Where to redeem your savings bonds

You can redeem savings bonds at most banks and credit unions, or directly through the U.S. Department of the Treasury if you own them electronically. Walk into any branch of your bank or credit union with the physical bond and a valid ID, and a teller can process the redemption on the spot — usually within minutes. If your bonds are registered in TreasuryDirect (the Treasury's online system), you log in, select the bonds you want to cash, and the money transfers to your linked bank account within one to three business days.

Not all banks redeem bonds, so call ahead before you go. Larger national banks almost always do; smaller regional banks sometimes don't. If your bank won't redeem them, the Federal Reserve Bank in your region will, though the process takes longer — you mail the bonds in and wait for a check. You can find your regional Federal Reserve Bank on the Treasury website.

Key Takeaways

  • Physical savings bonds can be cashed at most banks and credit unions with a valid ID, usually the same day.
  • Series I and Series EE bonds have a penalty if you redeem them before five years have passed — you lose the last three months of interest.
  • Bonds held in TreasuryDirect are redeemed online and the money reaches your bank account in one to three business days.
  • You will owe federal income tax on the interest your bond earned, but not state or local tax.
  • If you can't find a physical bond or don't remember where you put it, the Treasury can search its records and move it to TreasuryDirect.

The five-year rule and early redemption penalties

Series I bonds and Series EE bonds both carry a penalty if you cash them in before five years have passed. The penalty is the loss of the last three months of interest — so if your bond has earned $100 in interest, you get $75. This applies even if you are only one month short of the five-year mark. After five years, you can redeem without penalty.

Series HH bonds (which are no longer sold but many people still own) have a different rule: you can redeem them anytime after six months without penalty. If you own a mix of bond types, check which ones you have before you redeem, because the penalty applies only to Series I and EE.

What happens to the interest you earned

The interest your bond earned is subject to federal income tax, but not to state or local tax — that is one of the tax advantages of savings bonds. You do not pay tax when the bond matures or when you redeem it; instead, you report the interest as income on your federal tax return for the year you redeem it.

If you have owned the bond for many years, the interest can be substantial. For example, a Series EE bond purchased 30 years ago may have doubled in value, meaning half of what you receive is interest. Keep the redemption receipt or your TreasuryDirect record, because you will need it to report the amount on your tax return. If you are unsure how much interest you earned, TreasuryDirect shows the current value of each bond, and you subtract what you paid for it.

Redeeming bonds held in someone else's name

If the bond is registered in someone else's name — a parent, grandparent, or spouse — you cannot redeem it without their signature or legal authority. The person whose name is on the bond must either sign the redemption form in front of a bank teller or authorized official, or they must have granted you power of attorney in writing.

If the bond owner has died, the process depends on the bond type and the estate. Bonds registered in a deceased person's name alone require a death certificate and proof that you are the executor or beneficiary. Bonds registered as "payable on death" to you transfer directly to you without going through probate, and you can redeem them with a death certificate and your ID. Contact the bank or the Treasury for the specific forms you need.

Redeeming bonds you cannot locate

If you bought savings bonds years ago and cannot find them, the Treasury maintains a database of all bonds ever issued. You can search for lost or forgotten bonds through the Treasury Hunt tool on the TreasuryDirect website. You will need information like the approximate purchase date, the series (I, EE, or HH), and the amount you paid.

If the Treasury finds your bonds, they can move them into your TreasuryDirect account so you can manage and redeem them online. This process takes a few weeks. If you cannot remember the details, you can still contact the Treasury directly — they have records going back decades and can often locate bonds with just your name and Social Security number.

Redeeming bonds before maturity

Savings bonds do not have a set maturity date the way some other bonds do. Series EE bonds stop earning interest after 30 years, and Series I bonds stop after 30 years as well. You can hold them longer, but they will not grow. Once a bond stops earning interest, there is no reason to keep it — redeem it and move the money to a savings account or investment that still pays interest.

If you need the money before five years have passed, you can redeem early, but you will lose the last three months of interest. Weigh whether you need the cash now against the penalty. If the bond is earning 4 or 5 percent interest and you only lose three months, the penalty is relatively small. If the bond is old and earning very little, the penalty is negligible.

What to bring to the bank

Bring the physical bond itself and a valid government-issued ID — a driver's license, passport, or state ID card. Some banks may ask for a second form of ID or proof of address, though this is less common. If you are redeeming on behalf of someone else, bring their ID and a signed power of attorney document, or a death certificate if they have passed away.

If you have lost the physical bond but remember which bank issued it, that bank may be able to look up the bond in their system and process a replacement or redemption without the original. Call the bank first to ask what they need. If the bond was issued by a bank that no longer exists, the Federal Reserve can help locate it.

Frequently Asked Questions

Do I have to redeem all my bonds at once?

No. You can redeem one bond, some of your bonds, or all of them. If you are using TreasuryDirect, you select which bonds to cash and leave the others in your account. At a bank, you can hand over one bond or a stack of them — the teller will process whichever ones you want.

What if my bond is worth less than I paid for it?

Series I bonds cannot be worth less than you paid — they are may provide to keep their purchase price. Series EE bonds are may provide to double in value after 20 years, so if it has been less than 20 years and interest rates have been very low, it might be worth slightly less than double, but the Treasury guarantees it will reach that amount. You can redeem it for whatever it is currently worth.

Can I redeem a bond that is still earning interest?

Yes, you can redeem a bond anytime after you have owned it for one month. If you redeem before five years, you lose the last three months of interest. After five years, you can redeem without penalty and keep all the interest earned.

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

At a bank, you usually get cash or a check the same day. If you redeem through TreasuryDirect online, the money transfers to your linked bank account in one to three business days. If you mail bonds to the Federal Reserve, allow two to four weeks.

Do I pay taxes when I redeem the bond?

You do not pay taxes at the time of redemption. You report the interest your bond earned as income on your federal tax return for the year you redeem it. State and local taxes do not apply to savings bond interest.