How To Cash A Savings Bond


Savings bonds are secure investment tools issued by the U.S. government. They offer a way for individuals to lend money to the government and earn interest over time. This guide delves into the different types of savings bonds, their pros and cons, and how they compare to traditional savings accounts.

Sometimes, you want an ultra-low risk way to save money; enter savings bonds. Savings bonds have been a staple in the investment portfolios of many Americans for decades. They provide a low-risk way to earn interest on your money while supporting government projects. They are backed by the full faith and sovereignty of the United States government. This means that barring something crazy, they are virtually guaranteed. Whether you’re a seasoned investor or just starting out, understanding the nuances of savings bonds can help you make informed financial decisions. And how exactly do you cash in savings bonds?


How savings bonds work

Savings bonds accrue interest over time, but the interest isn’t paid out until redemption. They can’t be resold and are redeemable directly with the government or through certain financial institutions, such as a bank or credit union. They can be purchased online through the TreasuryDirect website. Many financial advisors might instruct their clients to have part of their money as savings bonds, as a virtually guaranteed return (as long as the US stays solvent!) Most savings bonds are electronic bonds nowadays since the Treasury Department ceased the sale of all paper bonds in 2012 with the exception of Series I bonds.

Where to cash the savings bond

At a Bank:

  1. Contact your bank to find out if they will cash your savings bonds.
  2. Determine how much they will cash at one time.
  3. Understand what identification or other documents you need.


With TreasuryDirect:

  1. Obtain FS Form 1522.
  2. Fill out the form.
  3. If the value of the bond(s) you are cashing is more than $1,000, you must have your signature certified. Check FS Form 1522 for more details about signature requirements.
  4. Send the form and the bonds to the address provided on FS Form 1522.

Looking to invest in savings bonds and more? Try these brokerages

Example of savings bond

Say you buy a savings bond and hold it for 10 years at a 5% annual interest rate. Below is what you would be looking at return-wise.

Year Beginning Balance Interest Earned Ending Balance
1 $1,000.00 $50.00 $1,050.00
2 $1,050.00 $52.50 $1,102.50
3 $1,102.50 $55.13 $1,157.63
4 $1,157.63 $57.88 $1,215.51
5 $1,215.51 $60.78 $1,276.29
6 $1,276.29 $63.81 $1,340.10
7 $1,340.10 $67.01 $1,407.11
8 $1,407.11 $70.36 $1,477.47
9 $1,477.47 $73.87 $1,551.34
10 $1,551.34 $77.57 $1,628.91

Different types of savings bonds

Series E Bonds

Originally issued during World War II to support government funding, these bonds were available until 1980. They have since been replaced by Series EE bonds. Their popularity grew due to their patriotic appeal and the financial security they offered to investors.

Series EE Bonds

Introduced in 1980, these bonds offer variable rates for bonds issued between May 1997 and April 2005. Bonds issued after May 2005 have a fixed rate. These bonds are often favored for their predictable returns and are commonly gifted to young beneficiaries for future financial needs. Series EE savings bonds are a long-term investment — you need to hold it for 20 years to get the guaranteed doubling in value. While you can cash them in after 12 months, you’ll lose several months’ interest if you cash them in before the five-year mark. Matt Mizculski, CEO

Series I Bonds

These bonds provide protection against inflation. They combine a guaranteed fixed rate with a variable inflation rate, adjusted biannually based on the consumer price index. This dual-rate structure ensures that the bond’s value keeps pace with changing economic conditions, making it a resilient investment choice.

How to obtain paper savings bonds

Treasury bonds are now all electronic with one exception. Series I savings bonds remain a last holdout to the trend of digitalization. They can be obtained with a portion or all of a tax refund by using IRS Form 8888. This allows taxpayers to purchase paper Series I bonds with their tax refunds, providing a tangible option for those who prefer a physical bond or are looking to gift the bond to someone else. The availability of paper Series I bonds through tax refunds is a unique feature that maintains a link to the traditional practice of holding physical savings bonds.

How to cash in a savings bond

Before you try to cash the savings bond

  1. Verify the Bond’s Authenticity and Eligibility: Ensure that each bond is genuine and can be redeemed.
  2. Determine Entitlement: Confirm that the person cashing the bond is entitled to do so.
  3. Determine Redemption Value: Find out the bond’s redemption value.
  4. Verify Customer’s Identity: Ensure you can verify the identity of the person cashing the bond.
  5. Provide Identification Documents: Have the necessary documents ready for identification.

Pro Tip

Treasury Inflation Protected Securities, commonly known as TIPS, are a unique type of U.S. Treasury debt designed to protect investors from inflation. Unlike traditional bonds, the principal value of TIPS adjusts based on the consumer price index, ensuring that your investment’s purchasing power remains intact. Moreover, while the interest rate remains constant, the interest payments you receive are based on the adjusted principal, effectively increasing with inflation. This makes TIPS an attractive hedge against inflation, especially for conservative or income-focused investors. Always consider TIPS as a potential tool in your investment strategy to combat inflation.

Traditional bonds vs. savings bonds

Traditional bonds are promissory notes that anyone, including governments and companies, can issue. These bonds will usually pay interest at intervals. Savings bonds, on the other hand, only pay interest when the bond is redeemed in full. There are other differences as well.

Feature/Aspect Traditional Bond Savings Bond
Definition A debt instrument where the issuer owes the bondholder a debt and is obligated to pay them interest and/or repay the principal at a later date. A non-marketable U.S. government savings bond that grows in value over time.
Issuer Can be issued by corporations, municipalities, or government entities. Issued by the U.S. Department of the Treasury.
Interest Income Typically paid twice a year until the bond matures. Rates can be fixed or floating. Earns interest over time, often compounded semiannually.
Liquidity Can be sold before maturity, but finding a buyer might be challenging for some bonds. Some may require a penalty for cashing out early. Can be cashed after a certain period, but cashing in early might result in loss of some interest.
Taxes Interest is subject to income tax; capital gains are subject to capital gains tax. Interest is subject to federal income tax but exempt from state and local taxes.
Risks Includes credit risk, interest rate risk, liquidity risk, inflation risk, and call risk. Primarily inflation risk, as the buying power might decrease over time.
Rate of Return Can vary based on the type of bond and its issuer’s credit quality. Typically lower than traditional bonds but offers safety and security.
Purchase Method Can be purchased through banks, brokers, or directly from the issuer. U.S. savings bonds, such as Series EE or Series I, can only be purchased directly from the U.S. government.

Compliments to savings bonds:

Obviously, you aren’t going to keep all of your money in one savings bond. You should think of investing along with other complimentary assets, according to Sammi Elliard-King, the founder of Up The Gains.

To complement a savings bond, consider diversifying your investment portfolio. Stocks and mutual funds can offer higher returns over the long term but come with higher risk. If you prefer a more conservative approach,  Look into Certificates of Deposit (CDs) or Treasury Inflation-Protected Securities (TIPS) for stability.

Roberto Liccardo, of, and an expert in investment prefers mutual funds. “Mutual funds are an excellent choice as they combine capital from various investors to create a diversified portfolio that includes a mix of stocks, bonds, or other asset classes. They provide diversification and professional management, which can be beneficial for those looking to balance risk.”


What is the easiest way to cash savings bonds?

The easiest way to cash savings bonds is to visit a local bank or financial institution. Most banks will cash Series E, Series EE, and Series I savings bonds. If you’re a customer of the bank, the process is straightforward. If you’re not a customer, some banks might require additional documentation. You can also redeem them electronically through

How much is a $50 savings bond worth now?

The value of a $50 savings bond depends on its type, issue date, and the interest rate it has accrued. For instance, Series EE bonds are guaranteed to be worth at least double their purchase price when they reach 20 years. The exact value can be determined using the U.S. Department of the Treasury’s online.

What documents do I need to cash a savings bond?

To cash a savings bond, you typically need proof of identity, such as a valid driver’s license or passport. If the bond is not in your name, additional documentation proving your entitlement to the bond may be required.

How long should you wait to cash in a savings bond?

While savings bonds can be cashed in after one year of issuance, it’s recommended to hold them for at least five years to avoid any penalties. If you redeem them before five years, you’ll lose the last three months’ worth of interest.

Do banks still cash savings bonds?

Yes, most banks and financial institutions still cash savings bonds, especially Series E, Series EE, and Series I bonds. It’s advisable to check with your local bank to confirm if they offer this service.

Can I cash a savings bond at any bank?

While many banks will cash savings bonds, especially for their customers, not all banks offer this service. Some banks may also have restrictions or requirements for non-customers. It’s best to check with the specific bank beforehand.

View Article Sources
  1. Understanding Bond Serial Numbers – SuperMoney
  2. Topics on Bond Investing – SuperMoney
  3. Encyclopedia: Bearer Bonds – SuperMoney
  4. CDs vs Bonds: Which is Better? – SuperMoney
  5. Alternatives to Savings Accounts – SuperMoney
  6. Encyclopedia: Par Value – SuperMoney
  7. U.S. Department of the Treasury – Savings Bonds – TreasuryDirect
  8. U.S. Department of the Treasury – EE Bonds – TreasuryDirect