Do Banks Cash Savings Bonds? How the Process Works

United States savings bonds are a popular, low-risk investment. When it’s time to access these funds, many wonder if banks can cash them and what steps are involved. This guide explains the process for converting your savings bonds into cash.

Eligibility for Cashing Savings Bonds

The ability to cash a savings bond depends on its type, age, and who is presenting it for redemption. Currently, two primary types are issued: Series EE and Series I bonds. While both paper and electronic formats exist, electronic versions are now predominant as paper bonds are no longer sold directly to the public.

All savings bonds must be held for a minimum of one year from their issue date before redemption. Redeeming a bond before five years results in a penalty, forfeiting the last three months of interest earned. Series EE and Series I bonds generally mature after 30 years, ceasing to earn interest at that point.

The original owner or co-owner listed on the bond is typically authorized to cash it. For a minor, a parent or legal guardian may redeem the bond. If the original owner is deceased, a designated beneficiary or legal representative of the estate can cash the bond, often requiring additional documentation like a death certificate or letters of appointment.

Information and Documents Needed to Cash Bonds

Before attempting to cash a savings bond, gather the necessary information and documents. A valid, government-issued photo identification, such as a driver’s license or passport, is required to verify identity. A Social Security Number is also standard for tax reporting. If the name on the bond differs from the owner’s current name, such as due to marriage, proof of the name change may be necessary.

For paper savings bonds, proper endorsement by the owner(s) on the back of the bond is typically required. Sign the bond in the presence of the bank teller or certifying officer, who will verify your signature. To determine the current value of paper bonds before redemption, use the Savings Bond Calculator on the TreasuryDirect website. For electronic bonds, check their current value by logging into your TreasuryDirect account under “Current Holdings.”

Cashing Savings Bonds at a Bank

Cashing a savings bond at a financial institution involves a verification process to ensure proper handling. Not all banks offer this service, and some may only cash bonds for existing account holders, or those who have held an account for a specified period. It is advisable to contact your bank beforehand to confirm their policy and any specific requirements.

Upon presenting your bond and identification, a bank teller will initiate a verification process. This includes confirming your identity, your ownership, and the bond’s eligibility for redemption. The bank may also check for limitations on the value or number of bonds they can cash. You will likely need to sign a request for payment form in the presence of a bank official. Once verified, funds can typically be received as cash or through a direct deposit into your bank account.

Other Ways to Cash Savings Bonds

Beyond traditional banks, alternative methods exist for cashing savings bonds, especially for electronic bonds or when a bank cannot assist. Electronic savings bonds held in a TreasuryDirect account can be redeemed directly online. Log into your TreasuryDirect account, navigate to “ManageDirect,” and select “Redeem securities.” You can redeem all or part of an electronic bond, provided the redemption amount is at least $25 and at least $25 remains in the account for partial redemptions. Funds are then directly deposited into your linked bank account, typically within a few business days.

For paper savings bonds, redemption by mail is another option, requiring completion of FS Form 1522. The form asks for details like the bond’s serial number, issue date, Social Security Number, and bank account information for direct deposit. If the total value of bonds exceeds $1,000, your signature on the form must be certified by a notary public or authorized certifying officer. Mail the completed form and physical paper bonds to the Treasury Retail Securities Services, using the address provided in the form’s instructions. Unlike electronic bonds, paper bonds must be redeemed for their entire value.