Before redeeming savings bonds, you need to make a few calculations. For starters, check whether you're cashing a savings bond that has fully matured or is still earning interest. If it's not fully matured, decide when you want to cash it so as not to be penalized or to lose out on interest accruals. For instance, you'll pay a penalty equal to the bond's most recent three months of interest if you decide to cash it before the bond's fifth year anniversary. Also, some bond checks increase in value monthly, while others increase every six months. Once you've decided which of your savings bonds you wish to cash, you have three options to redeem them.
1. Take the savings bond to the bank or credit union. Even if you're not a customer of the bank, financial institutions are obligated to cash bond checks for individuals who show the proper identification. If you're an established customer of the bank or credit union -- meaning you've been a customer for at least six months --- you may not have to show any identification as the bank can use your account to verify your identity. If you're not a customer of the bank and only using your driver's license or another document to verify your identity, you're typically limited to cashing $1,000 in bond checks at a time. According to TreasuryDirect.gov, this limit can be lifted if you bring someone else who's an established customer of the bank who can identify you by name. Call the bank ahead of time to find out who can verify your identity.
2. Cash the paper savings bond online using TreasuryDirect's "SmartExchange" program. With this program, you can convert Series E, EE and I savings bonds into electronic securities. To do this, you first complete the online application at TreasuryDirect to setup your account and wait up to 14 days for an access card to arrive in the mail that allows you to manage your account online. Once inside your account, you use TreasuryDirect's "ManageDirect" feature to convert the paper bonds into electronic ones. To cash the bond, simply select the "Redeem Securities" option, choose the bond you wish to redeem and wait for the money to be electronically deposited into your bank account.
3. Send the savings bond directly to the Federal Reserve and wait for them to send you a redemption check or deposit the funds into your bank account. Before you can mail off your bond to the Federal Reserve, you must take your bond to the bank and have your signature verified by a certifying officer. If cashing multiple bonds, you can fill out and list your bonds on "Public Debt Form 1522" to have your signature verified once instead of on each bond. You can mail your paper bonds and the form to the nearest Treasury Retail Securities Site or the Minneapolis address listed on the "Public Debt Form 1522."
- Use the savings bond calculator at TreasuryDirect to find out what your bonds are worth and other information, such as the next interest accrual date and the final maturity date.
- Savings bonds must be held at least one year before cashing them.
- You must present a certified copy of the savings bond owner's death certificate if you are the beneficiary and cashing the bond at a bank.
- Only the parent with whom a minor child resides or the child's legal custodian can cash a savings bond for a minor child.
Items you will need
- Driver's license
- Bankrate.com; Rules for Cashing in U.S. Savings Bonds; Dorothy Rosen; May 2005
- MSN Money; Time To Cash In Your Savings Bonds?; MarketWatch; February 2010
- TreasuryDirect; Converting Paper Savings Bonds to Electronic Form; September 2008
- Savings Bond Advisor; How to Cash In a Savings Bond; Tom Adams; July 2004
- Savings Bond Advisor; Redeeming 100 Savings Bonds; Tom Adams; November 2004
- TreasuryDirect; The Guide to Cashing Savings Bonds; Department of the Treasury; November 2009