As of publication, the United States Treasury department issues two types of bonds: EE and I bonds. You buy I bonds at face value and the bonds pay interest for 30 years. EE bonds cost 50 percent of the face value and also pay interest for 30 years. However, EE bonds actually mature when the bond reaches face value, and this usually occurs somewhere between 10 and 20 years after the issue date. You can redeem your mature savings bonds at local financial institutions.
Contact your local financial institution and find out whether you can cash your bonds there. Many financial institutions act as agencies and sell and redeem bonds on behalf of the Treasury department, but some institutions do not. The Treasury department does not keep a list of institutions that negotiate bonds, so you have to call banks directly to find out where you can redeem bonds.
Go to a financial institution that cashes bonds and identify yourself by presenting the teller with one form of government-issued identification. Under Treasury rules, you do not have to present an ID if you cash the bonds at a bank where you have held an account for at least six months. Sign the back of the bonds.
Hand your bonds to the teller and ask the teller to redeem the bonds. The teller must calculate the value of each bond by entering the issue date into a computer system that calculates the maturity value. This process can take several minutes, so allow yourself plenty of time to redeem your bonds.
Take your cash and ask the teller for a receipt. The receipt shows you how much you received for each bond. You have to pay federal income tax on your earnings, so you must keep your receipt so that you have the necessary information to file your taxes.
You cannot redeem savings bonds within one year of the issue date, and you incur a penalty fee of three months of interest if you cash-in bonds within five years of the purchase date. If you buy your bonds online from the Treasury's website, then you never take physical possession of the bond certificate and the bond proceeds are held in an online account that you can access from the Treasury Direct website. You can redeem electronic bonds by accessing your online account.
You can only cash $1,000, of bonds per bank visit, so if you have more than $1,000, of bonds to redeem you must sign the bonds in front of a bank officer and mail the bonds to your local Treasury Retail Securities Site. Some HH bonds are still in circulation, and you must also forward these bonds to the Treasury, because financial institutions cannot redeem HH bonds. You must provide the Treasury office with your bank account information, because proceeds from HH bonds are sent via direct deposit.