Where Can You Cash In a Savings Bond?
Learn how to easily cash in your savings bonds, whether paper or electronic. This guide covers the entire redemption process, from preparation to receiving your funds.
United States Treasury savings bonds represent a secure, interest-bearing investment option for many individuals. These bonds are backed by the full faith and credit of the U.S. government, providing a reliable savings vehicle.
Preparing to Redeem Your Savings Bond
Before initiating redemption, understand the bond’s characteristics. Savings bonds have a minimum holding period of 12 months before they can be redeemed. Redeeming a bond before five years of issuance results in a forfeiture of the last three months of interest.
Identify whether you possess a paper bond or an electronic bond. Paper bonds are physical certificates, while electronic bonds are held digitally within a TreasuryDirect account. To proceed with redemption, you will need a valid government-issued photo identification and your Social Security Number. Determine the current value of your bond using the Bond Value Calculator available on the TreasuryDirect website or by contacting TreasuryDirect.
Redeeming Paper Savings Bonds
Redeeming paper savings bonds involves a visit to a financial institution. Most banks and credit unions provide redemption services for these physical certificates. Contact your chosen bank beforehand to confirm their policies and requirements for bond redemption.
When visiting the financial institution, bring the physical paper bond, your valid government-issued photo identification, and Social Security Number. Present these documents to a bank official. Sign the bond in the official’s presence, who will verify your identity and the bond’s authenticity. Following verification, funds are disbursed, typically through a direct deposit into your bank account or by check.
Redeeming Electronic Savings Bonds
Electronic savings bonds, managed through a TreasuryDirect account, require an online redemption process. Log in to your personal TreasuryDirect account using your account number and password.
Once logged in, navigate to the “ManageDirect” section for bond redemption options. You can select specific electronic bonds or portions for redemption. Designate the bank account for direct deposit. After confirming the transaction, funds are processed and deposited into your designated bank account within one to two business days.
Important Considerations for Redemption
When redeeming savings bonds, understanding the tax implications is important. The interest earned on savings bonds is subject to federal income tax, though it is exempt from state and local income taxes. Bondholders have the option to report the interest annually or defer reporting until the bond is redeemed, matures, or changes ownership.
Upon redemption, the Bureau of the Fiscal Service will issue a Form 1099-INT, detailing the interest earned for federal income tax reporting. If a paper bond is lost, stolen, or destroyed, contact TreasuryDirect or the Bureau of the Fiscal Service for assistance with reconstruction or replacement. Verify the deposit of funds into your designated account after redemption.