Where and how to redeem a savings bond

You can redeem a savings bond at most banks and credit unions, or directly through the U.S. Department of the Treasury. The easiest route depends on whether you have the physical bond or own it electronically.

If you hold a paper bond, take it to any bank or credit union where you have an account. Bring a government-issued ID. The institution will verify the bond's serial number and current value, then deposit the cash into your account or give it to you on the spot. Some banks charge a small fee for this service, though many do not — call ahead to ask.

If your bond is registered electronically through TreasuryDirect (the Treasury's online system), you redeem it without leaving home. Log into your TreasuryDirect account, select the bond you want to cash, and request redemption. The money appears in your linked bank account within one to two business days.

Key Takeaways

  • Paper bonds can be cashed at any bank or credit union where you have an account by showing your ID and the bond itself.
  • Electronic bonds held in TreasuryDirect are redeemed online and the money reaches your bank account in one to two business days.
  • Series EE and Series I bonds have early redemption penalties if cashed before five years of ownership, though the penalty is smaller after year five.
  • You will owe federal income tax on the interest your bond earned, but not state or local tax.
  • If you have lost a paper bond, you can file a claim with the Treasury to get a replacement or the cash value.

Penalties for cashing bonds before maturity

Series EE and Series I bonds carry a three-month interest penalty if you redeem them before five years have passed. This means you lose three months' worth of the interest you earned. After five years, there is no penalty.

For example, if you own a Series I bond that earned $50 in interest over three years, and you redeem it before year five, you forfeit three months of that interest — roughly $12.50. If you wait until year five or later, you keep all $50.

Series HH bonds (older bonds no longer sold) have different rules and cannot be redeemed before maturity. If you own one, contact the Treasury directly to understand your options.

What happens to the interest you earned

The interest on your savings bond is subject to federal income tax in the year you redeem it. You do not owe state or local tax on the interest, even if you live in a state with income tax.

The Treasury will not withhold tax automatically — you report the interest as income when you file your federal tax return. If you redeemed multiple bonds or earned a large amount of interest, you may want to set aside money for taxes or make an estimated tax payment to the IRS.

You can defer reporting the interest until you redeem the bond, or you can report it each year even if you have not cashed it yet. Most people wait until redemption, but the choice is yours.

Redeeming bonds you inherited

If you inherited a savings bond, you can redeem it the same way as any other bond — through a bank or TreasuryDirect. The original owner's name does not have to match yours on the account.

The interest earned before the original owner's death is taxable to their estate, not to you. Interest earned after their death is taxable to you in the year you redeem the bond. If the bond was in a revocable trust or had a named beneficiary, redemption is usually straightforward. If the ownership is unclear, contact the Treasury's Savings Bond Division at 1-844-284-2676 to confirm who can redeem it.

Replacing a lost or damaged paper bond

If you have lost a paper bond or it has been damaged, you can file a claim with the Treasury to receive a replacement bond or the cash value. You will need the bond's serial number, the issue date, and the series (EE, I, or HH). If you do not have the serial number, the Treasury can search their records if you provide your name, address, and Social Security number.

File the claim using Form PD F 1048, which you can download from the Treasury's website or request by mail. The process typically takes four to six weeks. During that time, the bond is frozen — no one can redeem it or transfer it. Once the Treasury approves your claim, they will either issue a replacement bond or send you a check for the current value.

Tax reporting when you redeem

When you redeem a savings bond, the financial institution does not send you a tax form. You are responsible for reporting the interest on your own tax return. The interest is added to your ordinary income and taxed at your regular income tax rate.

If you redeemed bonds in a previous year but did not report the interest, you can still file an amended return. The IRS has a statute of limitations, so it is worth correcting the record even if it has been several years.

Redeeming bonds held in a minor's name

If a bond is registered in a child's name, a parent or legal guardian must redeem it on the child's behalf. Bring the bond, your ID, and the child's birth certificate or Social Security card to the bank. The money can be deposited into a custodial account or the parent's account, depending on the bank's policy.

The interest is taxable to the child, not the parent, even if the parent receives the cash. This can be an advantage if the child has little or no other income, because the interest may fall below the standard deduction and owe no tax. Consult a tax professional if the bond earned a large amount of interest.

Frequently Asked Questions

Can I redeem a savings bond before it reaches final maturity?

Yes. Series EE and Series I bonds can be redeemed at any time after you own them for one year. Before five years, you lose three months of interest. After five years, there is no penalty. Series HH bonds cannot be redeemed early.

What if my bank refuses to redeem my bond?

Some smaller banks do not redeem savings bonds. If yours declines, try another bank in your area or redeem it through TreasuryDirect online. You can also mail the bond directly to the Treasury's Savings Bond Division with a completed Form PD F 1048.

How do I know how much my bond is worth?

Use the Treasury's Savings Bond Calculator on TreasuryDirect.gov. Enter the bond series, denomination, and issue date. For electronic bonds, TreasuryDirect shows the current value in your account. Paper bonds do not have a printed value — the bank will calculate it when you redeem.

Do I have to redeem all my bonds at once?

No. You can redeem one bond, some bonds, or all of them whenever you choose. Each bond is independent, so you can cash a few now and hold the rest for later.

What if I want to reinvest the money in new savings bonds?

You can buy new Series I or Series EE bonds through TreasuryDirect immediately after redeeming old ones. There is no waiting period. You can also buy paper bonds through most banks, though they are less common now.