How to Cash a Treasury Bond: A Step-by-Step Process

Treasury bonds represent a debt security issued by the U.S. government, signifying a loan made by an investor to the federal government. These instruments are widely regarded as a secure investment choice due to the full faith and credit backing of the United States government. This guide provides a comprehensive overview of the process involved in redeeming, or cashing, a Treasury bond.

Types of Treasury Bonds and How They Are Held

Understanding the type of Treasury bond you possess and how it is held is important, as the redemption process varies. Savings bonds, such as Series EE and Series I, were historically issued as physical paper certificates, though new issuances are exclusively electronic. Electronic savings bonds are held digitally within an online account, typically through TreasuryDirect, the U.S. Treasury’s direct-to-consumer platform.

Marketable securities, which include Treasury Bills, Treasury Notes, and Treasury Bonds, represent another category of government debt. These securities are generally held in electronic book-entry form, either directly through a TreasuryDirect account or indirectly through a commercial brokerage account. The method of holding, whether physical or electronic, and whether directly with the Treasury or through an intermediary, directly influences the specific steps required for cashing the bond.

Gathering Required Information and Documents

Before initiating the redemption process, it is important to assemble all necessary information and documents. A valid, government-issued photo identification, such as a driver’s license or passport, is consistently required to verify identity. Proof of ownership is equally important, which means having the physical bond certificate in hand for paper bonds or access to your TreasuryDirect account for electronic holdings.

For paper savings bonds, the bond certificate must be properly endorsed by the owner, typically by signing the back of the bond. Specific forms are also often necessary, such as FS Form 1522. This form requires detailed information, including the bond serial number, the owner’s name, address, Social Security Number, and bank account details for direct deposit. For bonds belonging to a deceased owner, FS Form 5336 may be required. These official forms can be obtained from the TreasuryDirect website or from many financial institutions.

Cashing Your Treasury Bond: Step-by-Step

The mechanics of cashing your Treasury bond depend on its type and how it is held. For paper savings bonds, two primary methods are available. You may present the endorsed bond, along with your valid identification, to a teller at a financial institution, such as a bank or credit union.

Alternatively, paper savings bonds can be redeemed via mail by sending the signed bond and any necessary forms, such as FS Form 1522, to Treasury Retail Securities Services. The mailing address for these submissions is P.O. Box 9150, Minneapolis, MN 55480-9150. Electronic savings bonds held in a TreasuryDirect account can be redeemed conveniently online. This involves logging into your account, navigating to the “ManageDirect” section, selecting the bond for redemption, choosing the amount (full or partial), and confirming the transaction.

For marketable securities like Treasury Bills, Notes, and Bonds, redemption typically occurs automatically at maturity if held directly with TreasuryDirect, with funds deposited into your linked bank account. If these securities are held through a brokerage firm, the brokerage will manage the maturity process; selling before maturity also involves working through your broker. After submission, processing times can vary, ranging from immediate payment at a bank for savings bonds to several weeks for mailed requests or TreasuryDirect redemptions. Payments are generally made via direct deposit to a linked bank account, or by check.