You can cash an EE bond at your bank or directly through TreasuryDirect, but the method depends on how old the bond is and where you bought it

An EE savings bond becomes cashable 12 months after you buy it. If you cash it before five years have passed, you lose the last three months of interest as a penalty. After five years, you can cash it without penalty at any time. The actual process is straightforward — you either walk into a bank with the physical bond, or you log into your TreasuryDirect account online and request the redemption there.

The method you use depends on whether your bond is paper or digital. Paper bonds issued before 2012 can only be cashed at a bank. Digital bonds purchased through TreasuryDirect can be cashed online. If you have an older paper bond and want to avoid the bank trip, you can convert it to a digital bond first, though that adds a step.

Key Takeaways

  • EE bonds must be held for at least 12 months before you can cash them, and cashing before five years costs you three months of interest.
  • Paper bonds go to your bank; digital bonds go through your TreasuryDirect account online.
  • The bank will verify the bond is legitimate, confirm your identity, and deposit the cash into your account within a few business days.
  • You will owe federal income tax on the interest earned, but not state or local tax, and you can report it all in the year you cash it or spread it across years if you prefer.

Cashing a paper EE bond at your bank

Bring the physical bond and a government-issued ID to any bank where you have an account. You do not have to use the bank that issued the bond originally — any bank that handles savings bonds will cash it. Call ahead to confirm the branch handles bond redemptions, because some smaller branches do not.

The teller will examine the bond to confirm it is genuine, check that the serial number has not been reported lost or stolen, and verify your identity. They will ask you to sign the back of the bond in front of them. The bank then sends the bond to the Federal Reserve for final verification, which usually takes three to five business days. Once cleared, the bank deposits the cash into your account.

Bring documentation showing you are the registered owner or an authorized representative. If you are cashing a bond registered to someone else — a parent cashing a bond issued to a child, for example — you will need proof of that relationship and possibly a power of attorney or guardianship papers. Ask the bank what they need before you go in.

Cashing a digital EE bond through TreasuryDirect

Log into your TreasuryDirect account at treasurydirect.gov using your username and password. Navigate to the "Manage Securities" section and find the bond you want to redeem. Click the redemption option and confirm the transaction. The money goes directly to the bank account you have linked to your TreasuryDirect account.

The redemption is usually processed within one business day, though the actual deposit into your bank account may take another one to three business days depending on your bank. You will see the transaction reflected in your TreasuryDirect account immediately, even if the money has not yet arrived in your checking or savings account.

If you have forgotten your TreasuryDirect login, you can reset it on the website. If you no longer have access to the email address associated with your account, contact TreasuryDirect customer service at 844-284-2676 to verify your identity and regain access.

Converting a paper bond to digital before cashing

If you have a paper EE bond and want to cash it online instead of going to the bank, you can convert it to a digital bond first. This is called SmartExchange. Log into TreasuryDirect, go to "SmartExchange," and enter the bond's series, denomination, and serial number. The system will verify the bond exists and transfer it to your digital account.

The conversion itself is free and takes a few minutes. Once the bond appears in your TreasuryDirect account, you can redeem it online using the process described above. This route makes sense if you have lost the physical bond, if the bond is damaged, or if you simply prefer not to visit a bank.

You will need to have a TreasuryDirect account set up before you can use SmartExchange. If you do not have one, you can create it at treasurydirect.gov in about 15 minutes using your Social Security number and a valid email address.

Understanding the early redemption penalty

If you cash an EE bond before it has been held for five years, the U.S. Treasury deducts three months of interest from your payout. This is not a fee — it is a reduction in the interest you earned. For example, if a bond has earned $100 in interest but you cash it at year three, you receive only the principal plus roughly $75 in interest (three months' worth is withheld).

The five-year clock starts from the issue date on the bond, not from the date you bought it. If you bought a bond on June 15 but it was issued on June 1, the five-year mark is June 1 of the fifth year, not June 15. Check the issue date printed on the bond or shown in your TreasuryDirect account to know exactly when the penalty expires.

After five years, there is no penalty no matter how long you hold the bond. An EE bond continues to earn interest for 30 years from the issue date, so you can hold it penalty-free for 25 years if you choose.

Reporting the interest for taxes

The interest you earn on an EE bond is subject to federal income tax but not state or local tax. You do not pay tax when you cash the bond — you report it when you file your tax return. You have two options: report all the interest in the year you cash the bond, or report the interest year by year as it accrues (even though you have not cashed it yet).

Most people report it all in the year of redemption because it is simpler. The bank or TreasuryDirect will send you a Form 1099-INT in January showing the interest paid in the previous year. You report this on your tax return.

If you choose to report interest as it accrues each year instead, you must do so consistently and cannot switch methods without IRS permission. This approach is mainly useful if you are in a lower tax bracket in the years you hold the bond and expect to be in a higher bracket when you cash it — you spread the tax burden across multiple years. Talk to a tax professional if you think this applies to you.

What to do if you have lost the bond or cannot find it

If you have a paper bond and cannot locate it, you can file a claim with the Treasury to have it replaced or redeemed. Go to treasurydirect.gov and look for the "Lost or Stolen Securities" section, or call the TreasuryDirect customer service line at 844-284-2676. You will need to provide the bond's series, denomination, and serial number if you have that information.

If you do not have the serial number, you can still file a claim, but the process takes longer because the Treasury has to search their records. Provide as much information as you remember: the approximate purchase date, the amount, and the name of the person who bought it.

For digital bonds, if you have lost access to your TreasuryDirect account, contact customer service to verify your identity and regain access. They can then help you redeem the bond or transfer it to a new account.

Frequently Asked Questions

Can I cash an EE bond before 12 months without any money?

No. The Treasury will not redeem an EE bond before it has been held for 12 months, regardless of the reason. You must wait the full year. After 12 months, you can cash it, but you will lose three months of interest if you do so before the five-year mark.

What if the bank says they cannot cash my paper bond?

Some banks have stopped handling savings bonds because the volume is low. If your bank declines, try another bank in your area, or convert the bond to digital through SmartExchange and redeem it online. You can also mail the bond to the Federal Reserve, though this takes longer and carries the risk of loss in the mail.

Do I have to cash the entire bond, or can I cash part of it?

You must redeem the entire bond. You cannot cash half of a $10,000 bond and keep the other half earning interest. If you need only part of the value, you will have to cash the whole thing and reinvest the portion you do not need elsewhere.

How long does it take to get the money after I request redemption?

For TreasuryDirect online redemptions, the money usually arrives in your linked bank account within one to three business days. For paper bonds cashed at a bank, the process takes three to five business days after the teller submits it to the Federal Reserve. Call your bank if it has been longer than a week.

Can someone else cash my EE bond if I give them permission?

Only if they are a registered co-owner or if you have given them legal power of attorney. A simple note or verbal permission is not enough. If the bond is registered to you alone, only you can redeem it. If it is registered to two people, either person can cash it without the other's consent.