How to cash in a savings bond
Wednesday, July 7th, 2004
Categorized as: Cashing in US Savings Bonds
I'd like to cash in a savings bond. Can you you please tell me how to do so?
Tom's response
In most states, most banks, savings and loans, and similar institutions will cash savings bonds for you. The process is similar to cashing a check, but you might want to call ahead, as some financial institutions no longer offer this service.
You will be required to provide identification that matches your name on the savings bond. You will be asked to sign the back of each bond and the financial institution will certify your signature.
A savings bond has to be held at least one year before you can cash it. For example, if it was issued in November 2005, the first day you can cash it is November 1, 2006.
There's a penalty of the most recent three months of interest if you cash a savings bond before its fifth anniversary. For a bond purchased in November 2005 there would no longer be a penalty beginning November 1, 2010.
This penalty has already been deducted from the bond values our Saving Bond Calculator gives you. That is, the calculator shows a bond's redemption value, not its actual value.
If you have bonds issued in April 1997 or earlier, their value increases every six months beginning from the month of issue. So if you have a bond issued in January, it's a mistake to redeem it during December - you'll lose the interest from July through December. Try to cash these older bonds in the month they were issued or the month six months after that. Bonds issued since May 1997 increase in value each month.
Best time to cash Savings Bonds
|
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| Bond issued in | Best months to redeem | |
|---|---|---|
| Jan | Jan or Jul | |
| Feb | Feb or Aug | |
| Mar | Mar or Sep | |
| Apr | Apr or Oct | |
| May | May or Nov | |
| Jun | Jun or Dec | |
| Jul | Jul or Jan | |
| Aug | Aug or Feb | |
| Sep | Sep or Mar | |
| Oct | Oct or Apr | |
| Nov | Nov or May | |
| Dec | Dec or Jun | |
If you have a large number of bonds, see my post Redeeming 100 Savings Bonds.
If you can't find a bank who will redeem your savings bond for you, click here to find out how to send savings bonds to the Federal Reserve for redemption.
My answers to many other questions about cashing savings bonds are filed under Cashing in US Savings Bonds.
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Clear and precise information.
Hi: I had a problem cashing some IBonds at the local bank that I'd like to share with you: The bonds we have are issued to my wife and I which are in our Revocable Living Trust. The registration of the trust (and what it says on the Bonds) is as follows: (I'll of course use fake names here)…
John Smith and Mary Smith Revocable Trust dated 01-01-2003. Note that the word "and" appears between the names. Our Revocable Trust is also named the same way. I was not allowed to cash the bonds by myself, but will also have to have my wife sign them at the same time. That part is of course is not a problem as it just means another trip to the bank. The problem becomes more accute if one of us dies and the other wants to cash the bonds. The bank called the Federal Reserve to inquire about how to handle this and she was told that we both have to sign the bonds, and if one of us is deceased, the bank can't really handle it for us any longer. The bonds have to be mailed to the Federal Reserve with a signature guarantee and a copy of the Trust in order for the bonds to be cashed. Question is: All of our bonds are registered in this way and I was only cashing in part of them. Should I try and get the bonds reissued in some way, or cash them all in and forget it about it. If I should die first then my wife will have a big headache dealing with all this and I'm trying to keep things simple. Or, is there a better way to register any new bonds that wouldn't involve the requirement that we both need to sign? Thanks!
Dan - it's the word "and" in "John Smith and Mary Smith" that's requiring two signatures. If it said "or," then only one signature would be required.
But what's on the Savings Bond has to match what's on the Trust documents, so to get this fixed at this point would require changing the trust as well as the Savings Bonds.
On the other hand, the death of a spouse is never simple for the surviving spouse, no matter what you do. Should you die and your wife need to cash the bonds, she will be able to do so by providing a copy of your death certificate.
Tom Adams
Tom : when it comes to redeeming savings bonds, there ain't nothing better than a Treasury Direct account.
Thanks to your website, I finally got smart enough to convert my paper EE and I bonds into a TD account. Redeeming the bonds was done completely on-line and sent by EFT straight to my checking account within 24 hours. There's no hassling with banks and all the limitations that they impose.
You are providing a terrific education for investors here.
I have Savings Bonds in my grandchildren's names. They are minors. How do I cash them in for my grandchildren who need the money now?
Hi Brenda - as the grandparent, you can't cash these bonds, even if you put up the money. However, a custodial parent can sign for a minor child, so you can have the bonds cashed that way.
Tom Adams
My daughter wants to cash in some of here bonds, she is 16 and married lives in another state. Can she cash them herself or does she need one of her parents to cash them for her.
Hi Dennis - Many banks will allow a 16-year-old with photo ID to redeem their own Savings Bonds, but not all will. It depends entirely on the bank, so there's no way to tell what her experience will be.
Tom Adams
I am the executor of an estate. I have letters testamentary and one death certificate and about 270 E and EE bonds. I also have a 6 page excel worksheet with serial numbers, issue dates and face amounts. Do i have to copy each entry to the signature guarantee form or can I attach the excel worksheets to the submission form?
if both owners of the savings bond have died, are they still valid?
Joe - You can attach copies of the Excel worksheets. In the space on the form for listing bonds, just write "see attached".
Justin - the bonds are still valid and belong to the heirs of the person who died last. Getting the name changed involves filing a form. There are different forms depending on whether the estate is probated or not. My book has details.
Tom Adams
Tom, I have series E bonds that will soon no longer earn interest after 30 years and should be redeemed. Although the face of the bond indicates that the issue date is the "first day" of the month (and year), what is the actual day of the month (first or last calendar day or is it business day) when interest on the bond will no longer accrue? In effect, what is the appropriate day within a month to redeem a bond in its 30th year? I don't want to lose any interest in that "last" month by prematurely redeeming the bond. An example would be appreciated.
Tom,
Can you please respond to the question by Bob Anderson on Jan 4? I have a savings EE bond that matured on 1/1/08 after 30 years and need to know when to redeem it w/o missing any interest payments. Thanks.
Bob and John - the last interest payment is credited on the first business day of the month of issue.
So if the bond was purchased on any day in January 1978, you can cash it on the first business day of January 2008 and get the full amount of interest.
Tom Adams
Tom: Do you have to be 18 to cash a bond? My son (17) cashed in his (without my knowing) and I have received tax information for these bonds that was reported to the IRS .I was surprised he was able to cash them in since he is a minor. He did not work last year so has no income to claim. Do we need to file a tax return for these bonds that he foolishly cashed in? Thank you.
Mary - there is no age limit to cashing a Savings Bond. Whether your son needs to file a tax return or not depends on whether his total unearned income (Savings Bond interest and other investment income) is more or less than $850. IRS Publication 17 has the details on pages 5 to 8.
Tom Adams
what form(s) of ID are required when redeeming bonds?
H - each bank sets its own ID policies, so you'll have to call ahead and ask. But typically if you have an account at the bank it requires no more than one photo ID.
Tom Adams
How much do the banks charge for cashing in I Series Savings Bonds? Does the Federal Reserve give them guidelines in how much they can charge?
M. Kring - yes, the Treasury gives banks clear and precise guidelines on how much they can charge - nothing. The Treasury is already paying them; they aren't supposed to charge you, too.
If a bank charges you a fee to redeem Savings Bonds, use the link on this page to contact the Treasury and report the bank and the amount to them. Ask to be reimbursed.
Tom Adams
My son signed the back of his savings bonds and I took them to our credit union for redemption. I thought the 1099 would go to my son, but the credit union sent it to me and insists that this is correct since I am the one that brought them to the credit union. They asked me to sign a form which I thought was a receipt for the bonds, but it turns out that this is what they used to prepare the 1099. They insist that the interest be reported by me…what can I do?
Hi Luanne - Unless you son's bonds were worth a lot of money, the cheapest thing to do is probably to just pay the tax. If the tax amount is so high it's worth avoiding it, consult your tax advisor or my book; the pertinent information concerns "nominee distributions." But it's complicated and only works if legally your son owes the tax, not you. See this post for more information.
Tom Adam
my dad has a couple of matured savings bonds that he wants to sign over, one each to each one of my sons. how do we go about doing that?
thanks.
— tom shymanski
Hi Tom - that's not possible. He has to cash the bonds, hold back what he needs for taxes, and give your sons the remaining money.
Tom Adams