U.S. Savings Bond Redemption Information

by W D Adkins

If you own U.S. Series I or Series EE savings bonds, the time will eventually come when you want to redeem them. Redemption of savings bonds is a fairly simple process, although the procedure varies depending on whether the bonds are in electronic or paper form. The Bureau of the Public Debt stopped selling paper savings bonds as of January 2012. However, you may continue to hold paper bonds until they mature. The procedure for the redemption of paper savings bonds remains the same.

General Rules

When you purchase savings bonds, you may not redeem them for 12 months after the date of purchase. You will forfeit three months' interest if you redeem a savings bond less than five years after the date of purchase. The procedures for redemption are the same for both types of savings bonds. Ownership of savings bonds is nontransferable. The only person who can redeem a savings bond is the registered owner or a person who received the bond as an inheritance.

Electronic Bonds

If you own electronic savings bonds purchased through Treasury Direct, redemption is very easy. Log on to your Treasury Direct account and follow the prompts to request payment of the bonds. Check to make sure the checking or savings account information you have on file with your Treasury Direct account is correct. The amount of the bonds, including accrued interest, will be transferred to your bank account within one business day.

Paper Savings Bonds

A paper savings bond can be redeemed at most banks, credit unions and similar financial institutions. Take bonds you wish to redeem to the bank and sign the request for payment form on the back of the bonds in the presence of a bank official. You also need to bring valid proof of identity, such as your driver’s license, state-issued ID or military ID. The bank can pay you for up to $1,000 worth of savings bonds at one time. If you want to redeem more than $1,000 worth of bonds, follow the same procedure and provide your Social Security number. You then must mail the bonds to the nearest Treasury Retail Securities Site. Addresses of Treasury Retail Securities Sites are available on the Treasury Direct website.

Inherited Savings Bonds

If you are co-owner of a saving bond with a person who has died, you have right of survivorship. This means ownership passes to you automatically and you may redeem the bond using the normal procedure. If you inherit savings bonds with a value of $100,000 or more as of the date of the owner’s death, disposition of the bonds must be handled by a court-appointed administrator. For bonds valued at less than $100,000, there are two possibilities. Normally, you must complete Form PD F 5336. Mail the completed form, proof of the owner’s death and the bonds, if they are in paper form, to the Bureau of the Public Debt. The address is available on their website. Some states have special rules for small estates. In this case, if there are multiple heirs and a bond is not specifically bequeathed to a particular heir, all heirs must complete and sign Form PD F 5394 and mail the forms, the proof of death and paper bonds to the Bureau of the Public debt.

Photo Credits

  • Creatas/Creatas/Getty Images