How To Cash In Your U.S. Savings Bonds: A Simple Process

Quick answer

• Gather your savings bond information and any supporting documents.
• Determine if your bonds are eligible for cashing based on their issue date.
• Decide the best way to cash them in: electronically or by mail.
• For electronic redemption, visit TreasuryDirect.gov if the bond is registered there.
• For paper bonds, complete the redemption form and have it certified.
• Consider the tax implications of the interest earned before cashing.
• If unsure, consult a financial advisor or the Treasury Department for guidance.

Who this is for

• Individuals who own U.S. Savings Bonds and need to access their funds.
• Those who have inherited savings bonds and need to understand the cashing process.
• People looking to understand the steps and requirements for redeeming their bond investments.

What to check first (before you cash in your savings bonds)

Goal and timeline

Before you decide to cash in your savings bonds, clarify why you need the money and when you need it. Are you saving for a down payment on a house in two years, or do you have an unexpected expense that requires immediate funds? Your goal and timeline will influence whether cashing in now is the right decision, especially considering potential penalties or lost interest.

Current cash flow

Understand your current financial situation. Do you have enough readily available cash in checking or savings accounts to cover your immediate needs? Cashing in savings bonds might disrupt a long-term investment strategy. If your regular cash flow is stable and sufficient, you might be able to leave the bonds to continue earning interest.

Emergency fund or safety buffer

Ensure you have a separate emergency fund in place before tapping into your savings bonds. This fund should cover three to six months of essential living expenses. If your emergency fund is depleted, cashing in bonds might be necessary, but prioritize rebuilding it afterward.

Debt and interest rates

Evaluate any outstanding debts you have. If you have high-interest debt, such as credit card balances, it might be more financially beneficial to use the proceeds from your savings bonds to pay off that debt rather than let the interest accumulate. Compare the interest rate on your debt to the rate your savings bonds are earning.

Credit impact

Cashing in savings bonds generally does not directly impact your credit score. However, if you are cashing them in to cover essential living expenses because you lack sufficient cash flow, this could indirectly affect your credit if you subsequently miss payments on other financial obligations.

Step-by-step (simple workflow to cash in a US savings bond)

Step 1: Identify your savings bonds

What to do: Locate all your U.S. Savings Bonds. Note the series (e.g., Series EE, Series I), the face value, and the issue date. This information is crucial for determining eligibility and redemption procedures.
What “good” looks like: You have a clear list or organized file of all your savings bonds with their essential details readily available.
Common mistake and how to avoid it: Misplacing bonds or losing track of issue dates. Keep all bond records in a secure, accessible place, such as a fireproof safe or a digital document management system.

Step 2: Check eligibility for redemption

What to do: U.S. Savings Bonds have a maturity period, after which they stop earning interest. Most savings bonds earn interest for 30 years from their issue date. Check the issue date to see if your bonds are still earning interest or have reached final maturity.
What “good” looks like: You understand that bonds typically earn interest for 30 years and have confirmed if yours have reached or passed that point.
Common mistake and how to avoid it: Assuming a bond is still earning interest when it has reached its 30-year maturity. Visit the Treasury Department’s website or use their savings bond calculator to confirm the final maturity date.

Step 3: Determine your redemption method

What to do: Decide whether to redeem electronically or by mail. If your bonds are registered on TreasuryDirect.gov, electronic redemption is usually the simplest. Paper bonds may require mail-in procedures.
What “good” looks like: You’ve chosen the most convenient and secure method based on how your bonds are held.
Common mistake and how to avoid it: Attempting to cash a bond electronically when it’s only available in paper form, or vice-versa. Understand your bond’s registration.

Step 4: For TreasuryDirect.gov accounts: Initiate online redemption

What to do: Log in to your TreasuryDirect.gov account. Navigate to the “Redeem Savings Bonds” section and follow the prompts to select the bonds you wish to cash and the destination account for the funds.
What “good” looks like: The redemption process is completed smoothly online, and you receive confirmation of your request.
Common mistake and how to avoid it: Not having a linked bank account set up for direct deposit. Ensure your bank account information is current and accurate in your TreasuryDirect profile.

Step 5: For paper bonds: Obtain the redemption form

What to do: You will need to complete a specific form, typically FS Form 1522 for individuals. This form can usually be downloaded from the Treasury Department’s website.
What “good” looks like: You have the correct redemption form for your specific situation.
Common mistake and how to avoid it: Using an outdated or incorrect form. Always download the latest version from the official TreasuryDirect website.

Step 6: Complete the redemption form accurately

What to do: Fill out the FS Form 1522 (or equivalent) completely and accurately. This includes your personal information, bond details, and banking information for direct deposit.
What “good” looks like: The form is filled out without errors, ensuring no delays in processing.
Common mistake and how to avoid it: Making errors in names, Social Security numbers, or account details. Double-check all entries before proceeding.

Step 7: Get your signature certified

What to do: For paper bonds, you generally need to have your signature on the redemption form certified by an authorized individual. This could be a bank or credit union official, a certifying officer at a Federal Reserve Bank, or certain other authorized parties.
What “good” looks like: Your signature is properly certified on the form, meeting the requirements for redemption.
Common mistake and how to avoid it: Not getting the signature certified, or getting it certified by someone not authorized. Check the instructions on the redemption form for a list of authorized certifiers.

Step 8: Submit the redemption request

What to do: Mail the certified redemption form and any other required documentation (e.g., proof of identity if requested) to the address specified on the form.
What “good” looks like: Your package is sent via a trackable method, and you have proof of mailing.
Common mistake and how to avoid it: Mailing the form without tracking. Use certified mail with return receipt requested to ensure you have proof of delivery.

Step 9: Await processing and funds

What to do: Processing times can vary. Once processed, the funds will be deposited into your designated bank account or a check will be issued.
What “good” looks like: You receive your funds within a reasonable timeframe, and the amount matches your expected redemption value.
Common mistake and how to avoid it: Expecting instant payment. Be patient, as processing can take several weeks.

Step 10: Consider tax implications

What to do: Understand that the interest earned on U.S. Savings Bonds is subject to federal income tax. It is exempt from state and local income taxes. You can choose to defer paying federal income tax until the bond matures or is redeemed.
What “good” looks like: You are aware of the tax obligations and have accounted for them in your financial planning.
Common mistake and how to avoid it: Forgetting about the tax liability. Consult IRS Publication 550, “Investment Income and Expenses,” or a tax professional for specific guidance.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Cashing bonds before they reach their final maturity when not needed	Loss of potential future interest earnings	Hold bonds until maturity if you don’t need the funds immediately, especially if the bond is still earning a good rate.
Not checking the issue date	Attempting to cash bonds that are too new to be redeemed (minimum holding period)	Always verify the issue date and minimum holding period (typically 1 year for most series) before attempting to redeem.
Incorrectly filling out redemption forms	Processing delays or rejection of the redemption request	Double-check all personal information, bond serial numbers, and banking details for accuracy.
Failing to get a signature certified (for paper bonds)	Inability to redeem the bond	Ensure your signature is certified by an authorized official as listed on the redemption form instructions.
Mailing sensitive documents without tracking	Risk of loss or theft of the redemption form and personal information	Use certified mail with return receipt requested for all mailed documents.
Not understanding tax implications	Unexpected tax bills or incorrect tax filings	Familiarize yourself with the tax treatment of savings bond interest (federal tax due upon redemption, state/local exempt).
Redeeming bonds for very small amounts	Processing time and effort may outweigh the benefit	Consider consolidating small redemptions or waiting if the amount is minimal.
Not checking for lost bonds	Forgetting about valuable assets	Maintain a record of all savings bonds owned, including serial numbers and issue dates.
Assuming all bonds are redeemed the same way	Using the wrong procedure for your specific bond series or registration	Verify the redemption process for your specific bond series (e.g., EE, I) and whether it’s held electronically or in paper.

Decision rules (simple if/then)

• If your savings bonds are registered on TreasuryDirect.gov, then use the online redemption process because it’s the fastest and most secure method.
• If your savings bonds are paper, then you will need to complete a redemption form and have your signature certified because this is a standard security measure for paper instruments.
• If your bonds have not reached their 30-year final maturity and are earning a good interest rate, then consider holding them longer because you will continue to earn interest.
• If you have high-interest debt (like credit cards), then consider cashing in your savings bonds to pay off that debt because the interest saved on the debt likely outweighs the bond’s earnings.
• If you need funds for an emergency and have no other readily available cash, then cashing in savings bonds may be necessary, but prioritize rebuilding your emergency fund afterward.
• If you are redeeming bonds for educational expenses, then consult IRS Publication 570 or a tax professional because there may be specific tax benefits or rules for education.
• If your bonds are very old and have reached final maturity, then redeem them promptly because they are no longer earning interest.
• If you inherited savings bonds, then follow the specific procedures for inherited bonds, which may involve additional documentation like a death certificate, because the ownership has transferred.
• If you are unsure about the value of your bonds or the redemption process, then contact the Bureau of the Fiscal Service or a financial advisor because they can provide accurate guidance.
• If the amount you are redeeming is very small, then consider if the administrative effort is worth the payout, or if it makes sense to wait and consolidate.

FAQ

How long do I have to wait to cash in a savings bond?

Most savings bonds have a minimum holding period of one year before they can be redeemed. After that, you can cash them in at any time, but they stop earning interest after 30 years from their issue date.

Are savings bonds taxed when I cash them in?

The interest earned on U.S. Savings Bonds is subject to federal income tax. It is exempt from state and local income taxes. You can defer paying federal income tax until the bond matures or you redeem it.

What if I lost my savings bonds?

If you have lost paper savings bonds, you can request replacements through TreasuryDirect.gov or by contacting the Bureau of the Fiscal Service. You will need to provide as much identifying information as possible about the lost bonds.

Can I cash in savings bonds for someone else?

Generally, you can only cash in savings bonds for yourself or if you are the legal guardian or conservator for the owner. For inherited bonds, specific procedures apply based on the owner’s death.

How long does it take to receive my money after cashing in?

Processing times can vary. For electronic redemptions through TreasuryDirect.gov, funds are typically deposited within a few business days. For paper bonds redeemed by mail, it can take several weeks for processing and payment.

What is the difference between Series EE and Series I savings bonds?

Series EE bonds earn a fixed rate of interest over their lifetime. Series I bonds earn interest based on a combination of a fixed rate and an inflation rate, making them a good hedge against rising prices. The redemption process is similar for both.

Do I need a TreasuryDirect account to cash in savings bonds?

If your bonds are registered on TreasuryDirect.gov, you will use that account for electronic redemption. If you have paper bonds not registered on TreasuryDirect, you can still redeem them, often by mail, without having an account, but setting up an account can simplify future transactions.

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

• Specific tax advice for complex situations (e.g., using bond proceeds for education, claiming tax benefits).
• Investment advice on whether cashing in savings bonds is the best financial move for your overall portfolio.
• Detailed procedures for specific scenarios like bonds owned by a deceased individual or bonds held in trust.
• Information on foreign tax implications or non-U.S. savings bonds.

Where to go next:

• Consult a qualified tax professional for personalized tax advice.
• Speak with a financial advisor to discuss how savings bonds fit into your broader financial plan.
• Visit the official TreasuryDirect.gov website for comprehensive guides and FAQs on savings bonds.
• Review IRS publications related to savings bond taxation.