How to Sell or Redeem Your Savings Bonds

United States savings bonds are a secure investment backed by the U.S. government. Many individuals acquire these bonds as gifts or through direct purchase. This guide outlines the steps for selling or redeeming savings bonds, noting that the procedure varies depending on whether the bond is held in paper or electronic form.

Understanding Your Savings Bonds and Redemption Eligibility

Savings bonds are issued as paper certificates or electronic bonds held in a TreasuryDirect account. Electronic bonds, including Series EE and Series I bonds, are the standard for new purchases through TreasuryDirect. Paper bonds, while no longer issued for most new purchases since January 2025, remain valid and redeemable.

A bond becomes eligible for redemption after 12 months from its issue date. Redeeming a bond before five years of ownership results in a forfeiture of the last three months of interest. Most savings bonds, such as Series EE and Series I, accrue interest for up to 30 years from their issue date, then stop earning interest. For instance, Series EE bonds are guaranteed to double in value in 20 years and continue to earn interest for an additional decade.

Gathering Necessary Information and Documents

Before redemption, bondholders should assemble specific information and documents. A valid form of personal identification, such as a driver’s license or passport, is required. Bondholders also need their Social Security Number (SSN) or Taxpayer Identification Number (TIN).

For direct deposit, current bank account information, including routing and account numbers, is necessary. Individuals redeeming paper bonds must have the physical bond certificate ready. For electronic bonds, TreasuryDirect account access credentials are essential. For deceased owners or minors, additional documentation like a death certificate or proof of guardianship may be required.

Redeeming Paper Savings Bonds

Paper savings bonds can be redeemed at eligible financial institutions or by mail directly to the Treasury. Many banks and credit unions offer redemption services, though some may require you to be an account holder. When redeeming at a financial institution, present the physical bond and a valid photo ID, and sign the bond in the presence of a teller. The funds can often be disbursed as cash or directly deposited into your bank account.

To redeem by mail, complete FS Form 1522, “Special Form of Request for Payment of United States Savings and Retirement Securities.” Your signature on this form must be certified by an authorized officer, such as a bank official or notary public, especially for amounts over $1,000. After certification, mail the completed form and physical bond to the designated Treasury address. Funds are typically deposited into your linked bank account within a few weeks.

Redeeming Electronic Savings Bonds

Electronic savings bonds, held in a TreasuryDirect account, are redeemed online. Log into your TreasuryDirect account. Navigate to the “ManageDirect” section and select “Redeem securities” under “Manage My Securities.”

Select the specific electronic bonds you wish to redeem. Electronic bonds allow for partial redemptions of $25 or more, down to the penny, provided at least $25 remains in the bond. The funds are then directly deposited into the bank account linked to your TreasuryDirect profile, typically within one to two business days.

Understanding Tax Implications

Interest earned on savings bonds is subject to federal income tax but exempt from state and local income taxes. Bondholders can defer reporting interest for federal tax purposes until the bond is redeemed, reaches final maturity, or is otherwise disposed of.

Upon redemption, the total accrued interest will be reported to the Internal Revenue Service (IRS) on Form 1099-INT. This form is typically issued by the financial institution that redeems the bond or made available in your TreasuryDirect account. While some interest may be excludable if used for qualified higher education expenses, consult a tax professional for guidance.