Who Is Authorized to Cash Savings Bonds?

Savings bonds are investment products issued by the U.S. Department of the Treasury. These securities offer a secure way to save, accumulating interest. Understanding redemption rules is important, as eligibility to cash a bond depends on its registration and the bondholder’s relationship to the security.

Identifying Eligible Redeemers

The authority to redeem a savings bond rests with individuals named on the bond’s registration. A sole owner can redeem a bond by presenting proper identification. For co-owned paper bonds, either individual can redeem it. For electronic bonds in a TreasuryDirect account, the principal owner has exclusive redemption ability.

A named beneficiary can redeem a bond only after the death of the owner or both co-owners. This requires the beneficiary to provide a certified death certificate and identification. If the owner has passed and no co-owner or beneficiary is designated, the bond becomes part of the deceased’s estate. A legal representative, such as a court-appointed executor or administrator, can redeem bonds by presenting the death certificate and official letters of appointment.

For estates not undergoing formal court administration, especially if the total value of Treasury securities is $100,000 or less, a voluntary representative can handle redemption. This role is assumed by a surviving spouse, blood relative, or next of kin, who must submit documentation to establish authority. Parents or legal guardians can redeem bonds registered to a minor, particularly if the child is too young to understand the transaction. Funds received must be for the minor’s benefit, and certifications may be required.

Information and Documentation for Redemption

Gather all pertinent information and documentation before redeeming a savings bond. A physical paper bond is fundamental for paper redemptions; electronic bonds require TreasuryDirect online account access. Proof of identity, such as a government-issued photo ID (driver’s license or passport), is required. A Social Security Number (SSN) or Taxpayer Identification Number (TIN) is also essential for federal income tax reporting of accrued interest.

Beneficiaries or legal representatives must provide additional proof of authority or relationship to the deceased owner. This includes a certified death certificate for beneficiaries, or letters testamentary or letters of administration for court-appointed executors. For parents redeeming a minor’s bond, documentation like a birth certificate or legal custody papers may be required. Specific forms are necessary, depending on the redemption method and circumstances.

FS Form 1522 is commonly used for mail-in redemptions and by financial institutions not directly handling the bond. This form requires bond serial numbers, desired redemption amount, and bank account information for direct deposit. For non-administered estates of deceased owners with bond values up to $100,000, FS Form 5336 is utilized. These forms guide the submission of details for accurate processing.

Redeeming Your Savings Bonds

Once information and documentation are prepared, the redemption process can begin. Paper savings bonds can be cashed at many financial institutions, including banks and credit unions. It is advisable to contact the institution beforehand, as policies may vary regarding customer status, account tenure, or daily redemption limits. When cashing a paper bond in person, the individual will present the bond, their identification, and sign the bond in the presence of a teller.

Electronic savings bonds held in a TreasuryDirect account are redeemed online through the U.S. Treasury Department’s website. The process involves logging into the account, navigating to the “ManageDirect” section, and selecting the option to redeem securities. Users can choose to redeem all or a portion of their electronic bond, provided a minimum of $25 is redeemed and at least $25 remains in the account. The funds are then transferred via direct deposit to a linked bank account.

Paper bonds can also be redeemed by mail directly through the Treasury Retail Securities Services. This method requires completing FS Form 1522, ensuring all necessary fields are filled, and having the signature certified if the bond value exceeds $1,000. The unsigned physical bond, along with the completed and signed form, is then mailed to the address provided on the form. Processing times for redemptions can vary, with direct deposits from TreasuryDirect arriving within two business days, while mail-in requests may take several weeks. The interest earned on redeemed savings bonds is subject to federal income tax, though it is exempt from state and local income taxes. Bonds redeemed less than five years after purchase will forfeit the last three months of interest.