When a savings bond matures, the bond owner can cash the bond by endorsing it and bringing it to a financial institution. If you have a bond owned by someone else that has been endorsed, you might be able to cash it, but this depends on the authority and relationship you have with the bond owner. Even if you can cash it, you'll need to provide some documentation to the financial institution and, if possible, bring the bond owner with you.
In general, you cannot cash a savings bond someone else has endorsed. Bonds cannot be "signed over," as reported by University Federal Credit Union. The person to whom the bond is made out to has to be with you in order for you to redeem the bond. This stipulation is designed to prevent fraud. Even if the bond owner is with you, the financial institution at which you cash the bond still will verify that the bond owner is who he says he is through a basic ID like a driver's license. This means you can't just have someone come to the bank with you and say he is the bond owner.
Some exceptions to the "owner is present" rule exist for cashing bonds. An example is if you have financial Power of Attorney for the owner. Another common example is if the child is a minor, and you are the child's parent or legal guardian. Still another example is if you are the executor of the bond owner's estate or a beneficiary. The common thread among all these exceptions is that people who can cash bonds for someone else have gone through the court to get financial authority that applies to the bonds. Usually, even if the bond owner has signed the bond, you must indicate your authority and relationship to the bond owner in the endorsement you make. For example, the United States Department of Treasury recommends the following endorsement for parents of minors: "I certify that I am the parent of Jane Doe with whom Jane Doe resides (or to whom legal custody has been granted). She is ___ years old and is not of sufficient understanding to make this request. John Doe on behalf of Jane Doe"
What You Need
If you have a savings bond that is endorsed and have legal authority to act on the bond owner's behalf, the financial institution to which you take the bond will want to verify your identity, just as it would for the bond owner. It also will want to verify that you truly hold the authority you claim to have. Therefore, you will need identification such as a driver's license and court documents or correspondence that clearly indicates the authority the court granted. In the instance that the bond owner endorsed the bond and then passed away, you can cash the bond as a beneficiary, but you'll need a copy of the death certificate along with probate documents such as the bond owner's will, that show your entitlement.
Although you can cash a signed savings bond before the date of maturity, doing so may not be in your best financial interests. If you cash out a savings bond prior to the date of maturity, you will have to pay a penalty. At the time of publication the penalty was the amount of interest accrued over the most recent three months. This decreases the overall value of the bond.
- Bankrate.com; Rules for Cashing in U.S. Savings Bonds; Dorothy Rosen; May 2005
- University Federal Credit Union; Savings Bonds; 2011
- U.S. Department of Treasury; Redeeming EE/E and I Bonds Under Special Circumstances; June 2011
- GoBankingRates.com; Penalties Of Cashing Out Savings Bonds Early; 2008
- U.S. Department of Treasury; What Is the Penalty If I Cash My Bond Within the First 5 Years?; October 2010
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