A Guide to Cashing In Your U.S. Savings Bonds (Series EE)

Quick answer

• Determine if your Series EE savings bonds are mature and eligible for redemption.
• Gather necessary personal information and your bond serial numbers.
• Decide if you’ll redeem online or by mail.
• For mail-in redemptions, obtain and complete the correct TreasuryDirect forms.
• If redeeming by mail, get your signature certified by a financial institution or issuing agency.
• Follow the specific instructions for mailing your redemption request and bonds.
• For online redemption, log in to your TreasuryDirect account and follow the redemption prompts.
• Be aware of potential tax implications on the interest earned.

Who this is for

• U.S. citizens or residents who own Series EE savings bonds.
• Individuals looking to access the funds from their matured savings bonds.
• Those who need guidance on the process of redeeming their savings bonds.

What to check first (before you act)

Goal and timeline

Before you cash in your Series EE savings bonds, consider why you need the money and when you need it. Are these funds for a specific purchase, an emergency, or general savings? If your bonds have not yet reached full maturity (typically 30 years), cashing them in early might mean forfeiting some accrued interest. Understand the redemption value and compare it to potential earnings if you were to hold them longer.

Current cash flow

Assess your current financial situation. Do you have immediate cash needs that outweigh the potential benefits of holding onto the bonds? If you have a stable income and sufficient funds in other accounts, you might be able to wait for your bonds to reach full maturity to maximize their value.

Emergency fund or safety buffer

Ensure you have a robust emergency fund in place before cashing in long-term savings. Savings bonds are often part of a diversified savings strategy. If this redemption would deplete your emergency savings, it’s advisable to reconsider or explore other options for accessing funds.

Debt and interest rates

Compare the interest rate your savings bonds are earning to the interest rates on any outstanding debts you may have. If you have high-interest debt (like credit cards), it might be more financially beneficial to use the bond proceeds to pay off that debt rather than simply adding it to your checking account.

Credit impact

Cashing in savings bonds generally does not directly impact your credit score. However, if you use the funds to pay down debt, it can indirectly improve your credit utilization ratio and, over time, positively affect your creditworthiness.

Step-by-step (simple workflow)

1. Determine Bond Eligibility

• What to do: Check the issue date of your Series EE savings bonds. Bonds typically earn interest for 30 years from their issue date. You can find this information on the bond itself or by using TreasuryDirect’s “Savings Bond Value” calculator if you have the serial numbers.
• What “good” looks like: Your bonds have reached their final maturity date (30 years) or you are prepared to accept the potential loss of some interest by redeeming them earlier.
• A common mistake and how to avoid it: Assuming all bonds are redeemable at any time. Avoid this by always verifying the issue date and maturity.

2. Gather Your Information

• What to do: Collect your personal identification details, including your Social Security number (SSN). If you know the serial numbers of your bonds, have them ready. If the bonds are in a deceased person’s name, you’ll need documentation like a death certificate and proof of inheritance.
• What “good” looks like: You have all necessary personal and bond-specific information readily available.
• A common mistake and how to avoid it: Not having the correct SSN or missing bond serial numbers, which can delay the process. Keep all your savings bond records organized.

3. Choose Your Redemption Method

• What to do: Decide whether to redeem your bonds online through TreasuryDirect or by mail. Online redemption is generally faster and more convenient if your bonds are already registered in a TreasuryDirect account.
• What “good” looks like: You’ve chosen the method that best suits your situation and comfort level with technology.
• A common mistake and how to avoid it: Not considering the convenience and speed of online redemption if your bonds are in TreasuryDirect.

4. Access TreasuryDirect (for online redemption)

• What to do: If your bonds are in a TreasuryDirect account, log in to your account at TreasuryDirect.gov. If they are paper bonds and you want to redeem them online, you’ll likely need to convert them to an electronic format first, which often involves opening a TreasuryDirect account.
• What “good” looks like: You have successfully logged into your TreasuryDirect account.
• A common mistake and how to avoid it: Forgetting your TreasuryDirect login credentials. Use the account recovery options if needed.

5. Initiate Redemption Online

• What to do: Navigate to the “Redeem Savings Bonds” section within your TreasuryDirect account. Follow the on-screen prompts to select the bonds you wish to redeem and confirm the redemption amount.
• What “good” looks like: You have successfully initiated the redemption process and received confirmation.
• A common mistake and how to avoid it: Accidentally selecting the wrong bonds or an incorrect redemption amount. Double-check all selections before confirming.

6. Prepare Mail-in Redemption Forms (for paper bonds)

• What to do: If redeeming paper bonds by mail, you’ll need to download and complete the appropriate form, typically FS Form 1522, “Redemption of Savings Bonds.” This form is available on the TreasuryDirect website.
• What “good” looks like: You have the correct form and have filled out all required sections accurately.
• A common mistake and how to avoid it: Using an outdated or incorrect form. Always download the latest version directly from TreasuryDirect.gov.

7. Certify Your Signature (for mail-in redemption)

• What to do: For mail-in redemptions, your signature on the redemption form must be certified. This can usually be done by an authorized representative at a commercial bank, credit union, or savings and loan association. You may need to present identification.
• What “good” looks like: Your signature is properly certified by an authorized official on the form.
• A common mistake and how to avoid it: Having your signature certified by someone not authorized, or not presenting proper identification. This will cause your redemption request to be rejected.

8. Mail Your Bonds and Forms

• What to do: Carefully package your certified redemption form and the original paper savings bonds. Send them via certified mail with return receipt requested to the address specified on the redemption form.
• What “good” looks like: Your package is securely sent and you have tracking information.
• A common mistake and how to avoid it: Mailing the original bonds without proper certification or sending them via regular mail. This risks lost bonds and delayed or rejected redemptions.

9. Receive Your Funds

• What to do: Funds will typically be deposited directly into your bank account (for online redemptions) or sent via check (for mail-in redemptions) within a few business days to a couple of weeks, depending on the method.
• What “good” looks like: You have received the full redemption amount in your designated account or via check.
• A common mistake and how to avoid it: Not checking your bank statements or mail for the funds. Monitor your accounts regularly after initiating redemption.

10. Consider Tax Implications

• What to do: Understand that the interest earned on savings bonds is subject to federal income tax. It is generally exempt from state and local income taxes. If you use the bond proceeds for qualified education expenses, you may be able to exclude the interest from your income, but there are specific rules to follow. Consult a tax professional for personalized advice.
• What “good” looks like: You are aware of the tax obligations and have planned accordingly.
• A common mistake and how to avoid it: Failing to report the interest income on your federal tax return. This can lead to penalties and interest from the IRS.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Cashing in bonds before full maturity	Loss of accrued interest, especially if cashed within the first five years.	Wait until the bond reaches its 30-year maturity for maximum value, or carefully calculate the loss of interest before early redemption.
Not having accurate personal information	Delays or rejection of redemption requests.	Ensure your SSN and other personal details are correct and match what’s on file with TreasuryDirect.
Losing paper savings bonds	Inability to redeem the bonds; a complex and often lengthy process to replace them.	Store paper bonds in a secure location, like a safe deposit box. Consider converting them to electronic bonds in TreasuryDirect.
Incorrectly filling out redemption forms	Rejection of the redemption request, leading to delays.	Read all instructions carefully and ensure every field is completed accurately and legibly.
Forgetting to certify signature (mail-in)	The redemption request will be denied, and the bonds will be returned to you.	Ensure your signature is certified by an authorized institution as per Treasury instructions.
Sending original bonds without tracking	Risk of lost bonds in the mail, making redemption impossible and requiring a replacement process.	Always use certified mail with return receipt requested for all mail-in redemptions of paper bonds.
Not understanding tax implications	Unexpected tax liabilities and potential penalties from the IRS.	Consult IRS Publication 550 or a tax professional to understand your tax obligations regarding the interest earned.
Redeeming bonds needed for education expenses without checking eligibility	Missing out on potential tax exclusion for education expenses.	Review IRS rules for education savings bond program eligibility before redeeming, and consult a tax advisor if you plan to use the funds for qualified education costs.
Not checking bond serial numbers or issue dates	Attempting to redeem bonds that are not yet eligible or are for the wrong series.	Always verify the bond’s series, issue date, and current value using TreasuryDirect’s tools before initiating redemption.

Decision rules (simple if/then)

• If your Series EE bonds are still earning interest and you don’t need the money immediately, then hold onto them because they will continue to grow in value up to their 30-year maturity.
• If you have high-interest debt (e.g., credit cards), then consider cashing in your savings bonds to pay off that debt because the interest saved will likely outweigh the bond’s earnings.
• If your bonds are registered in a TreasuryDirect account, then redeem them online because it’s typically the fastest and most convenient method.
• If you have paper savings bonds and are redeeming them by mail, then ensure your signature is certified by an authorized financial institution because this is a mandatory step.
• If you are cashing in bonds for qualified education expenses, then check the IRS rules for the Education Savings Bond Program because you may be able to exclude the interest from your federal income tax.
• If your bonds have reached their 30-year maturity, then redeem them because they have stopped earning interest and are worth their face value plus any accrued interest.
• If you are unsure about the tax implications of cashing in your bonds, then consult a tax professional because understanding your tax liability is crucial.
• If you are redeeming bonds for a deceased individual, then gather all necessary legal documentation (death certificate, probate documents) because these are required for transfer and redemption.
• If you have a substantial emergency fund, then cashing in savings bonds for non-essential purchases is less risky because your immediate financial stability is secure.
• If you are concerned about losing paper bonds, then consider converting them to electronic bonds within a TreasuryDirect account because this offers greater security and ease of management.
• If you need the funds within a few business days, then prioritize online redemption if your bonds are in TreasuryDirect because it generally processes faster than mail-in requests.

FAQ

Q1: How long do Series EE savings bonds earn interest?

A1: Series EE savings bonds earn interest for 30 years from their issue date. After 30 years, they stop earning interest and are worth their face value plus any accrued interest.

Q2: Can I cash in my Series EE savings bonds anytime?

A2: You can redeem most Series EE savings bonds after holding them for at least one year. However, if you redeem them within five years of their issue date, you will forfeit the last three months of interest.

Q3: What is the current value of my Series EE savings bond?

A3: The value depends on the issue date and the bond’s maturity. You can find the exact value by using the “Savings Bond Value” calculator on TreasuryDirect.gov, provided you have the bond’s serial number and issue date.

Q4: How do I redeem paper savings bonds?

A4: For paper bonds, you typically need to complete FS Form 1522, get your signature certified by an authorized financial institution, and mail the form and original bonds to the Treasury. Online redemption is preferred if your bonds are in TreasuryDirect.

Q5: Is the interest earned on savings bonds taxable?

A5: Yes, the interest earned on Series EE savings bonds is subject to federal income tax. It is generally exempt from state and local income taxes.

Q6: Can I use savings bond interest to pay for college tax-free?

A6: Potentially. If you redeem savings bonds to pay for qualified higher education expenses for yourself, your spouse, or dependents, you may be able to exclude the interest from your federal income tax. Specific requirements apply, so check IRS Publication 550 or consult a tax professional.

Q7: What happens if I lose my paper savings bonds?

A7: If you lose paper savings bonds, you can request replacement bonds, but it’s a lengthy process. It’s advisable to store them securely or convert them to electronic bonds in TreasuryDirect to avoid this issue.

Q8: How long does it take to receive my money after redemption?

A8: For online redemptions, funds are typically deposited within a few business days. Mail-in redemptions can take longer, often a few weeks, depending on processing times and mail delivery.

What this page does NOT cover (and where to go next)

• Specific current interest rates for new savings bonds. (Check TreasuryDirect.gov for current rates.)
• Detailed tax advice for every individual situation. (Consult a qualified tax professional.)
• Investment strategies beyond savings bonds. (Explore resources on diversified investing and retirement planning.)
• Redemption of other U.S. savings bond series (e.g., Series I). (Refer to TreasuryDirect.gov for specific guidance on other bond types.)
• International tax implications or requirements. (Seek advice from a tax professional specializing in international tax law.)