You can cash most bonds at your bank, through the U.S. Treasury if you own them directly, or through the brokerage where you bought them

The place to cash a bond depends on what kind of bond you own and how you bought it. If you hold paper savings bonds issued by the U.S. Treasury, you go to your bank or the Treasury itself. If you own Treasury securities (bills, notes, or bonds) in a brokerage account, you sell them through that same broker. If you hold corporate or municipal bonds, you sell them through your broker or the firm that sold them to you. The process is straightforward once you know which category you fall into.

Key Takeaways

  • Paper savings bonds can be cashed at most banks, credit unions, or directly through TreasuryDirect without a fee.
  • Treasury securities held in a brokerage account are sold through that broker, and you receive the current market price, not face value.
  • Corporate and municipal bonds must be sold through a broker or the original seller, since there is no government redemption option.
  • Bring the physical bond certificate or account statements to your bank, or log into your online account if you own bonds electronically.
  • Cashing before maturity may result in a loss if interest rates have risen since you bought the bond.

Cashing paper savings bonds at your bank

Most banks and credit unions will cash paper savings bonds for you at no charge. Walk in with the bond certificate and a valid photo ID. The teller will verify the bond's serial number, check that it has reached its issue date (you cannot cash a bond before it is issued), and process the redemption. The bank then sends the bond to the Federal Reserve for final processing and deposits the cash into your account, usually within one to three business days.

Not every bank cashes savings bonds, so call ahead. Very large banks almost always do. Smaller regional or community banks may decline if they do not have the infrastructure to handle the Federal Reserve submission. If your bank will not cash it, the U.S. Treasury will do it for free through TreasuryDirect, though that process takes longer — typically two to four weeks by mail.

Redeeming savings bonds through TreasuryDirect

If you own paper savings bonds and want to avoid the bank, or if no bank near you will cash them, you can redeem them directly through TreasuryDirect, the Treasury's online platform. You will need to photograph or scan the bond and submit it along with a form. The Treasury processes the request by mail and sends you a check or deposits funds into your bank account.

This route is free but slower than a bank. The Treasury estimates two to four weeks for processing. You can also mail the physical bond to the Treasury's Bureau of the Fiscal Service with a redemption form, but that adds postal time on both ends. If you own bonds electronically in a TreasuryDirect account (meaning you bought them online rather than receiving paper), you can redeem them instantly through your account dashboard without mailing anything.

Selling Treasury securities through a brokerage

If you own Treasury bills, notes, or bonds inside a brokerage account — whether at Fidelity, Charles Schwab, Vanguard, or another firm — you sell them the same way you would sell a stock. Log into your account, find the security, and place a sell order. The sale executes during market hours (Treasury markets trade Monday through Friday, 8 a.m. to 5 p.m. Eastern Time). The cash lands in your account within one to two business days.

The price you receive is the current market price, not the face value printed on the certificate. If interest rates have risen since you bought the bond, the market price will be lower than what you paid. If rates have fallen, the price will be higher. Your broker may charge a small transaction fee, though many brokers waive fees for Treasury sales. Check your account's fee schedule or ask before you sell.

Selling corporate and municipal bonds through a broker

Corporate bonds and municipal bonds have no government redemption option. You must sell them through a broker or the financial institution that originally sold them to you. If you bought the bond through a brokerage account, log in and place a sell order just as you would for a Treasury. If you bought it directly from a bank or financial advisor, contact that firm and ask them to sell it on the secondary market.

Corporate and municipal bonds trade on secondary markets, but less actively than Treasuries. The bid-ask spread — the difference between what a buyer will pay and what a seller is asking — can be wider, meaning you may not get as tight a price. Your broker will show you the current bid price before you confirm the sale. Some brokers charge a transaction fee for bond sales; others do not. Ask what you will pay before you commit.

What happens if you cash before maturity

Cashing a bond before its maturity date means you sell it at its current market price rather than waiting to receive face value at maturity. If interest rates have risen since you bought the bond, its market price will be lower, and you will take a loss. If rates have fallen, the price will be higher, and you will gain. This is true for all bonds — savings bonds, Treasuries, corporate bonds, and municipal bonds.

Savings bonds have a small exception: the Treasury guarantees that if you hold a savings bond for at least five years, you will not lose money, even if you cash it early. However, you will forfeit the last three months of interest. After five years, the bond's value is protected, but the interest penalty still applies if you redeem before maturity.

Documents and information you will need

For paper savings bonds at a bank, bring the physical certificate and a valid photo ID. The bank will note the bond's series, denomination, and serial number. For electronic bonds in TreasuryDirect, you need only your login credentials. For bonds in a brokerage account, you need your account login and the security identifier (usually the CUSIP number, which your broker displays in your holdings list).

If you have lost a paper bond certificate, you can file a claim with the Treasury's Bureau of the Fiscal Service. The process requires proof of ownership and can take several months. If you have inherited bonds, bring the bond certificate and a certified copy of the death certificate to your bank, or contact the Treasury directly for instructions on transferring inherited bonds to your name.

Frequently Asked Questions

Can I cash a savings bond before it matures?

Yes, but with a penalty. Savings bonds can be cashed anytime after the issue date, but if you redeem before five years have passed, you forfeit the last three months of interest. After five years, the Treasury guarantees you will not lose principal, though the three-month interest penalty still applies.

What if I lost my paper bond certificate?

Contact the Treasury's Bureau of the Fiscal Service to file a claim. You will need to provide proof of ownership, such as purchase receipts or bank statements. The process can take several months. In the meantime, the bond continues to earn interest.

Do I pay taxes when I cash a bond?

Yes. The interest you earned on the bond is taxable income in the year you redeem it. For savings bonds, you report the interest on your federal tax return. For Treasury securities and corporate bonds, your broker will send you a 1099-INT form showing the interest earned. Municipal bonds are usually exempt from federal tax but may be subject to state tax.

Why is the price different when I sell a bond before maturity?

Bond prices move opposite to interest rates. If rates rise after you buy a bond, its price falls because new bonds now offer higher interest. If rates fall, its price rises. When you sell before maturity, you receive the current market price, not the face value you would get at maturity.

Can I cash bonds at any bank?

Most large banks will cash savings bonds for free, but some smaller banks decline. Call your bank first to confirm they offer this service. If yours does not, the Treasury will redeem them for free, though it takes longer.