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How to Cash in US Savings Bonds

by Ryan Guina

For as long as most of us can remember, US Savings Bonds have been a safe place to save  and invest money.  There may not be a great deal of growth opportunity in savings bonds or US Treasury Bonds when compared to some other investments, however there is very little risk involved with these investments. When compared to a traditional savings account, the US savings bond ranks right up there as one of the safest savings tools available.

Savings bonds differ from savings accounts held in financial institutions which are insured by the FDIC in that they are backed by the United States government.  Popular as gifts for children, students and family members it becomes important for recipients to understand how and when to cash in their savings.  Here we look at the how you can redeem US savings bonds to collect their cash value.

Ben Franklin Series EE US Savings Bond

Ben Franklin Series EE US Savings Bond

How to Cash in US Savings Bonds

Where Can You Cash in US Savings Bonds?

The first question asked by most savings bond owners is where they can redeem their savings bonds.  Paper bonds can be cashed in at most financial institutions such as a bank or credit union.  It is a good idea to contact the financial institution in advance to confirm whether or not they are able to redeem your savings bonds, and what documentation is required to confirm identification and ownership of the savings bond.  Electronic bonds which were purchased at TreasuryDirect can be redeemed by logging onto the website and following the on-screen directions.  Once redeemed, you can expect a credit reflecting the amount redeemed in your checking or savings account within one business day.

Special Considerations When Cashing in US Savings Bonds

Savings bonds must be held for at least one year before they can be cashed in.  It is not necessary to wait to redeem a savings bond until it matures, however doing so before the savings bond is five years old will result in the forfeiture of interest earned in the three month period prior to redemption.  Keep in mind that savings bonds are subject to taxation.  This includes estate, gift, inheritance and federal income tax on interest earned.  Savings bond owners can opt to defer interest reporting until the savings bond is redeemed or report interest annually as it accrues.

Another important factor to consider is the fact that savings bonds are non-transferable.  This results in special considerations for parents redeeming savings bonds owned by minor children or redeeming savings bonds when the owner is incapacitated.  Minor children who are old enough to understand and sign for the redemption can do so if they have identification accepted by the bank.  Savings bonds issued to children who are too young to participate in the redemption process may be cashed in by a parent or legal guardian who signs for the request of payment.  This signature on the back of the bond should certify that the parent is signing on behalf of the minor who is not old enough to understand the request.  Individuals who have Power of Attorney for a friend or relative who is unable to represent themselves can request a special form from the Treasury which addresses the special needs of this situation.

For more information regarding US savings bonds and other securities, visit the official website of the U.S. Department of the Treasury Bureau of the Public Debt.


Published or updated December 1, 2010.
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{ 3 comments… read them below or add one }

1 Blue Spyder

I still like savings bonds, even if they not paying anything these days.

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2 Rob McCance

My grandparents left me some of these and I got them when I was around 18 or 19. Of course, I immediately cashed them in. I like to think that they somehow contributed to my college degree, but who knows really.

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3 Aileen Arakawa

My rommate, Jo C McKinney, died on 3-11-11 and left all her personal property, including her savings bonds, series EE to me. Her bonds are in her name. What do I need to do to change the bonds to my name?

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