Savings Bond Redemptions Frequently Asked Questions (2024)

FAQs

When should you cash out EE savings bonds? ›

You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.

You can call the Savings Bond Processing Site at (800) 553-2663 to check on the status of a savings bond.

You can cash paper bonds at a bank or through the U.S. Department of the Treasury's TreasuryDirect website. Not all banks offer the service, and many only provide it if you are an account holder, according to a NerdWallet analysis of the 20 largest U.S. banks.

You just bought a security from the U.S. Treasury. Securities are generally issued to your account within two business days of the purchase date for savings bonds or within one week of the auction date for Bills, Notes, Bonds, FRNs, and TIPS.

If you hold savings bonds and redeem them with interest earned, that interest is subject to federal income tax and possibly federal gift taxes (highly unlikely as the per-person cap is $10,000 and the gift tax exemption is $17,000).

When you cash your bonds online, the cash generally transfers to your checking or savings account within two business days of the request.

While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.

You can report the interest each year you earn it or when you cash the bond. You will report it on Schedule B of your 1040. You can avoid these taxes by using the money for qualified higher education expenses.

Can I cash a US savings bond at my bank? ›

Banks and credit unions can redeem savings bonds over the counter.

EE bonds earn interest until the first of these events: You cash in the bond or it reaches 30 years old. Therefore, many of these bonds have stopped earning interest. If you moved your EE bond into a TreasuryDirect account, we pay you for the bond as soon as it reaches 30 years and stops earning interest.

Log into your primary TreasuryDirect® account. Click the ManageDirect_® tab at the top of the page. Under the heading Manage My Securities, click "Redeem securities". On the Redemption page, choose the button beside the security type you want to redeem and click "Submit".

The Zero-Percent Certificate of Indebtedness (Zero-Percent C of I or simply, C of I) is a Treasury security that does not earn any interest. It is intended to be used as a source of funds for purchasing traditional Treasury securities.

TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds. We also offer electronic sales and auctions of other U.S.-backed investments to the general public, financial professionals, and state and local governments.

Can I cash it in before 30 years? You can cash in (redeem) your EE bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.

It's a good idea to hang on to your bond for as long as possible, ideally until it matures, so you can take full advantage of compound and accrued interest. Here's how that decision might pay off with EE bonds. Let's say you purchased the maximum of $10,000 in EE bonds today, with the current interest rate of 2.10%.

All Series EE bonds reach final maturity 30 years from issue. Series EE savings bonds purchased from May 1995 through April 1997 increase in value every six months.