How To Redeem Your U.S. Savings Bonds (Series EE)

Quick answer

• Series EE savings bonds can be redeemed online through TreasuryDirect.gov or by mail using Form PD 1045.
• Bonds typically earn interest for 30 years from their issue date.
• You must wait at least one year after purchasing a bond to redeem it.
• Redemption can be done by the owner or, if deceased, by the beneficiary or estate.
• Interest earned on savings bonds may be tax-deferred until redemption, but check IRS rules.
• Keep your bond’s serial number and issue date handy for redemption.

Who this is for

• Individuals who own Series EE U.S. Savings Bonds and wish to access their principal and earned interest.
• Beneficiaries or estate representatives of a deceased bond owner who need to redeem the bonds.
• Those who have held savings bonds for at least one year and are ready to use the funds.

What to check first (before you act)

Goal and timeline

Before you redeem, clarify why you need the money and when. Is it for a specific purchase, an emergency, or general cash flow? Knowing your timeline helps determine if redeeming now is the best financial move, especially if the bond is still earning significant interest.

Current cash flow

Assess your current income and expenses. Do you have enough regular income to cover your needs, or will redeeming these bonds be necessary to bridge a gap? Redeeming might be less critical if your cash flow is stable.

Emergency fund or safety buffer

Ensure you have an adequate emergency fund before tapping into long-term savings like Series EE bonds. A robust emergency fund (typically 3-6 months of living expenses) can prevent you from needing to redeem savings bonds for unexpected costs.

Debt and interest rates

Review any outstanding debts. If you have high-interest debt (like credit cards), it might be more financially beneficial to use the redemption proceeds to pay off that debt rather than let it accrue more interest. Compare the interest rate you’re paying on debt to the rate your EE bond is earning.

Credit impact

Redeeming savings bonds generally does not directly impact your credit score. However, if you use the redeemed funds to pay off debt, it could indirectly improve your credit over time by reducing your credit utilization ratio.

Step-by-step (simple workflow)

1. Determine eligibility for redemption

• What to do: Check if at least one year has passed since the bond’s issue date. Bonds are generally redeemable after one year but incur a penalty (three months’ interest) if redeemed before five years.
• What “good” looks like: You’ve confirmed the bond is at least one year old and understand the potential penalty if redeemed before five years.
• A common mistake and how to avoid it: Redeeming too early without realizing the penalty. Avoid this by checking the issue date printed on the bond or by looking it up on TreasuryDirect.gov.

2. Gather necessary bond information

• What to do: Locate your Series EE savings bonds and note down their serial numbers, issue dates, and face values.
• What “good” looks like: You have a clear list of all bonds you intend to redeem, with all required details readily available.
• A common mistake and how to avoid it: Losing track of bond details or having incomplete information. Keep your bonds in a secure place and record their serial numbers and issue dates in a separate, safe location.

3. Choose your redemption method

• What to do: Decide whether to redeem online via TreasuryDirect.gov or by mail using Form PD 1045.
• What “good” looks like: You’ve selected the method that best suits your comfort level with technology and your available time.
• A common mistake and how to avoid it: Attempting to redeem at a bank. Most commercial banks no longer redeem paper savings bonds; you must go through TreasuryDirect or mail.

4. For online redemption (TreasuryDirect.gov)

• What to do: If you have a TreasuryDirect account, log in and navigate to the redemption section. Follow the prompts to enter your bond information and link your bank account for direct deposit.
• What “good” looks like: You’ve successfully submitted your redemption request through the secure online portal.
• A common mistake and how to avoid it: Not having a TreasuryDirect account set up beforehand. If you don’t have one, you’ll need to create one, which can take a few days.

5. For mail-in redemption (Form PD 1045)

• What to do: Download and complete Form PD 1045, “Application for Redemption of U.S. Savings Bonds.” You may need to have your signature medallion-stamped by a certifying official (e.g., a bank officer or notary public).
• What “good” looks like: The form is filled out accurately, completely, and has the required signature guarantee if applicable.
• A common mistake and how to avoid it: Incorrectly filling out the form or failing to get the required signature guarantee. Double-check all fields and consult the form’s instructions for signature requirements.

6. Submit your redemption request

• What to do: For online, submit the request. For mail, send the completed form and any required documentation to the address specified on the form.
• What “good” looks like: Your request is officially submitted, and you have confirmation (online) or a record of mailing (mail).
• A common mistake and how to avoid it: Mailing to the wrong address or not using certified mail. Always verify the correct mailing address and consider using certified mail with return receipt for tracking.

7. Await funds

• What to do: Allow time for the redemption process. Online redemptions are typically faster than mail-in requests.
• What “good” looks like: The funds have been deposited into your linked bank account or a check has been received.
• A common mistake and how to avoid it: Assuming immediate transfer. Understand that processing times can vary, especially for mail-in requests.

8. Consider tax implications

• What to do: Determine how the interest earned will be taxed. Interest is generally subject to federal income tax but is exempt from state and local income taxes.
• What “good” looks like: You understand the tax treatment of the redeemed bond’s interest and have accounted for it in your tax planning.
• A common mistake and how to avoid it: Forgetting about taxes, especially if you’re using the funds for a specific purchase and haven’t factored in the tax liability. Consult a tax professional if you’re unsure.

Common mistakes (and what happens if you ignore them)

Mistake	What it causes	Fix
Redeeming before one year	Forfeiture of all accrued interest.	Wait at least one full year from the issue date before redeeming.
Redeeming between year 1 and year 5	Penalty of three months’ interest, reducing your overall return.	Be aware of the five-year mark for penalty-free redemption; consider holding longer if the penalty significantly impacts your goal.
Losing original bond certificates	Difficulty in proving ownership and redeeming the bonds.	Store bonds securely and keep a separate record of serial numbers and issue dates. Use TreasuryDirect for electronic bonds.
Incorrectly filling out redemption form	Delays or rejection of your redemption request.	Carefully review all instructions on Form PD 1045 and fill out every field accurately.
Failing to get a signature guarantee	Inability to process a mail-in redemption request if required.	Understand when a medallion signature guarantee is needed (check the form instructions) and obtain one from an authorized institution.
Not having a TreasuryDirect account	Inability to redeem electronically, forcing mail-in process which is slower.	Set up a TreasuryDirect account in advance if you plan to redeem online.
Redeeming when still earning good interest	Missing out on potential future gains, especially if the bond is nearing maturity.	Compare the bond’s current interest rate to other investment opportunities and your financial needs.
Not considering tax implications	Unexpected tax liability when filing your return.	Understand that interest is federally taxable and plan accordingly. Consult a tax professional if needed.
Redeeming for a minor expense	Depleting a long-term savings vehicle for short-term needs.	Prioritize using your emergency fund or other liquid assets for minor expenses before touching savings bonds.
Assuming banks can redeem	Wasted trips and delays in the redemption process.	Know that most banks do not redeem savings bonds; use TreasuryDirect or mail-in methods.

Decision rules (simple if/then)

• If your bond is less than one year old, then do not redeem it because you will forfeit all accrued interest.
• If your bond is between one and five years old, then consider the three-month interest penalty before redeeming because it reduces your earnings.
• If you have high-interest debt, then consider redeeming your savings bonds to pay it off because the interest saved on debt likely outweighs the bond’s earnings.
• If you need funds for an emergency and your emergency fund is depleted, then redeem your savings bonds because they are a more accessible source of cash than many other investments.
• If you are comfortable with online platforms and have a TreasuryDirect account, then redeem online because it is typically the fastest method.
• If you prefer a paper process or don’t have a TreasuryDirect account, then redeem by mail using Form PD 1045 because it is a reliable alternative.
• If your bond is nearing its 30-year maturity date, then consider holding it longer if it’s still earning interest, as it may continue to grow.
• If you are unsure about the tax implications of redeeming, then consult a tax professional because federal income tax applies to the interest earned.
• If you are redeeming on behalf of a deceased individual, then gather the death certificate and other required estate documentation because specific procedures apply.
• If your bond is electronic and held in TreasuryDirect, then you can manage and redeem it directly through your account portal because it’s the most straightforward method.
• If you need the funds for a long-term goal like retirement and the bond is still earning well, then evaluate if other investment vehicles might offer better growth potential before redeeming.

FAQ

How long does it take to get my money after redeeming?

Online redemptions are usually processed within a few business days, with funds deposited directly into your bank account. Mail-in redemptions can take several weeks or even months due to processing and mailing times.

Can I redeem Series EE bonds online?

Yes, if you have an account with TreasuryDirect.gov, you can redeem your electronic or paper savings bonds online. You will need to provide your bond details and link a bank account for direct deposit.

What if I lost my savings bond certificates?

If you lost paper savings bonds, you can request replacements or redeem them through TreasuryDirect.gov by providing as much information as possible about the lost bonds, such as serial numbers and issue dates.

Are savings bonds taxed?

The interest earned on U.S. Savings Bonds is subject to federal income tax in the year of redemption. However, it is exempt from state and local income taxes.

Can a beneficiary redeem savings bonds?

Yes, if the owner of the savings bond has passed away, the named beneficiary can redeem the bond. You will need to provide proof of the owner’s death and your identity.

What is the maximum amount of interest I can earn?

Series EE savings bonds earn interest for 30 years from their issue date. After 30 years, they stop earning interest and should be redeemed.

Do I need to report the redemption on my taxes?

Yes, you will need to report the interest earned on your redeemed savings bonds as income on your federal tax return for the year of redemption.

Can I redeem savings bonds at my local bank?

Most commercial banks no longer redeem paper savings bonds. The primary methods for redemption are through TreasuryDirect.gov or by mail using the appropriate U.S. Treasury forms.

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

• Specific tax advice: Consult a qualified tax professional for personalized guidance on how savings bond interest affects your tax situation, especially regarding education tax credits or other specific exclusions.
• Redemption of other savings bond series: This guide focuses on Series EE bonds. Other series (e.g., Series I) have different redemption rules and interest accrual periods.
• Investment alternatives: While this page covers redemption, it does not delve into alternative investment strategies or compare savings bonds to other financial products.
• International tax implications: This information is for U.S. taxpayers. If you are a U.S. citizen living abroad, consult a tax professional familiar with international tax laws.