Cashing In Series E, EE, I Savings Bonds

Last Updated: February 26, 2019 | by Jackie Brahney | reviewed by Jack Quinn

What Are Your US Savings Bonds Worth and how do you redeem them?

Do you know what interest rate your bonds are paying? If you are thinking about cashing in and re-investing, be certain that you know the current and lifetime interest rates they are paying. Also, be aware of the next interest posting date – you don’t want to forfeit up to six months worth of interest. Don’t assume an older bond is worth more than a newer bond. Value your bonds with our Savings Bond Calculator.


Requirements for Redeeming a US Savings Bond

Most financial institutions (banks, credit unions, etc) will cash-in (aka redeem) your bonds. However, it is a good idea to call them before showing up with your bonds.

  • The bond must be at least 12 months old.
  • You must be the owner, the co-owner or the entitled individual. An entitled invidual is a person with Power of Attorney or is the Legal Guardian of a bond owner. If the owner(s) of a bond have died, the bond goes to the POD(Pay On Death)/Beneficiary on the bond. If none is listed, the bond is returned to the owner’s estate.
  • If you are the beneficiary, you must show proof that you are entitled to cash the bond (bring a death certificate).
  • Parents or Guardians can cash in a bond for their child by bringing identification such as a birth certificate (or other such identification materials).
  • If you are not the owner, co-owner or beneficiary, your bonds may have to be sent to a Federal Reserve Bank which could delay getting cash.
  • Note: You can no longer walk into a Federal Reserve Bank for service. Transactions are done electronically or by mail.

What if your Bank or Financial Institution will not redeem your Savings Bonds

You should then contact the Federal Reserve Bank for your local area for more information.

Early Cash-in Penalties

Bonds less than 1 year old cannot be cashed in – UNLESS the US Government declares a Federal Disaster area in your county. Only then is the early cash-in of savings bonds permitted. The 3-month interest penalty of cashing before a bond is 5 years old (below) still applies.

If you cash-in bonds purchased in May 1997 or after before the bond is 5 years old, you will forfeit three months worth of interest.


Primary and Co-Owner Cashing In

The primary owner and co-owner listed on a bond have equal rights to a savings bond. A Co-owner CAN cash in a savings bond WITHOUT the consent of the Owner of a bond, and vice versa. Be careful who you list as your co-owner on your bonds and always keep them in a safe, secure location. When a bond is cashed, it is generally accepted that the individual cashing the savings bond is the individual responsible for the interest reporting on that year’s taxes for the revenue accrued for the bonds. A 1099-INT is issued by the financial institution for those bonds to that individual at tax time.

Identifying yourself to the Financial Institution

If you do not have an existing “active” account with a bank or financial institution, you can go to any “paying agent” or financial institution that handles U.S. savings bonds (check your local bank listings) to cash it in. They may redeem your bonds, but with limitations. You must present a valid Federal or State issued form of identification (example: driver’s license, valid passport) and you may only be permitted to redeem up to $1,000 worth of bonds at one time. To avoid any confusion or frustration, always contact your financial institution FIRST before attempting to cash in your bonds. Find out what documents and identification they require. Try to set up an appointment. Don’t assume that you will get your cash right away. Bank/Financial Institutions may be busy at the time, and not able to process your transactions right away. They may ask you to leave your bonds and come back at another time.

When you cash in a bond (or savings notes), the bank or financial institution will issue an IRS form 1099-INT on the interest earned. This information is also reported to the IRS. The 1099-INT form may be issued either at the time you cashed in the bond, or it may be mailed to you right after the year end in which you cashed the bond. Make certain you keep your 1099-INT form with your taxes. You don’t want to be penalized by not reporting the interest earned. The interest earned is considered income by the government. Reporting Taxes – Receipt of 1099-INT Forms


Double Taxation of Savings Bond Income

When a bond is cashed in, a 1099-INT form is issued by the bank or financial institution to the person who is cashing in the bond. IF YOU ELECTED TO REPORT THE INTEREST INCOME EACH YEAR, WHEN YOU CASH IN THE BOND, THE 1099-INT WILL NOT BE REDUCED BY THE TOTAL AMOUNT OF INCOME YOU REPORTED IN THE PRIOR YEARS. It is the responsibility of the Bond Holder to keep track of this information and properly report it when the time comes.

Below are scenarios in which double taxation may occur:

  • The primary bond owner may have been reporting the interest income every year, and you are the co-owner. When you cash in the bond, a 1099 will be issued for the total amount of the interest income (the difference of the purchase price of the bond, and the cash in amount), even though the primary owner may have been reporting the interest income for years.
  • If you received a bond from a decedent, and the decedent had reported the interest income every year-prior to his or her death-the 1099 you receive will not be reduced by the income reported by the decedent.
Advertisement Tip:

If you know you are a co-owner or a beneficiary on savings bonds, be certain to discuss any income reporting that may be taking place on the bonds that could come your way. Keep a detailed list and copies of the 1040 Federal Tax returns (and schedule B) that the person may have included as income. You may also be entitled to a federal tax refund if the interest income had been reported & taxed in the decedent’s tax return or taxed as part of the estate.

Created on: February 25, 2019

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Jackie Brahney

Marketing & Editorial Director at
Jackie Brahney is the Marketing and Editorial Director and most notably, an U.S. Savings Bond Expert for Since 1991, she has done extensive research on savings bonds and state of the art savings bond valuation systems, and heads the company's public relations and marketing initiatives.
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