Where and how to redeem your Series EE bond

You redeem a Series EE bond through TreasuryDirect, the U.S. Department of the Treasury's online platform where these bonds are issued and held. If you own the bond in electronic form (which is standard for bonds issued after 2005), you log into your TreasuryDirect account, select the bond you want to redeem, and request the redemption. The Treasury deposits the money into your linked bank account within one to three business days.

If you own a paper Series EE bond issued before 2005, you cannot redeem it online. Instead, you take the physical bond to a bank or credit union that offers savings bond redemption services and present it in person. Not every bank does this, so call ahead. Bring a photo ID. The institution will verify the bond's serial number and current value, then give you cash or deposit the proceeds into your account on the spot.

You can also mail a paper bond to the Treasury's Bureau of the Fiscal Service, though this takes longer and carries the risk of loss in transit. Most people find the bank route faster and safer.

Key Takeaways

  • Electronic Series EE bonds (issued after 2005) are redeemed through your TreasuryDirect account online, with funds deposited to your bank account in one to three business days.
  • Paper Series EE bonds (issued before 2005) must be redeemed in person at a bank or credit union, or mailed to the Bureau of the Fiscal Service.
  • You can redeem a Series EE bond anytime after one year of ownership, though redeeming before five years means you lose the last three months of interest.
  • The redemption value includes all interest earned to date, and you will receive a 1099-INT form for tax reporting if the interest exceeds $10.

Timing rules: when you can redeem without penalty

You can redeem a Series EE bond anytime after you have owned it for at least one year. However, the Treasury imposes an interest penalty if you redeem before five years have passed: you forfeit the last three months of interest earned. This means if you redeem at year three, you receive interest only through year 2 and nine months.

After five years, you can redeem without any penalty and receive all interest earned to date. Many people wait until the five-year mark for this reason, even if they need the money sooner. If you do redeem early, the penalty is automatic—you do not have to request it or sign anything extra; the Treasury simply calculates your value as of the date three months before your redemption request.

Series EE bonds stop earning interest after 30 years. If you still own a bond at that point, redeeming it makes sense because holding it longer will not increase its value.

What value you receive when you redeem

The redemption value of a Series EE bond is always at least the purchase price. If you bought a $100 bond, you will receive at minimum $100 when you redeem it, even if interest rates have fallen and the bond has earned very little. This principal may provide is one of the main reasons people buy Series EE bonds.

In most cases, your redemption value will be higher than the purchase price because the bond has earned interest. The Treasury calculates interest monthly and compounds it semiannually. You can check the current value of your bond anytime by logging into TreasuryDirect and viewing your holdings—the system shows you exactly what you would receive if you redeemed today.

The redemption value includes all accrued interest minus any penalty for early redemption (if applicable). You do not pay any fees to redeem through TreasuryDirect or at a bank.

Tax reporting after you redeem

The interest you earn on a Series EE bond is subject to federal income tax. You do not pay tax when you redeem the bond; instead, you report the interest on your tax return for the year in which you redeem it. If the interest earned is $10 or more, the Treasury will send you a Form 1099-INT by January 31 of the following year, showing the interest amount.

You have two options for reporting: report all the interest in the year you redeem (the most common approach), or report the interest each year as it accrues. Most people choose the first option because it is simpler and because they often redeem bonds when their income is lower. If you choose to report annually, you must do so consistently for all your bonds and keep records of how much interest you reported each year.

Series EE bond interest is not subject to state or local income tax, only federal tax. If you are over 59½ and redeem the bond to pay for may have access to education expenses, you may be able to exclude some or all of the interest from federal tax under the Education Savings Bond Program, though this has income limits and other conditions.

Redeeming bonds held in a minor's name

If a Series EE bond is registered in a minor's name, the parent or guardian must initiate the redemption through TreasuryDirect or at the bank. The minor cannot redeem the bond independently, even after turning 18, unless the registration is changed to their name alone.

When a minor's bond is redeemed, the interest is taxable to the minor in the year of redemption. Parents sometimes use this to their advantage by redeeming bonds in years when the child has little or no other income, keeping the tax burden low. The Form 1099-INT will show the minor's Social Security number.

What to do if you cannot locate your bond or account

If you own a Series EE bond but cannot find your TreasuryDirect login information, you can reset your password on the TreasuryDirect website. If you have forgotten your account number or email, use the "Forgot User ID" tool on the login page.

If you own a paper bond and have lost it, contact the Bureau of the Fiscal Service at 844-284-2676 or visit their website. You will need to provide the bond's serial number (if you have it), the issue date, and the denomination. The Treasury can issue a replacement bond, though the process takes several weeks and requires documentation of the loss.

If you inherited a Series EE bond from someone else, the redemption process depends on whether the bond is still in the deceased person's name or has been retitled in your name. Contact TreasuryDirect or the bank where you plan to redeem it for guidance on the specific steps.

Redeeming bonds before maturity versus letting them grow

Deciding whether to redeem a Series EE bond early or hold it longer depends on your financial situation and what you plan to do with the money. If you need cash and the bond has been held for at least five years, redeeming makes sense because you avoid the three-month interest penalty. If the bond has been held for less than five years, weigh whether the penalty is worth paying against your need for the funds.

Series EE bonds earn interest for 30 years, so if you do not need the money, holding the bond longer will increase its value. However, after 30 years, the bond stops earning interest, so there is no benefit to holding it beyond that point. Some people redeem bonds gradually over time rather than all at once, which can help spread the tax burden across multiple years.

If you are considering redeeming to reinvest the money elsewhere, compare the current Series EE bond rate (which changes every six months) to other savings options like high-yield savings accounts or certificates of deposit. The Treasury publishes the current rate on the TreasuryDirect website, updated on the first business day of each month.

Frequently Asked Questions

Can I redeem a Series EE bond online if I own a paper bond?

No. Paper Series EE bonds issued before 2005 must be redeemed in person at a bank or credit union, or mailed to the Bureau of the Fiscal Service. Only electronic bonds held in TreasuryDirect can be redeemed online. If you want to redeem a paper bond online in the future, you would need to convert it to electronic form first, which requires contacting the Treasury.

What happens if I redeem my bond before one year?

You cannot redeem a Series EE bond before one year of ownership. The Treasury will not process the request. You must wait at least one year from the issue date before redemption is allowed.

Do I have to pay taxes when I redeem, or later when I file my return?

You do not pay taxes at the time of redemption. You report the interest earned on your federal income tax return for the year you redeem the bond. If the interest is $10 or more, you will receive a Form 1099-INT in January showing the amount.

Can someone else redeem my Series EE bond for me?

For electronic bonds in TreasuryDirect, only you can log into your account and request redemption. For paper bonds, a family member or authorized person can redeem it at a bank on your behalf if they have your permission and a photo ID, though policies vary by institution. If you are unable to manage your own affairs, you may need to set up a power of attorney.

What if the bank says they do not redeem savings bonds?

Not all banks offer savings bond redemption services. Call ahead to confirm. If your bank does not redeem bonds, try a credit union or another bank in your area. You can also mail the bond to the Bureau of the Fiscal Service, though this takes longer. Some larger banks are more likely to offer this service than smaller ones.