How to Cash Savings Bonds

Here's what you need to know before redeeming savings bonds.

Backed by the U.S. government and often purchased as gifts or to fund education or retirement goals, savings bonds are considered one of the safest types of investments available. They’re also the only type of securities investment that can be owned by children under 18.

Now issued electronically rather than on paper, savings bonds take up to 30 years to mature, and they stop earning interest once they reach maturity. No state or local taxes are charged on bond interest, and you can defer federal tax until you redeem, or cash in, the bond or it reaches maturity. Additionally, some bonds used for qualified educational expenses earn you federal tax benefits.

Keep reading to find out how to redeem savings bonds and get the most from your investment.

Guide to Redeeming Savings Bonds

You must follow special procedures to cash in savings bonds. When redeeming them in person at a bank or mailing them in, you must have the paper bonds. Electronic bonds must be cashed in through the Department of the Treasury. Here are the steps for each bond-redemption method:

Redeeming Paper Bonds in Person

Follow these steps to redeem paper bonds in person:

  1. Gather the unsigned paper bonds you want to cash, any proof of identity your bank requires, and, if needed:
    Proof — a marriage license, divorce papers or a court order, for example — of your name change if the name on the savings bond doesn’t match your current name.
    The certified death certificate of the previous owner of the savings bond, if you are a beneficiary.
  2. Go to a bank where you are an account holder, if possible, to redeem the bonds. You have a better chance of being able to redeem bonds at a bank where you have an account.

Typically, you can redeem an unlimited number of bonds at a bank where you have an account. Bond owners who don’t hold own an account might still be able to cash in savings bonds, but there could be limits on how many you can redeem. Paper bonds must be cashed in full; partial redemptions aren’t allowed.

Learn: Are Bonds Safe and FDIC-Insured?

Redeeming Paper Bonds by Mail

Follow these steps to redeem paper bonds by mail:

  1. Ask a certifying officer at your bank to certify your signature in the “Request for Payment” section on the back of each savings bond.
  2. Mail the bonds and FS Form 5396 or your Social Security number and your direct deposit information in the form of a canceled check to the Treasury Retail Securities Site.

Redeeming Electronic Bonds

Follow these steps to redeem electronic bonds:

  1.  Visit TreasuryDirect.gov and log in to your account.
  2. Use the link in ManageDirect for redeeming securities.
  3. Redeem a minimum of $25 or any amount above $25 in one-cent increments. Leave at least $25 in the TreasuryDirect account if you only redeem a partial amount of a bond’s value.
  4. Watch for the cash to be credited to your checking or savings account, usually within two business days.

When to Cash in Savings Bonds

You can redeem an I bond, E bond or EE bond after 12 months, but redeeming before five years will cost you the most recent three months’ interest. To put that in perspective, the I bond rate for a bond purchased between Nov. 1, 2017 and April 30, 2018 is 2.58 percent during the first six months you own it, and interest accrues monthly for up to 30 years, according to TreasuryDirect.

To find out the current value of your paper savings bond, use the savings bond calculator located at TreasuryDirect.gov. You will need the type, amount, serial number and issue date for each bond you wish to calculate.

To find out the current value of your electronic Series I or Series EE savings bonds, log in to your TreasuryDirect account and click on the “Current Holdings” tab inside your account.

See: Advantages and Disadvantages of Treasury Bonds

Where to Cash Savings Bonds

The quickest and easiest way to cash in your paper savings bonds is to take them to your local bank, according to the U.S. Department of the Treasury. In the event your bank is unable to cash your savings bonds, you’ll have to mail them to this address to redeem them:

Treasury Retail Securities Site
P.O. Box 214
Minneapolis, MN 55480-0214

Banks will not cash savings bonds presented and signed by an individual acting under a power of attorney. These individuals must fill out a power-of-attorney form, FS Form 5188, and mail it to the Treasury Retail Securities Site.

When you want to cash in electronic bonds, you’ll need to visit TreasuryDirect.gov.

Up Next: How to Choose the Best Bonds for your Financial Plan