Where to cash your savings bonds

You can cash savings bonds at most banks and credit unions, or directly through the U.S. Department of the Treasury if you own them electronically. The easiest route depends on whether your bonds are paper or digital.

For paper bonds, walk into any bank or credit union where you have an account and ask to redeem them. You'll need to bring the physical bonds and a valid ID. Many banks will cash them same-day, though some may require you to have an account with them. Call ahead to confirm they redeem savings bonds — not every branch does.

For electronic bonds held through TreasuryDirect (the Treasury's online system), you redeem them directly on the TreasuryDirect website without leaving home. Log in, select the bonds you want to cash, and the money goes to your linked bank account within a few business days.

Key Takeaways

  • Paper bonds can be cashed at most banks and credit unions with a valid ID, though you should call first to confirm they offer this service.
  • Electronic bonds held in TreasuryDirect are redeemed online and deposited to your bank account within a few business days.
  • Series EE and I bonds have a one-year holding requirement before you can cash them, and a five-year penalty if you cash before five years have passed.
  • The amount you receive depends on the bond type, purchase price, and how long you've held it — interest accrues monthly but is only paid when you redeem.
  • If you lose a paper bond or it's destroyed, you can request a replacement through the Treasury, though the process takes several weeks.

Holding periods and early redemption penalties

You cannot cash Series EE or Series I bonds during the first year you own them, no matter what. This is a hard rule — the Treasury will not make exceptions.

If you cash a Series EE or I bond before it has been held for five years, you lose the last three months of interest. For example, if you've held the bond for three years and nine months, you get back only three years and six months of interest. This penalty applies every time, so timing matters if you're close to the five-year mark.

Series HH bonds (older bonds, no longer sold) have different rules — they can be redeemed after six months with no penalty, though you'll still owe federal income tax on the interest. Check your bond's series letter if you're unsure which rules apply.

What happens when you redeem

When you cash a savings bond, you receive the original purchase price plus all the interest that has accrued since you bought it. The interest is paid as a lump sum at redemption — you don't receive it in monthly or annual payments while you hold the bond.

The redemption value is calculated to the nearest dollar. If your bond's value is $1,247.63, you'll receive $1,248. The Treasury rounds up in your favor.

You are responsible for reporting the interest as income on your federal tax return for the year you redeem the bond. The bank or Treasury does not send you a tax form automatically, so keep your redemption receipt. If you cashed bonds worth more than $1,500 in interest during the year, the bank may issue a Form 1099-INT, but this is not may provide — you still owe tax on the interest whether or not you receive a form.

Cashing bonds at a bank versus the Treasury

Banks are faster for paper bonds if you need the money quickly. Most will cash them the same day you walk in, and you get cash or a deposit to your account immediately. The downside is that not every bank does this — some have stopped redeeming savings bonds because the volume is low. Always call ahead.

The Treasury is the only option for electronic bonds, and it's also free and straightforward. Log into TreasuryDirect, request the redemption, and the money appears in your bank account in three to five business days. There's no fee and no middleman.

If your bank refuses to redeem your paper bonds, you can mail them to the Treasury's Bureau of the Fiscal Service with a completed Form PD 1522 (Request for Payment of Savings Bonds). This takes four to six weeks and requires you to mail the physical bonds, which carries a small risk of loss in transit. Most people prefer the bank route for this reason.

What you need to bring or provide

For paper bonds at a bank, bring the bonds themselves and a valid government-issued ID (driver's license, passport, or state ID). Some banks may ask for a second form of ID or proof of address, though this is less common. If you're redeeming bonds that belong to someone else — a child's bonds, for example — you'll need documentation showing you have authority to do so, such as a guardianship order or power of attorney.

For electronic bonds through TreasuryDirect, you need only your login credentials. Make sure the bank account you have linked to your TreasuryDirect account is current and active, because the redemption money will be deposited there.

If you're mailing paper bonds to the Treasury, you'll need to complete Form PD 1522, sign it in front of a witness (a notary public or bank officer), and mail both the form and the bonds to the address listed on the form. Include a copy of your ID.

Lost, stolen, or damaged bonds

If you've lost a paper bond or it's been damaged beyond use, you can request a replacement through the Treasury. The process is slow — it typically takes six to eight weeks — and you'll need to provide proof of purchase if you have it (a receipt or bank statement showing the purchase). The Treasury will issue a replacement bond with the same issue date and value as the original.

If the bond was stolen, file a police report and include a copy with your replacement request. This doesn't speed up the process, but it documents the loss for your records.

Electronic bonds cannot be lost or stolen in the same way because they exist only in your TreasuryDirect account. If someone gains unauthorized access to your account, contact TreasuryDirect immediately and change your password. The Treasury can freeze your account while you investigate.

Tax considerations when you redeem

The interest you earn on savings bonds is subject to federal income tax but not state or local income tax. This is one of the few tax advantages of savings bonds — the interest is exempt from state taxation, which can save you money if you live in a high-tax state.

You have a choice about when to report the interest for tax purposes. Most people report it in the year they redeem the bond (the simplest approach). However, you can also choose to report the interest each year as it accrues, even though you don't receive it until redemption. This is called "reporting on an accrual basis" and is rarely chosen because it means paying tax on money you haven't received yet.

If you're redeeming a large number of bonds or bonds with significant interest, consider speaking with a tax professional about the timing. Redeeming bonds in a year when your income is lower can reduce the tax impact.

Frequently Asked Questions

Can I cash a savings bond before one year has passed?

No. Series EE and I bonds have a mandatory one-year holding period. You cannot redeem them before that time, even if you need the money urgently. If you purchased the bond less than a year ago, you must wait.

What if I cash my bond after four years instead of five?

You will lose the last three months of interest. So if you've held the bond for four years, you'll receive only three years and nine months of interest. The penalty is always three months of interest, regardless of when you redeem between year one and year five.

Do I have to pay state income tax on savings bond interest?

No. Savings bond interest is exempt from state and local income tax, though you still owe federal income tax on it. This is one reason they're popular in high-tax states.

How long does it take to get my money after I redeem?

At a bank, usually the same day or the next business day. Through TreasuryDirect, three to five business days. If you mail bonds to the Treasury, four to six weeks.

What if the bank won't cash my paper bonds?

Ask if another branch in the same bank system will do it, or try a different bank. If no bank will redeem them, you can mail them to the Treasury's Bureau of the Fiscal Service with Form PD 1522, though this takes significantly longer.