- You can cash in a savings bond at a bank or through the US Department of the Treasury.
- Savings bonds earn interest for 30 years, but you can cash them in after five years without paying a penalty.
- Not all banks cash in savings bonds, and some require you to already have an account with the institution.
President Franklin D. Roosevelt started savings bonds in 1935. Since then, bonds have become common investments, especially for people who want a guaranteed rate of return.
If you have a savings bond, you may be able to cash it in now. The process will depend on which type of bond you have, how long you’ve held the bond, and which bank you use.
How does a savings bond work?
Savings bonds are debt securities that allow the government and other entities to leverage debt to fund business projects and increase the return on those investments.
So when you buy a savings bond through the US Department of the Treasury, you’re essentially lending money to the government. In return, you get a low-risk bond that offers periodic gains in the form of coupon payments for up to 30 years — and a return on the principal amount you purchased the bond for once it matures.
Once you’re ready to collect the money from your bond, you can likely cash it in — or “redeem” it — at a bank. However, the exact process depends on your situation.
How to cash in savings bonds
There are two ways to cash in a savings bond: visit a bank or mail a form to the US Department of the Treasury. Going through your bank could be the fastest option.
1. Redeem your savings bond at a bank
If you’re the owner or co-owner of a bond, you may be able to cash it in at a bank. You need to provide proof that you’re legally entitled to redeem the bond if you aren’t listed as an owner. For example, you may want to cash in your child’s bond when they’re still a minor. You’d need to write a statement on the back of the bond claiming either that the child lives with you or you have custody, and that they are too young to make the request themselves.
Cashing in a savings bond can be relatively easy if you bring everything with you and know what to expect. For a smooth process, contact the bank beforehand to talk about your options before you make the trip.
What do you need to bring when you cash in a savings bond?
You’ll need to bring the following to a bank when you’re ready to cash in a bond:
- The paper bond(s) — you can’t redeem an electronic bond at a bank. You’ll have to use the second option, which is to go through the US Department of the Treasury.
- Government ID — which can be your driver’s license or passport
- Original owner’s death certificate, if you’re the legal beneficiary of the owner of the bond who has died
- Form 1522 — fill this out beforehand, but wait to sign it until you are at the bank. If you don’t have the form with you, the bank may be able to provide a copy.
Can you cash in a savings bond at any bank?
You may be able to redeem a savings bond at a bank, but not all institutions cash in bonds.
“As a general rule, you’ll have better luck with larger national institutions,” says Abugideiri. “Bigger institutions have more robust infrastructures and can handle various types of transactions. Whereas your smaller, one-off institutions or even
are going to have their own limitations that are subject to those types of banking institutions.”
It’s usually easier to redeem a bond at a bank where you already have an account than one where you don’t have an account. For example, Bank of America requires you to have a Bank of America checking or savings account to cash in a bond. If you’ve had the account for less than six months, you can only redeem up to $1,000 per day.
You might be able to cash in a bond at a bank where you don’t have an account, but it depends on the institution. It could be easier to open an account at a bank, then redeem the bond.
Instead of going through a bank, you may prefer to cash in a bond through the US Department of the Treasury. To do so, download and fill out Form 1522 from the Treasury website. If you’re redeeming more than $1,000, you’ll need to sign it in front of a notary or certifying officer. Then mail the form to the following address:
Treasury Retail Securities Services
PO Box 9150
Minneapolis, MN 55480-9150
2. Redeem your savings bond through the US Treasury Department
If you have an electronic bond or simply prefer not going through a bank, you can cash in a bond through the US Department of the Treasury. To do so, download and fill out Form 1522 from the Treasury website. If you’re redeeming more than $1,000, you’ll need to sign it in front of a notary or certifying officer. Then mail the form to the address mentioned above.
Types of savings bonds
There are various types of savings bonds — with some, such as Series E and HH bonds, now out of rotation over the years. Now, there are two types left that you can buy: Series EE bonds and Series I bonds.]
Series EE bonds
If you bought a Series EE bond in May 2005 or later, it earns a fixed interest rate issued when purchased. If you bought it before May 2005, the rate is variable. The government assigns Series EE bonds an interest rate every November and May. From November 2021 through April 2022, the rate is 0.10%.
Series EE bonds double in value once you’ve kept them for 20 years. For example, if you paid $100 for the bond, it’s worth $200 after 20 years.
You can buy Series EE bonds in penny increments, from $25 to $10,000 per year.
Series I bonds
Series I bonds earn a combination of a fixed interest rate and a variable rate that’s intended to keep up with inflation. The latter is set every November and May. From November 2021 to April 2022, the combined Series I bond rate is 7.12%.
Each year, you may purchase $25 to $10,000 in electronic Series I bonds or $50 to $5,000 in paper bonds.
Buy in penny increments starting at $25 for electronic bonds, or in denominations of $50, $100, $200, $500, or $1,000 for paper bonds.
Both Series EE and Series I bonds earn interest for 30 years when they reach maturity.
“Prior to EE bonds, the government sold E bonds. And although they’re no longer earning interest, they are still redeemable,” says Yusuf Abugideiri, senior financial planner at financial services company Yeske Buie. Some banks will redeem Series E bonds, but you may need to go through the Treasury Department’s website.
When can you cash in a savings bond?
You can cash in Series EE and I bonds as soon as 12 months after purchasing them. However, if you redeem them before the five-year mark, you’ll lose three months’ interest.
Abugideiri recommends holding onto a Series EE bond for at least 20 years, if possible, because the value doubles after 20 years. “So if you’re getting out early, part of the ‘penalty’ is that you’re giving up on returns that are otherwise guaranteed for the future,” he says.
Savings bonds stop accruing interest after 30 years. There’s no penalty if you redeem a bond after, say, 32 years instead of 30, “…other than the implicit penalty of missed returns,” says Abugideiri. “If there were two years when you could have taken those proceeds and invested in a higher-performing asset, you would have foregone those earnings.”