savings bond. The only option for cashing electronic savings bonds is by logging in to your TreasuryDirect account online. If you have paper savings bonds, you can fill out the appropriate form and mail it and the bonds you want to cash to the Treasury Retail Securities Services — the address is listed on FS Form 1522.

Additionally, you may be able to cash your paper savings bonds at your bank or credit union.Call your financial institution ahead of time and ask whether it cashes savings bonds, if there is a limit on how much it will cash at one time and what identification or other documents you will need.

Completing the redemption process

How to cash in electronic savings bonds

When redeeming a single electronic savings bond, you can choose to cash part or all of it. When redeeming multiple bonds at the same time, they must all be redeemed in full and deposited at the same financial institution. Follow these steps:

1. Log in to your TreasuryDirect account.
2. Go to the ManageDirect tab.
3. Locate the “Manage My Securities” heading and click “Redeem Securities.”
4. Select the type of security you wish to redeem.
5. Select up to 50 bonds to redeem and click “Submit.” If you select a single bond, you can choose if you want to redeem all or part. However, you must redeem at least $25 and leave at least $25 remaining on the bond.
6. Select the destination for the funds.
7. Click “Review” to review the details of the transaction.
8. Click “Submit” to finalize the transaction.
9. Once you authorize the redemption of your bond(s), they will be deposited in your checking or savings account within two business days.

How to cash in paper savings bonds

Unlike an electronic savings bond, you must cash your entire paper savings bond, as partial bond redemption isn’t allowed. You can mail in the savings bonds for redemption or cash them at your local bank or credit union.

To mail in your savings bonds, do the following:

1. Get FS Form 1522 from the TreasuryDirect website, which has three sections.
2. Section 1: List all the individuals or entities named on the bonds. List the issue date and serial number for each bond you want to redeem.
3. Section 2: List the Social Security number or EIN that is being used for the redemption. Enter the bank routing and account numbers where you would like the bonds to be deposited.
4. Section 3: If the amount of bonds being redeemed is $1,000 or less, you only need to sign the form, provide your contact information and include a copy of your driver’s license, passport, state ID or military ID. If the redemption amount is more than $1,000, you must sign the form in the presence of a certifying officer or notary public who will sign and stamp the form.
5. Mail the completed form, the bonds for redemption and any required identifying information to the P.O. box listed on page 4 of the form.

Finding out how much your savings bond is worth

You can log into your TreasuryDirect account to see how much your savings bond is worth. You’ll see key details, such as how much you deposited, your interest rate, the bond’s maturity date and its current value in your account details.

You can also use the TreasuryDirect calculator to find out how much your paper savings bond is worth. You’ll need some important details including the type of bond you have, how much you invested, the bond’s serial number and the issue date. This is only a calculator for paper bonds, so if you want to find out how much your electronic savings bonds are worth, you’ll need to log into your TreasuryDirect account.

Options for receiving payment

Electronic savings bonds

When cashing electronic savings bonds, you can opt to redeem the full amount or a partial amount. If you choose a partial amount, you must redeem at least $25, and there must be at least $25 left on the bond. You can choose to have the funds deposited in either a bank account on file with TreasuryDirect or your Zero-Percent Certificate of Indebtedness.

Paper savings bonds

When cashing paper savings bonds, you must cash the entire bond. If you mail in the bond for redemption, the funds will be deposited into the checking or savings account you designated on the redemption form. If you take your savings bonds to a bank, you’ll receive the cash value for each bond. However, banks may limit how much they will cash at a time.

Tax considerations when cashing savings bonds

Besides knowing how to redeem savings bonds, it’s also important to know the tax considerations.

“Interest on savings bonds is subject to federal income tax but not state or local tax,” said Dr. Lei Han, CPA, associate professor of accounting at Niagara University. “Owners of bonds are responsible for paying taxes on interest. Owners can choose to include the interest on their tax return for the year of redemption or maturity or to report interest income yearly. Taxpayers may not have to pay taxes on interest if certain types of savings bonds are used to pay for qualified education expenses.”

Whether you cash in your savings bonds at a bank or through your TreasuryDirect account, you will receive a 1099-INT reporting the interest you received that you will use when you file your taxes.

Additional reporting by Dori Zinn