- 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.
Paper bonds
Your bank or credit union should be able to cash in your paper savings bonds. If you’re going to a financial institution where you’re not a member or customer, check to see if they’ll cash your bond before you go.
Confirm what documents you’ll need to bring with you by contacting the bank. Here’s what you should bring with you in general.
It’s important to remember that bonds can’t be cashed by just anyone. Savings bonds can only be cashed by the bond owner or co-owner, which includes “survivors,” or those identified on the bond who received ownership after the original owner died. You are not the registered owner (a savings bond is nontransferable) and cannot cash in the bond if you purchased it through an auction site like eBay.
If the child is too young to sign the payment request and the child lives with the parent — or the parent has legal custody of the child — the parent may cash in the child’s savings bond.
Anyone else who wants to cash in a bond must show proof of legal authority to do so.
You’ll sign each bond and receive the cash value at the bank. The bank will either hand you a 1099 tax form or mail it to you before the end of the tax year after you’ve cashed in your bond.
Paper bonds can also be redeemed through the mail. To cash in by mail, obtain an FS Form 1522 from the US Department of Treasury, have your signature certified, then mail the form to the address shown on the form.
Electronic bonds
By connecting into your TreasuryDirect account and setting up a direct payment to your bank or savings account, you can cash in your electronic bonds. Within two business days, the cash amount may be credited to your bank account.
Is it possible to cash in savings bonds anywhere?
The best place to start redeeming your savings bond is the same place where you have a checking account. Customers who have had a checking or savings account with Bank of America for at least six months can quickly cash in their savings bonds. According to the Treasury Department, over 95% of these bonds are redeemed at banks and credit unions.
If you have trouble cashing it in at your bank, you can redeem it directly through the Treasury Department by downloading form 1522, having your signature certified, and submitting your unsigned bonds to:
Is it possible for a bank to refuse to redeem a savings bond?
Bring your bond to your bank, but not any bank. It has to be an account that you’ve owned for at least six months. If that isn’t possible, you can use a government-issued photo ID to prove your identification. The most prevalent form of identification is a driver’s license. If you need identification like a driver’s license to prove your identity, you’ll only be able to cash $1,000 in savings bonds. After that, you’ll need to sign a payment request form in front of a bank representative, confirm your social security number, and validate your current address.
As long as the child is too young to sign his or her name, a parent or guardian of a child who is the holder of a savings bond can redeem the bond.
If the bond’s original owner has passed away but the bond’s beneficiary has been named, the beneficiary can redeem the bond. Finally, a person with legal capacity to conduct business on behalf of the bond bearer can redeem the bond in particular instances. This is usually someone acting on behalf of the estate of a deceased person.
A bank may refuse to issue payment for a bond in certain situations, or may even be legally unable to do so. In these instances, the bearer may be required to redeem the bond at a Federal Reserve Bank Savings Bond Processing Site. The Treasury Department’s TreasuryDirect Web site lists the locations of these facilities.
What is the value of a $100 savings bond?
You will be required to pay half of the bond’s face value. For example, a $100 bond will cost you $50. Once you have the bond, you may decide how long you want to keep it for—anywhere from one to thirty years. You’ll have to wait until the bond matures to earn the full return of twice your initial investment (plus interest). While you can cash in a bond earlier, your return will be determined by the bond’s maturation schedule, which will increase over time.
The Treasury guarantees that Series EE savings bonds will achieve face value in 20 years, but Series I savings bonds have no such guarantee. Keep in mind that both attain their full potential value after 30 years.
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.
Is it possible to cash a savings bond at Walmart?
As of 2022, Walmart does not cash savings bonds. Instead, you can cash a paper savings bond at a local bank or credit union. The TreasuryDirect interface can be used to cash electronic bonds. A savings bond can only be cashed after one year of ownership.
When will I be able to sell my bonds?
Bonds are income-producing investments that can be bought and sold freely on the open market. This distinguishes them from other assets, such as bank certificates of deposit, which carry a penalty if sold prematurely. Although you can sell a bond whenever you find a suitable buyer, many bondholders choose to wait until the bond matures before selling it. Although there is no penalty for selling a bond before its maturity date, there may be charges associated with doing so.
When you cash in your savings bonds, do you have to pay taxes?
Taxes can be paid when the bond is cashed in, when the bond matures, or when the bond is relinquished to another owner. They could also pay the taxes annually as interest accumulates. 1 The majority of bond owners choose to postpone paying taxes until the bond is redeemed.