Where to Cash Savings Bonds: Your Guide to Redeeming EE & I Bonds

Savings bonds are a safe and reliable investment, often purchased for oneself or as gifts. When the time comes to access your funds, understanding Where To Cash Savings Bonds is essential. This guide will walk you through the process of redeeming your Series EE and Series I savings bonds, ensuring you get your money efficiently and securely.

Cashing Paper Savings Bonds: Your Options

If you hold traditional paper savings bonds, you have a couple of primary avenues for cashing them in.

Cashing Paper Bonds at a Local Bank or Credit Union

For many, the most convenient option is to cash paper savings bonds at a local bank or credit union.

How to do it:

1. Contact Your Bank First: Not all banks cash savings bonds, and policies can vary. Call your local branch to ask:

   • Do you cash savings bonds?
   • Is there a limit on the value of bonds you will cash at one time?
   • What forms of identification are required?
   • Do I need to be an account holder to cash a bond here? (Some banks may require you to be a customer).

2. Gather Necessary Documents: Typically, you’ll need a valid photo ID, such as a driver’s license or passport. If you are not a bank customer, they may have stricter requirements.

3. Visit the Bank: Take your paper savings bonds and required identification to the bank during business hours.

Important Considerations for Banks:

• Convenience: Banks offer immediate access to your cash.
• Varying Policies: Each bank sets its own limits and requirements for cashing bonds.
• 1099-INT Form: The bank is responsible for providing you with a 1099-INT form for tax purposes, which you’ll need to report the interest earned on your savings bonds when filing your taxes. They may provide it at the time of cashing or mail it to you by the following January.

Cashing Paper Bonds Directly Through the U.S. Department of the Treasury

You can also cash your paper savings bonds directly through the Treasury Department, especially useful for larger amounts or if your bank doesn’t offer this service.

How to do it:

1. Complete FS Form 1522: Download and fill out FS Form 1522, “Request for Payment of United States Savings Bonds.” This form is available on the TreasuryDirect website.

2. Signature Certification (Potentially Required): If the total value of the bonds you are cashing exceeds $1,000, you will likely need to have your signature certified by an authorized certifying officer. FS Form 1522 provides details on signature requirements and who can certify your signature.

3. Mail Form and Bonds: Send the completed FS Form 1522 and your original paper savings bonds to the address specified on the form:

   Treasury Retail Securities Services
   P.O. Box 9150
   Minneapolis, MN 55480-9150

Important Considerations for Cashing Through the Treasury:

• No Cash Limits: There is no limit on the value or number of bonds you can cash at once, provided they meet the requirements.
• Signature Certification: For larger amounts, the signature certification is an extra step to ensure security.
• 1099-INT Form: The Treasury will mail you the 1099-INT form the following January.
• Processing Time: Cashing bonds through mail will take longer than at a bank.

Cashing Electronic Savings Bonds: TreasuryDirect is Key

Electronic savings bonds, purchased through TreasuryDirect, are redeemed directly through your TreasuryDirect account.

How to do it:

1. Log into Your TreasuryDirect Account: Access your account at TreasuryDirect.gov.

2. Navigate to ManageDirect: Once logged in, go to the “ManageDirect” section.

3. Redeem Securities: Under “Manage My Securities,” click on “Redeem securities.”

4. Follow the Prompts: The system will guide you through the redemption process. You can choose which bonds to redeem and where to deposit the funds (typically your linked bank account).

Important Considerations for Electronic Bonds:

• TreasuryDirect Account Required: You must have a TreasuryDirect account to manage and cash electronic bonds.
• Minimum Redemption: You can redeem any amount of $25 or more, down to the penny.
• Partial Redemption Allowed: You can cash part of a bond’s value, leaving the rest to continue earning interest, as long as you leave at least $25 in the bond.
• 1099-INT Form: Your 1099-INT form will be available in your TreasuryDirect account the following January.

Key Factors to Consider When Cashing Savings Bonds

Before you decide where to cash your savings bonds, keep these points in mind:

• Minimum Holding Period: You must hold a savings bond for at least one year before you can cash it.
• Interest Penalty: If you cash a bond before it’s five years old, you will lose the last three months of interest. Therefore, it’s generally beneficial to hold bonds for at least 5 years to maximize returns.
• Bond Value: Use the Savings Bond Calculator on TreasuryDirect to determine the current value of your bonds before cashing them. This helps you understand exactly how much you will receive.
• Full vs. Partial Redemption: Paper bonds must be cashed for their full value. Electronic bonds offer the flexibility of partial redemption (above $25).
• Lost or Stolen Bonds: If your paper bonds are lost or stolen, you need to report it immediately to TreasuryDirect and follow their procedures for replacement, which is different from cashing.

Tax Implications of Cashing Savings Bonds

Interest earned on savings bonds is subject to federal income tax, but it is exempt from state and local taxes.

• 1099-INT Form: Whether you cash your bonds at a bank or through TreasuryDirect, you will receive a 1099-INT form detailing the interest earned, which is reported to the IRS.
• Tax Year Reporting: You report the interest in the tax year in which you cash the bonds.
• Education Tax Benefits: In some cases, you may be able to exclude savings bond interest from your income if used for qualified higher education expenses. Consult IRS Publication 970, Tax Benefits for Education, for details.

Understanding where to cash savings bonds and the associated processes ensures you can access your invested funds smoothly and make informed decisions about your savings. Whether you choose the convenience of a local bank for paper bonds or the direct online access for electronic bonds through TreasuryDirect, knowing your options empowers you to manage your savings effectively.