Where to Cash Your Savings Bonds: A Complete Redemption Guide

If you’re holding U.S. savings bonds and wondering where and how to convert them into cash, you’re not alone. Millions of Americans own these government-backed securities, and deciding when and where to redeem them is a crucial part of managing your savings. Let’s walk through your redemption options and what you need to know before cashing out.

Your Redemption Options: Where Can You Actually Cash In?

The process for cashing your bonds depends on their type and format. Electronic bonds purchased through TreasuryDirect offer the most straightforward path—you can redeem them directly through your online account and receive funds in your checking or savings account within days. This hassle-free method makes digital Series EE and Series I bonds increasingly popular.

Paper bonds present more options but require more legwork. Many traditional banks and credit unions will cash them if you maintain an account with them, though they may impose dollar limits and require identification. However, older bond series like HH bonds and special categories cannot be redeemed at financial institutions. Instead, you’ll need to complete a Treasury form (FS Form 1522), arrange a certified signature, and mail the bond directly to Treasury Retail Securities Services.

Your bank remains your best starting point even for complicated redemptions. Staff can guide you through the process, certify your signature, and coordinate with federal authorities—especially important if you’re redeeming an inherited bond or dealing with an estate.

Before You Cash In: Critical Questions to Ask

Is your bond still earning? Once a savings bond stops accruing interest—either because it’s fully matured or maxed out at face value—keeping it gains you nothing. These mature bonds should be redeemed and redirected toward investments with better returns.

Will you face an early withdrawal penalty? This is crucial. Bonds cashed within the first year cannot be redeemed at all. If you redeem between one and five years, you forfeit three months of interest. Understanding this penalty structure helps you make an informed decision about your timing.

Have you reached full value? Some older Series EE bonds were sold at 50% of face value. You can’t access the full redemption amount until the bond matures or reaches its value guarantee. Confirm your bond’s specifics before expecting a payout.

What are your actual financial goals? Savings bonds serve a specific purpose: generating stable, predictable returns over extended periods. Are you cashing out for emergency funds? Looking to move money into higher-yield savings accounts or stock market investments? Retirement planning? Your answer should align with your broader financial strategy and risk tolerance.

Understanding What Your Savings Bond Is Worth

Several factors determine redemption value. The bond series matters—Series EE, Series I, older varieties like Series E or HH—each follow different earning structures. Issue date is equally important; a bond issued in 1995 evolves differently than one purchased last month. Whether your bond was sold at full face value or at a discount affects its redemption timeline.

For electronic bonds, log into TreasuryDirect and check your account for current values. For paper bonds, the Treasury’s free online calculator eliminates guesswork. Enter your bond’s series designation, serial number, denomination, and issue date, and you’ll get an exact current valuation.

The Bond Types You Might Own

Series EE bonds sold today carry a fixed interest rate—currently a modest 0.10% for bonds purchased between May and October 2022. However, the government guarantees these bonds will double in value within 20 years, regardless of rate fluctuations. Older EE bonds issued between 1997-2005 earn variable rates updated semi-annually, currently at 1.60%. You can purchase EE bonds in $25 increments, up to $10,000 annually.

Series I bonds offer inflation protection through a two-part rate structure: a fixed component plus an inflation adjustment calculated twice yearly. With inflation elevated, Series I bonds issued through October 2022 featured a compelling 9.62% rate. You can buy electronic Series I bonds starting at $25 (in one-penny increments above that), with an annual limit of $10,000. Paper Series I bonds require a $50 minimum and are available through $1,000 denominations, capped at $5,000 yearly.

Older series—including Series E (discontinued 1980, stopped earning in 2010), Series HH (issued 1980-2004), and specialized categories like Gulf Coast Recovery Bonds and Patriot Bonds—may still hold cash value and continue earning interest. While no longer sold, these bonds remain redeemable through the formal Treasury process.

Tax Implications When You Redeem

Interest earned on U.S. savings bonds faces federal income tax but escapes state and local taxation. Depending on circumstances, your redemption might also trigger estate, inheritance, or gift tax considerations. You have flexibility in reporting: you can declare interest annually as it accrues, or delay reporting until after redemption. A tax professional can advise which approach suits your situation.

How Savings Bonds Work: The Mechanics

When you purchase a bond, you’re essentially lending money to the U.S. government. In return, Treasury guarantees repayment plus interest over a defined period. This government backing makes bonds exceptionally safe investments.

Interest accrues monthly and compounds semi-annually on current bonds, reaching maturity after 30 years for bonds issued today. Older bonds may mature after 20 years. The earliest you can redeem is 12 months after purchase; doing so before the five-year mark triggers that three-month interest penalty mentioned earlier.

Bottom Line

Whether you’re discovering forgotten childhood bonds in a drawer or inheriting them from a loved one, knowing where to cash your savings bonds—and understanding the implications of doing so—protects your financial interests. Use TreasuryDirect for electronic redemptions, contact your bank for paper bonds, and carefully evaluate whether redemption aligns with your financial timeline. The Treasury Department’s resources and professional financial guidance can clarify any remaining questions about your specific situation.