How to cash savings bonds

Paper vs electronic, banks vs mailing Treasury, and what the tax form will say - the official process, step by step.

• Paper EE and I bonds can be cashed at banks that offer the service, or mailed to Treasury with FS Form 1522 (TreasuryDirect).
• Electronic bonds are cashed in a TreasuryDirect account (ManageDirect → Redeem securities); minimum $25 (TreasuryDirect).
• If the bonds are worth more than $1,000, FS Form 1522 requires a certified signature (TreasuryDirect).
• Savings bond interest is subject to federal income tax but exempt from state and local income tax (TreasuryDirect).
• You get a Form 1099-INT for the year you cash the bond - from the bank that paid it or in your TreasuryDirect account (TreasuryDirect).

Paper bonds

Option 1 - a bank where you have an account

Many banks and credit unions cash savings bonds for their own customers. TreasuryDirect's advice is to ask three things first: whether they cash savings bonds at all, how much they will cash at one time, and what identification they require (TreasuryDirect: cashing a bond). Banks are not required to offer this, and policies vary.

Option 2 - mail them to Treasury (FS Form 1522)

1. Download FS Form 1522 and fill it out.
2. If the total value is over $1,000, have your signature certified as the form instructs.
3. Mail the form and the bonds to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150. Treasury pays by direct deposit (TreasuryDirect, TreasuryDirect).

This is also the route for old-series bonds (E, H, and earlier) that banks often will not handle, and for special situations - cashing from outside the US, bonds of a young child, trusts, or an inherited bond (details).

Electronic bonds

Log in to TreasuryDirect → ManageDirect → Redeem securities. You can cash any amount of $25 or more (leaving at least $25 if you cash part of a bond), and the money goes to your linked bank account. Electronic bonds that reach final maturity are redeemed automatically (TreasuryDirect, TreasuryDirect).

Worth checking before you cash

• What is it worth? Look up the official redemption value in the value tables before you go - banks pay exactly the published figure.
• Is it still earning? A bond short of final maturity keeps growing; one past final maturity earns nothing by waiting. Check the status and see EE maturity dates.
• EE and I bonds cashed before 5 years forfeit the last 3 months of interest; they cannot be cashed at all in the first 12 months (TreasuryDirect, TreasuryDirect).

Taxes, briefly

Interest is federally taxable and exempt from state and local income tax; you receive a 1099-INT for the year you cash the bond or it matures, whichever comes first. Interest may be excludable when the money pays for qualified higher education. The full rules - deferred vs annual reporting, the maturity tax trap, and the education exclusion income limits - are on how savings bonds are taxed.