How Long Does It Take to Cash In Savings Bonds?
Understand the timelines and processes for accessing funds from your savings bonds, from eligibility to final disbursement.
U.S. savings bonds are a secure, government-backed investment designed to grow in value. They represent a commitment from the U.S. Treasury to repay a principal amount plus interest. Understanding the process and timeframes for cashing them is important for efficient access to funds. This guide clarifies when savings bonds can be redeemed and the steps involved.
When Bonds Can Be Cashed
Savings bonds must meet conditions related to issue date and holding duration before cashing. All savings bonds, including Series EE and Series I bonds, have a minimum holding period of one year from their issue date before they become eligible for redemption. Attempting to cash a bond before this one-year mark is not permitted.
Additionally, cashing a bond within the first five years of its issue date incurs a penalty. If redeemed during this period, the bondholder forfeits the last three months of interest that would have otherwise accrued. For example, if a bond is cashed after 24 months, only 21 months of interest will be paid.
Most Series EE and I bonds earn interest for up to 30 years, reaching final maturity and stopping interest accrual. Holding bonds for at least five years avoids the interest penalty, and holding until they stop earning interest maximizes returns.
Cashing Paper Bonds at a Financial Institution
Cashing paper savings bonds involves a visit to a local bank or credit union. To complete this transaction, the bondholder must bring the unsigned paper bond(s) and a valid form of identification, such as a government-issued driver’s license. Some financial institutions may require two forms of identification.
At the institution, present the bond and identification to a teller or customer service representative. The institution verifies the bond’s authenticity and the identity of the person cashing it. For eligible bonds, funds are disbursed immediately, either as cash or by direct deposit into an account.
Call ahead to the bank or credit union to confirm their policy on cashing savings bonds, as not all branches offer this service or may have specific requirements, such such as requiring an existing account.
Cashing Electronic Bonds Through TreasuryDirect
Electronic savings bonds are cashed through a TreasuryDirect account. Bondholders must log into their TreasuryDirect account and navigate to the “ManageDirect” or “Redeem” section. From there, they can select the specific bonds they wish to redeem.
The system prompts you to specify the linked bank account where the funds should be deposited. After confirming the redemption request, funds are deposited into the designated bank account within one to two business days. When cashing electronic bonds, a minimum of $25 or any amount above that in one-cent increments can be redeemed.
Additional Factors Affecting Cashing Time
Several factors can influence the time it takes to cash savings bonds. Incomplete or inaccurate documentation, such as mismatched names on identification and the bond, can cause delays. Ensuring all personal details are consistent and current is important for a smooth transaction.
An alternative for cashing paper bonds is mailing them directly to the Treasury. This process takes longer than in-person redemption at a bank, ranging from two weeks to several weeks, due to mail transit and internal processing times. This method requires completing and submitting FS Form 1522 along with the unsigned bonds.
Cashing bonds for a deceased owner introduces additional requirements and can extend processing time. This requires specific legal documentation, such as a certified copy of the death certificate. Depending on the estate’s administration, probate documents or FS Form 5336 for non-administered estates may be needed. Required forms and supporting evidence vary based on probate court involvement and bond registration type.