How Do You Cash in Savings Bonds?


Quick Answer

The easiest way to cash a paper U.S. savings bond is to take it to almost any bank. Contact the bank first to determine if the branch can cash the bond and what identification or documentation is required. Electronic bonds are cashed by logging in to the TreasuryDirect website and following the directions provided. Payment is credited to the bondholder's bank account within two days.

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Full Answer

A slower alternative involves mailing paper bonds to the Treasury Retail Securities Site. The bondholder provides a certified signature on the paperwork and a valid social security number when mailing the bonds.

There is a redemption limit on cashing paper bonds of $1,000 at a time. Electronic bonds have no limit. Individuals who are cashing inherited bonds have additional documentation requirements; a parent cashing a bond for a minor child needs proof that the parent has custody or lives with the child and that the child is too young to sign the paperwork for himself. Bonds have to be at least a year old before they can be cashed. If the bond is less than five years old when cashed, the bondholder forfeits three months' interest.

Bondholders are responsible for paying federal income tax on the interest received. IRS Form 1099-INT is made available by the institution, either at the time of redemption or the following January.

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