How to Cash In Savings Bonds

The U.S. Treasury currently offers two types of savings bonds available to individual investors: Series EE bonds and Series I bonds. Series EE bonds are purchased at face value and are guaranteed to double in value over 20 years. Series I bonds earn a composite interest rate tied to inflation, which makes them a popular choice when consumer prices are rising.

Older series — including Series E and Series HH — may also be redeemable depending on their issue date and maturity status. The U.S. Treasury provides a free savings bond calculator at TreasuryDirect.gov to help you determine the current value of any bond you hold before deciding when to redeem it.

You must hold Series EE and Series I bonds for at least 12 months before you can redeem them — the Treasury does not permit early cash-out before that point. This 12-month rule applies regardless of whether the bond is electronic or paper.

If you redeem a bond before it has been held for five full years, you forfeit the last three months of interest earned as a penalty. For example, cashing a bond at 18 months typically means you receive only 15 months of interest. After five years, you may redeem at any time with no penalty whatsoever.

Electronic savings bonds are held in your TreasuryDirect account at TreasuryDirect.gov. To redeem them, log in to your account, navigate to "ManageDirect," and then select "Redeem Securities." You will choose the specific bonds you want to cash and specify the redemption amount.

Proceeds from electronic bond redemptions are typically deposited into your linked bank account within one business day. You may redeem all or only part of a bond's value, as long as you redeem at least $25 and leave a minimum of $25 remaining in the bond if you make a partial redemption. Always save your confirmation for tax purposes.

Paper savings bonds can typically be cashed at your local bank or credit union, though not every financial institution accepts them. Call ahead to confirm your bank redeems savings bonds and ask about their identification requirements. You will generally need a government-issued photo ID and may need to have an account at that institution.

If your paper bond has a face value over $1,000 — or if you are redeeming bonds on behalf of a deceased owner — additional documentation may be required, such as a signature guarantee or probate paperwork. In those cases, you may need to mail the bonds to the Treasury's redemption center. The TreasuryDirect website provides mailing instructions and the required forms for these special circumstances.

Interest earned on U.S. savings bonds is subject to federal income tax, but it is generally exempt from state and local income taxes. You may choose to report the interest annually as it accrues or defer all reporting until the bond is redeemed or matures — the IRS permits both methods for most bondholders.

When you redeem a bond, your financial institution or the Treasury will issue a Form 1099-INT reporting the taxable interest for that year. There is also a potential education tax exclusion that may allow you to exclude savings bond interest from gross income if the proceeds are used for qualified higher-education expenses and you meet the applicable income limits. Consult IRS Publication 550 or a qualified tax professional to determine if you may qualify.

If your paper savings bond has been lost, stolen, or destroyed, you can request a replacement through the U.S. Treasury by completing FS Form 1048 (Claim for Lost, Stolen, or Destroyed United States Savings Bonds) and mailing it to the Treasury Retail Securities Site. The Treasury maintains ownership records for all issued bonds, so your claim can typically be verified without the original certificate.

Electronic bonds held in TreasuryDirect accounts cannot be lost in the same way since they exist as digital records. If you have forgotten your TreasuryDirect login credentials, the site offers an account recovery process. Keeping your contact information up to date in your account helps prevent access problems.