You can cash in a savings bond at your bank, through the Treasury Department, or by mail — the method depends on the bond's age and type

A savings bond becomes yours to use once it stops earning interest or you simply decide you need the money. The process of turning it into cash is straightforward, but the route you take depends on how old the bond is and what kind it is. Most people cash bonds at their bank, which is the fastest option if your bank holds the bond. If your bank doesn't have it, you can go directly to the U.S. Treasury Department through their website or by mail.

The key thing to know upfront: you cannot lose money by cashing in a savings bond early. The worst that happens is you forfeit some of the interest you would have earned if you'd held it longer. The bond itself — the amount you originally paid — is always there waiting for you.

Key Takeaways

  • Series EE and I bonds stop earning interest after 30 years, at which point cashing them in makes sense unless you want to keep them as keepsakes.
  • Cashing a bond before it reaches final maturity means you lose the last three months of interest, but you get back everything you paid plus all interest earned up to that point.
  • Your bank can cash the bond if it's in your name and you have the physical bond or a digital record; the Treasury Department can cash it if your bank won't.
  • You will owe federal income tax on all the interest the bond earned, but not state or local tax, and you can choose to report it all at once or spread it across years.

Cashing in a bond at your bank

If you have the physical bond certificate or a digital record of it, take it to the bank where you have an account. Bring a photo ID. The teller will verify that the bond is in your name, check its current value using Treasury Department records, and deposit the cash into your account. This usually takes a few minutes. Some banks charge a small fee for this service — typically $5 to $15 — so ask before you hand over the bond.

If your bank won't cash it (some smaller banks don't handle savings bonds), ask them for a referral or move to the Treasury Department method. Do not let a bank tell you that you have to wait until the bond matures or that you cannot cash it early — that is not true.

Cashing in a bond through the Treasury Department

You can cash a bond directly through the U.S. Treasury without going to a bank. The easiest way is through TreasuryDirect, the government's online platform. Log in with your account (or create one if you don't have it), and look for the "Manage My Securities" section. You can view all bonds held in your TreasuryDirect account and request a cash-out. The money goes to your linked bank account within a few business days.

If you have a physical bond certificate instead of a digital one, you can mail it to the Treasury Department along with a form. You will need to fill out Form PD 1239 (Request for Payment of Savings Bond) and include a copy of your ID. Mail both to the address listed on the form. Processing takes two to four weeks by mail, so use this method only if you cannot reach your bank or TreasuryDirect.

Understanding the interest penalty for early redemption

If you cash in a Series EE or Series I bond before it has been held for five years, you lose the last three months of interest. This is the only penalty — you do not lose principal. For example, if you bought a $100 bond and it has earned $15 in interest after four years, cashing it in early means you get $112 instead of $115. You keep the $100 you paid and most of the interest; you just forfeit the final quarter's earnings.

After five years, there is no penalty at all. You can cash the bond anytime and receive the full value: your original purchase price plus all interest earned to date. This is why many people hold bonds for at least five years — it removes the penalty question entirely.

Handling the taxes on your bond's interest

The interest your savings bond earned is subject to federal income tax. You will report it on your tax return for the year you cash in the bond. Savings bond interest is not subject to state or local income tax, which is one reason people use them for long-term saving.

You have a choice about when to report the interest. Most people report it all in the year they cash the bond. But if you held the bond for many years and earned a lot of interest, you can instead report the interest year by year as it accrued — this might lower your tax bill in the year you cash it. Talk to a tax professional if the bond earned more than a few hundred dollars in interest; they can tell you which approach saves you money.

Keep the bond's purchase confirmation or the receipt showing what you paid for it. When you file taxes, you will need to know the original purchase price and the total interest earned. The bank or Treasury Department will give you this information when you cash the bond.

What to do if you cannot find your bond

If you own a savings bond but cannot locate the physical certificate, you can still cash it. Log into TreasuryDirect and check whether it is registered there under your name. If it is, you can cash it through the website. If you bought the bond decades ago and it is not in TreasuryDirect, contact the Bureau of the Fiscal Service at 844-284-2676 or visit their website. They maintain records of all savings bonds ever issued and can help you locate yours.

Bring proof of identity and any paperwork you have about the bond — the purchase receipt, old statements, or anything showing the bond's series and denomination. The government can look it up by your Social Security number if needed.

Deciding whether to cash now or hold longer

Series EE bonds stop earning interest after 30 years. Series I bonds stop after 30 years as well. Once a bond stops earning interest, there is no financial reason to hold it — the money is just sitting there. At that point, cashing it in makes sense unless you want to keep it as a keepsake or for sentimental reasons.

If your bond is still earning interest and you do not need the money, holding it longer means more interest accumulates. But if you need the cash now, do not feel obligated to wait. The only real cost is the last three months of interest if you cash before five years — and even that is a small price if you need the money today.

Frequently Asked Questions

Can I cash a savings bond if someone else's name is on it?

No. A savings bond is registered to specific people, and only those people can cash it. If the bond is in your parent's name and they have passed away, you will need to go through their estate or provide a death certificate and proof that you are the beneficiary. Contact the Treasury Department for the exact steps.

What if I lost the physical bond certificate?

You can still cash it if it is registered in TreasuryDirect under your account. If you have no record of it online and cannot find the certificate, contact the Bureau of the Fiscal Service with your Social Security number and any details you remember about when you bought it. They can search their records and help you recover it.

Do I have to report the interest when I cash the bond, or can I wait until tax time?

You report the interest on your tax return for the year you cash the bond. You do not have to report it to the bank or Treasury — that is between you and the IRS. If you held the bond for many years, you may be able to report the interest spread across multiple years instead of all at once; ask a tax professional whether that helps your situation.

Can I cash a bond that is still earning interest?

Yes. You can cash a savings bond anytime after you own it, even if it is still earning interest. If you cash it before five years have passed, you lose the last three months of interest. After five years, you get the full value with no penalty.

What happens if I cash a bond and then change my mind?

Once you cash a bond, it is gone — you cannot undo the transaction. If you want to save that money, you would need to buy a new bond. Think through whether you really need the cash before you go to the bank or Treasury.