Paper savings bonds, unlike bonds purchased online, cannot be redeemed using the Treasury Direct platform. You must instead take your paper certificates to a bank or other financial institution that processes Treasury Department redemptions.
To convert paper bonds to electronic bonds, you can use the Treasury Direct SmartExchange facility. The bonds can be redeemed online once they’ve been converted to electronic form. You must wait at least one year after purchasing the bonds before redeeming them as part of bond ownership. If you redeem them in fewer than five years, you will lose three months’ interest.
Is it possible to cash paper bonds electronically?
If you want to redeem a paper E/EE or I bond, you’ll need a few items. You’ll also need confirmation of identity, such as a driver’s license from the United States. You’ll also need an FS Form 1522 that hasn’t been signed. They’ll see you sign the document and then certify your signature if you go to your local bank or credit union.
The unsigned bonds, along with the signed FS Form 1522 and, if you’re the bond’s beneficiary, accompanying legal evidence or other papers to indicate you’re entitled to cash the bond, should be sent to the US Department of Treasury at:
The same steps apply for series H or HH paper bonds, only you’ll ship the unsigned bonds to the US Treasury at:
What is the procedure for depositing a paper savings bond?
- Whether you have a local bank account and it accepts savings bonds, inquire if it will accept yours. The answer may be contingent on the length of time you’ve had an account there. If the bank will cash your check, find out if there is a monetary restriction on redemptions and what kind of identification and other documentation you’ll need.
- Send these, along with FS Form 1522, to Treasury Retail Securities Services (download or order). The bonds are not required to be signed. You’ll need to verify your identity. The instructions are on FS Form 1522, in the “Certification” section. Our address is also included in the form.
What is the procedure for converting paper bonds to electronic bonds?
When you do a SmartExchange, you exchange your paper savings bonds for electronic savings bonds kept in TreasuryDirect, an online system that allows you to access your Treasury assets at any time.
- If you don’t already have one, sign up for a TreasuryDirect account. To get started, simply fill out our simple online application.
- To create your Conversion Linked Account, click the icon. The Account Info page for that account will appear after you do so.
- Select the ManageDirect tab from the drop-down menu. A menu titled “Manage my Conversions” can be found on the ManageDirect page.
- Click the “How to Convert My Paper Bonds” link from the “Manage My Conversions” menu. This page includes step-by-step directions to help you complete the task. We recommend printing this page so you can refer to it when you’re getting started.
Gather your Series E, EE, and I savings bonds and sort them according to their titles and connectors (“OR,” “POD,” or “beneficiary”). Grouping your bonds by registration will make the process of entering the bonds you want to convert much easier.
If you need to access your Conversion Linked Account at a later time, go to your principal Account Summary page and look for “My Converted Bonds” in the account listing under “Linked Accounts Information.”
You will no longer need to keep track of paper securities once you have completed the SmartExchange.
See “Convert Your Paper Savings Bonds Using SmartExchange” for additional information and other benefits.
When cashing in savings bonds, how do I avoid paying taxes?
Cashing your EE or I bonds before maturity and using the money to pay for education is one strategy to avoid paying taxes on the bond interest. The interest will not be taxable if you follow these guidelines:
- The bonds must be redeemed to pay for tuition and fees for you, your spouse, or a dependent, such as a kid listed on your tax return, at an undergraduate, graduate, or vocational school. The bonds can also be used to purchase a computer for yourself, a spouse, or a dependent. Room and board costs aren’t eligible, and grandparents can’t use this tax advantage to aid someone who isn’t classified as a dependent, such as a granddaughter.
- The bond profits must be used to pay for educational expenses in the year when the bonds are redeemed.
- High-earners are not eligible. For joint filers with modified adjusted gross incomes of more than $124,800 (more than $83,200 for other taxpayers), the interest exclusion begins to phase out and ceases when modified AGI reaches $154,800 ($98,200 for other filers).
The amount of interest you can omit is lowered proportionally if the profits from all EE and I bonds cashed in during the year exceed the qualified education expenditures paid that year.
I don’t have a bank account, therefore how do I cash a savings bond?
If you want to cash a bond at a bank where you don’t have an account, you’ll need to present photo identification like a driver’s license or a state-issued ID card. The form of identification, as well as the number and issue date, will be noted on the bond by the bank official. A bank’s maximum amount of savings bonds it can cash for a non-customer is $1,000. The bank will not redeem a savings bond with a redemption value of more than $1,000. If the total amount of lesser bonds is less than $1,000, you can cash them all.
Is it possible to cash savings bonds that are not in your name?
When it comes time to cash in your savings bonds, as long as you have the necessary documentation, the process will be relatively simple. It’s important to keep in mind that savings bonds cannot be sold, exchanged, or given away. The only person who can cash in the bond is the person whose name is on it (with a few exceptions, which we’ll discuss shortly).
First and first, you’ll need the bond (unless it’s an electronic bond, in which case there’s no step at all). The monies are deposited into your bank account once you cash it in via the Treasury Web site). However, make certain that the bond may be cashed: It’s been at least a year since it was published (some bonds only require a six-month retention period).
Can you deposit a savings bond by mobile phone?
Because of the following reasons, electronic securities provide you with more flexibility and convenience than paper securities:
- You can cash your electronic bonds in whole or in part at any time 24 hours a day, seven days a week and have the funds deposited into a savings or checking account of your choice. You don’t need to go to a bank, and once the minimal requirements are satisfied, there are no limits on the number of bonds or their value that can be cashed at any given moment.
- At any time, you can see your online holdings and their current valuations. You don’t have to be concerned about paper securities being misplaced or destroyed.
- At any moment, you can amend the bond registration or transfer the securities to a different account. (There are some ownership restrictions, and transfers may trigger a taxable event.)
- When electronic bonds reach their full maturity and no longer generate interest, they will be immediately paid out and the proceeds put into your Primary Account’s Zero-Percent C of I. You can utilize the proceeds in full or in part to buy additional securities or cash the C of I into your bank account.