Where to Deposit Savings Bonds and How It Works

Savings bonds are a secure, low-risk investment product issued by the U.S. Department of the Treasury. They allow individuals to lend money to the government, which repays the principal with interest. Both paper and electronic versions exist, with distinct management and redemption processes. Understanding how to access their value is important for financial planning.

Identifying Your Savings Bonds

Before redeeming or managing your savings bonds, understand the specific type you possess. The two primary types are Series EE and Series I bonds. Series EE bonds feature a fixed interest rate and are guaranteed to double in value over 20 years, earning interest for up to 30 years.

Series I bonds offer a variable interest rate that adjusts based on inflation, also earning interest for up to 30 years. Both Series EE and Series I bonds can be purchased electronically, while paper Series I bonds were available for purchase with tax refunds.

Savings bonds can be either physical paper bonds, commonly issued before 2012, or electronic bonds, purchased online through TreasuryDirect. To determine the current value of a paper bond, use the Savings Bond Calculator on the TreasuryDirect website. This tool requires inputting the bond’s series, denomination, and issue date. For electronic bonds, the current value is accessible by logging into your TreasuryDirect account. All savings bonds have a minimum holding period of one year before they can be redeemed. If cashed before five years, a penalty of three months’ interest is applied. Bonds cease earning interest after their final maturity, typically 30 years from the issue date.

Redeeming Paper Savings Bonds at Financial Institutions

Redeeming physical paper savings bonds involves visiting a local commercial bank or credit union. While many financial institutions offer this service, contact them in advance to confirm their policies, as some may have specific requirements or limits on the amount they will cash. Some banks might only redeem bonds for existing account holders, or for those who have held an account for a certain duration, such as six months or five years.

When proceeding with redemption, the bondholder must present the physical paper bond(s) along with valid government-issued photo identification, such as a driver’s license or passport. Providing a Social Security Number is also required to complete the transaction. The process involves verifying your identity, endorsing the bond(s) in the presence of a bank official, and then receiving the funds. Funds may be provided as a direct deposit to an account or as a check. Paper savings bonds must be redeemed for their entire value, unlike electronic bonds which can be partially redeemed. If the bond value exceeds $1,000, the bank might require a certified signature on FS Form 1522.

Managing Electronic and Converting Paper Bonds via TreasuryDirect

TreasuryDirect serves as the U.S. Treasury’s online platform for individuals to purchase, manage, and redeem electronic savings bonds and other Treasury securities. This system provides direct access to your investments.

Establishing a TreasuryDirect account involves an online application process, taking around 10 minutes. Applicants must provide personal information, including their Social Security Number or Employer Identification Number, a U.S. address, an email address, and bank account and routing numbers for linking a checking or savings account. This linked bank account facilitates both purchases and redemptions. After providing this information, users create a password, select security questions, and choose a personalized image for enhanced security.

Once an account is established, electronic savings bonds can be redeemed directly through the TreasuryDirect platform. Users navigate to the ManageDirect section, select the “Redeem securities” option, choose the specific bonds they wish to redeem, and confirm the bank transfer. Electronic bonds offer flexibility, allowing for partial redemptions in amounts of $25 or more, provided at least $25 remains in the bond. The funds are transferred to the linked bank account within two business days following the redemption request.

For those holding paper savings bonds, TreasuryDirect also offers the option to convert them into electronic form. This process involves completing FS Form 3250 and mailing the physical bonds to TreasuryDirect. Converting paper bonds to electronic format centralizes management within the online account. Once converted, these bonds can be managed and redeemed with the same ease as bonds initially purchased electronically.

Addressing Special Redemption Situations

Special circumstances require specific procedures when redeeming savings bonds. If paper bonds are lost, stolen, or destroyed, the owner can request a reissue or payment by submitting FS Form 1048, “Claim for Lost, Stolen, or Destroyed United States Savings Bonds,” to the Treasury Retail Securities Services. This form requires details about the missing bonds and, for amounts over $1,000, needs to be signed in the presence of a notary or certifying officer. If the bond’s serial number is unknown, the Treasury Hunt tool on the TreasuryDirect website can assist in locating the bond and generating FS Form 1048. Replacement Series EE and Series I bonds are issued in electronic form into a TreasuryDirect account, even if the original was paper.

Redeeming bonds for a deceased owner involves specific documentation to ensure proper distribution of assets. If a bond was jointly owned, the surviving co-owner can redeem it by providing a certified copy of the death certificate and completing FS Form 1522.

For estates undergoing formal administration, the legal representative must complete FS Form 1455, “Request by Fiduciary for Distribution of United States Treasury Securities,” along with a certified copy of the letters of appointment and the death certificate. If the estate is not formally administered, FS Form 5336, “Disposition of Treasury Security Belonging to A Decedent’s Estate Being Settled Without Administration,” is used to request payment to the entitled beneficiaries. This form requires the signature of a voluntary representative, who must be at least 18 years old and a surviving spouse, blood relative, or next of kin, and a certified death certificate.

When redeeming bonds registered to a minor, the process requires the parent or legal custodian to act on the child’s behalf. For paper bonds, the parent must certify in writing on the back of the bond that the child is too young to sign, resides with them or is in their legal custody, and include the child’s Social Security Number and age. Financial institutions may process these redemptions if the parent presents proper identification. For electronic bonds held in a minor-linked TreasuryDirect account, the parent, as custodian, can manage and redeem the bonds through their own TreasuryDirect account. The proceeds of such redemptions must be used for the minor’s benefit.