How to Cash In Your Paper Savings Bonds

Paper savings bonds, such as Series EE and Series I bonds, are debt securities issued by the U.S. Department of the Treasury. Backed by the full faith and credit of the United States government, they have historically served as a reliable savings tool. While paper bonds are no longer sold by financial institutions, with electronic versions now available through TreasuryDirect, many individuals still hold physical bonds from past purchases or gifts. Understanding the process to convert these physical assets into cash is important for bondholders.

Eligibility and Required Information

To redeem a paper savings bond, the individual presenting it must be legally entitled. This includes the bond’s owner, a named co-owner, a designated beneficiary, or a legal representative with proper documentation. Before attempting to cash a bond, gathering specific documentation is necessary. This typically includes a valid government-issued photo identification (such as a driver’s license or passport) and the Social Security Number (SSN) of the bond owner(s). The physical paper savings bond must also be in good condition.

Savings bonds must be held for a minimum of one year from their issue date before redemption. Cashing a bond before five years of ownership results in a forfeiture of the last three months of interest earned. Series EE and Series I bonds accrue interest for up to 30 years, after which interest ceases. Redeeming bonds after they stop earning interest ensures the bondholder receives the full value of their investment.

Redemption Methods

Once eligibility information and documents are assembled, there are two primary methods for redeeming paper savings bonds. The chosen method depends on convenience and specific bond characteristics. Both options require the bond to be physically presented or mailed.

One common method is redeeming the bond at a local financial institution, such as a bank or credit union. It is advisable to contact the institution beforehand to confirm they cash savings bonds, as not all branches offer this service, and some may require you to be an account holder. The bondholder will present their valid government-issued photo identification and the physical bond, which typically needs to be signed in the presence of a teller or authorized certifying officer. After verification, funds are usually deposited directly into an account or provided as cash.

Alternatively, paper savings bonds can be redeemed directly through the U.S. Department of the Treasury via TreasuryDirect. This process involves completing FS Form 1522, a Special Form of Request for Payment. If the total value of bonds exceeds $1,000, the bondholder’s signature on the form typically requires certification by a notary public or an authorized certifying officer. The completed form, along with the physical bonds, is mailed to the address provided on the form, and proceeds are sent via direct deposit. Paper savings bonds must be cashed for their entire value, unlike electronic bonds which allow for partial redemption.

Special Circumstances for Redemption

Certain situations require additional steps or documentation when redeeming paper savings bonds, deviating from the standard process. These scenarios ensure proper authorization and transfer of funds.

Redeeming for a Minor

When redeeming a bond for a minor, the parent or legal guardian can act on the child’s behalf if the child is not old enough to understand the request for payment. The parent must certify their relationship and, if mailing the bond for redemption, may need to use FS Form 1522 with specific language written on the bond itself or the form indicating their role and the child’s age and Social Security Number. Financial institutions may cash bonds presented by a parent, but if mailed, direct submission to the Treasury Retail Securities Site is common.

Bonds of a Deceased Owner

For bonds belonging to a deceased owner, the redemption process varies based on whether a co-owner or beneficiary is named on the bond, or if the bond is part of the deceased’s estate. If a surviving co-owner or beneficiary is listed, they can typically redeem the bond by presenting a copy of the death certificate along with their identification. If the bond is solely in the deceased’s name and part of their estate, the executor or administrator may need to provide legal documents, such as a death certificate and probate documents or letters of appointment, often utilizing forms like FS Form 1455 or FS Form 5336 to facilitate distribution or payment.

Lost, Stolen, or Destroyed Bonds

If a paper savings bond is lost, stolen, or destroyed, it cannot be cashed until a replacement is issued or the claim is processed. The bondholder must submit FS Form 1048, a Claim for Lost, Stolen, or Destroyed United States Savings Bonds, to the U.S. Treasury. This form requires details about the missing bond, and the signature must typically be certified by a notary or authorized officer. The Treasury also offers an online tool called Treasury Hunt to help locate unredeemed bonds, which can assist in completing the necessary forms. Replacements for lost paper bonds are generally issued as electronic bonds within the TreasuryDirect system.