You can redeem Series EE bonds through TreasuryDirect online, by mail, or through a bank or broker

The method depends on where you hold the bonds. If you own them in a TreasuryDirect account (the U.S. Department of the Treasury's online platform), you can redeem them yourself through your account in minutes. If a bank or brokerage holds them, you contact that institution directly. If you have paper bonds issued before 2012, you'll need to go through a bank or the Treasury.

Before you redeem, check the bond's issue date. Series EE bonds have a 20-year original maturity period, though they continue earning interest for up to 30 years. You can redeem them anytime after five years without penalty. If you cash them in before five years have passed, you lose the last three months of interest as a penalty.

The redemption process itself is straightforward once you know which route applies to you. The money typically arrives within a few business days.

Key Takeaways

  • TreasuryDirect account holders can redeem bonds online by logging in, selecting the bond, and requesting the redemption through their account dashboard.
  • Paper Series EE bonds and those held at banks or brokerages require you to contact the institution holding them or submit a form to the Treasury.
  • Redeeming before five years have passed costs you the last three months of accrued interest, so check your issue date first.
  • The Treasury reports redemption proceeds to the IRS, and you will owe federal income tax on the interest earned, though you can defer this tax if you roll the proceeds into education savings bonds.

Redeeming through TreasuryDirect

Log into your TreasuryDirect account at treasurydirect.gov using your username and password. Navigate to "Manage My Securities" and locate the Series EE bond you want to redeem. Click on the bond and select the redemption option. You'll see the current value, including the interest earned to date, and the redemption amount you'll receive.

Confirm the redemption request. The Treasury will process it and deposit the funds into the bank account linked to your TreasuryDirect account. This typically takes three to five business days. You'll receive a confirmation number for your records.

If you don't have a TreasuryDirect account but own Series EE bonds issued after 2012, you can set one up at treasurydirect.gov. You'll need a Social Security number, email address, and a U.S. bank account for deposits and withdrawals.

Redeeming paper bonds or bonds held elsewhere

If you hold paper Series EE bonds (issued before 2012) or bonds registered at a bank or brokerage, contact the institution holding them. Banks and brokerages have their own redemption processes, which usually involve filling out a form and providing identification.

For paper bonds, you can also mail them directly to the Treasury. Download Form PD 1239 from the Bureau of the Fiscal Service website (fiscal.treasury.gov), complete it, and mail it along with your bonds to the address listed on the form. Include a copy of your ID. The Treasury will send you a check or deposit funds to a bank account you specify. This method takes longer — typically two to four weeks — so use it only if you cannot reach a bank or brokerage.

If you've lost a paper bond, you can still redeem it. Contact the Treasury's Savings Bonds Operations Center at 1-844-284-2676 to report it and request a replacement or redemption.

Understanding the five-year holding period and interest penalty

Series EE bonds impose a three-month interest penalty if you redeem them before five years have passed. This means if you cash in a bond at year three, you forfeit the interest earned in the most recent three months. The penalty applies to all Series EE bonds regardless of when they were issued.

Calculate the impact before redeeming early. If your bond has earned $200 in interest but you're redeeming at year four, you'll lose roughly three months' worth of that interest. The exact amount depends on the current interest rate and how long the bond has been earning at that rate. TreasuryDirect shows you the redemption value before you confirm, so you can see exactly what you'll receive.

If you're redeeming at year five or later, there is no penalty. You receive the full current value of the bond, including all accrued interest.

Tax reporting and what happens after redemption

The Treasury reports all Series EE bond redemptions to the IRS on Form 1099-INT. You owe federal income tax on the interest earned, not on your original principal. The interest is taxed as ordinary income in the year you redeem the bond.

You have the option to defer tax reporting until you redeem the bond, or you can report the interest each year as it accrues. Most people choose to defer because it simplifies record-keeping. When you redeem, you'll owe tax on all the interest earned over the life of the bond.

If you used the bond to pay for may have access to education expenses, you may be able to exclude the interest from your taxable income under the Education Savings Bond Program. This requires meeting income limits and other conditions. Consult a tax professional to determine whether you may have access to, as the rules are specific and the income thresholds change annually.

What to do if you can't find your bonds

If you own bonds but can't locate them, start by checking TreasuryDirect. Log in and search your account for the bonds. If they're registered there, you can redeem them directly.

If the bonds are not in TreasuryDirect and you don't know where they are, contact the Treasury's Savings Bonds Operations Center at 1-844-284-2676. Have your Social Security number and the approximate issue date ready. The center can search their records and tell you whether the bonds exist and where they're held. If they're paper bonds, the center can help you redeem them or request a replacement.

If you inherited bonds from someone else, the process is similar. Contact the Treasury or the institution holding the bonds with the deceased person's Social Security number and your relationship to them. You'll need to provide documentation of the death and your authority to redeem.

Frequently Asked Questions

What if I redeem my bond before five years — do I lose the principal too?

No. You only lose three months of interest. Your original principal is always returned in full. If you invested $100 and it earned $15 in interest over four years, you'd receive approximately $112 (the $100 principal plus $12 in interest, minus the three-month penalty).

Can I redeem only part of a Series EE bond?

No. Series EE bonds are redeemed in full. You cannot cash in half a bond or a portion of it. If you need only part of the value, you would have to redeem the entire bond and reinvest the excess elsewhere.

How long does it take to receive the money after I redeem?

Through TreasuryDirect, funds typically arrive in three to five business days. Through a bank or brokerage, timing depends on the institution but is usually similar. Paper bonds mailed to the Treasury take two to four weeks.

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

No. Series EE bond interest is exempt from state and local income tax. You owe only federal income tax on the interest earned. This is one reason Series EE bonds are popular for long-term saving.

What happens if I redeem a bond and don't report the interest on my taxes?

The Treasury reports the redemption to the IRS on Form 1099-INT, so the IRS will know about it. Failing to report the interest can result in penalties and interest charges on the unpaid tax. It's important to include the interest in your tax return for the year you redeem the bond.