Financial institutions now have the option to not cash savings bonds for both non-customers or new customers. Our Secret Service partners recommend that a customer be established for 12 months before cashing bonds at a financial institution. Where prior guidance directed financial institutions to cash bonds in both situations, the updated guide leaves this choice up to the financial institution.
Please direct your customers to TreasuryDirect.gov for information about how to cash their bonds. As always, you can direct any customer or non-customer with questions directly to the Treasury via email. Refer to The Guide to Cashing Savings Bonds (Off-site, PDF) for details.
FAQs
You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
How do I avoid taxes when cashing in savings bonds? ›
You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.
How long does it take to get savings bonds redeemed? ›
When you cash your bonds online, the cash generally transfers to your checking or savings account within two business days of the request.
Is there a penalty for not cashing in matured EE savings bonds? ›
While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.
When can an I bond be redeemed without penalty? ›
However, if a bond is cashed within the first five years after its issue date, interest earned during the three months prior to cashing will be forfeited. Once a Series I bond is five years old, there is no interest penalty for redemption.
What day of the month to redeem I bonds? ›
Your own personal rate of return will depend on both when you purchased the I Bond, and when you cash out. Keep in mind that you don't earn interest on your I Bonds until you complete the month, so cash out early in the month.
Do I have to pay taxes on savings bonds I cashed in? ›
In general, you must report the interest in income in the taxable year in which you redeemed the bonds to the extent you did not include the interest in income in a prior taxable year.
What is the best way to cash in savings bonds? ›
Paper savings bonds
If you mail in the bond for redemption, the funds will be deposited into the checking or savings account you designated on the redemption form. If you take your savings bonds to a bank, you'll receive the cash value for each bond. However, banks may limit how much they will cash at a time.
Will I get a 1099 for cashing in savings bonds? ›
If you cash a paper savings bond at a local bank, that bank is responsible for giving you a 1099. If you cash a paper savings bond by mailing it to Treasury Retail Securities Services, we mail you a 1099 by January 31 of the following year. (You can call us for a duplicate statement, if needed, beginning February 15.)
How do you tell if a bond has been redeemed? ›
If the bond is redeemed by the Treasury Retail Securities Site, they are responsible for issuing the 1099-INT. The 1099s are issued in the year following the redemption, please allow time for the 1099-INT to be mailed to you. If the 1099-INT was not received your, please call 1-844-284-2676 to request a duplicate.
How to get the most value from your savings bonds
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
You can call the Savings Bond Processing Site at (800) 553-2663 to check on the status of a savings bond.
How much tax do you pay on a savings bond? ›
Savings bond interest is exempt from state and local income tax. Savings bond interest is subject to federal income tax; however, taxation can be deferred until redemption, final maturity, or other taxable disposition, whichever occurs first.
What happens to uncashed savings bonds? ›
For those fully matured bonds remaining unredeemed, there is no active program by the Bureau to locate the bondholders and pay them the proceeds to which they are entitled. Traditionally, it has been up to the registered owner to remember to redeem the matured bond decades after the initial purchase.
When you receive a savings bond worth $100, you can cash it for $100 right away. True or false? ›
The correct answer is False. Explanation: A savings bond is a bond that offers a fixed interest rate that applies for a specified period, so it cannot be collected before that time is up.
What is the downside of an I bond? ›
You're locked in for the first year, unable to sell at all. Even after that, there's a penalty of three months' interest if you sell before five years. So if you think you'll need any of the money before that, I bonds may not be for you.
Do you pay taxes when you redeem I bonds? ›
For those who bought I bonds for the first time or just need a quick reminder, know this: All that interest income is taxable as regular income. If you cashed in, you need to report the interest on your tax return even if finding a 1099 for I bonds is more complicated than other investments.
Can I buy $10,000 I bond every year? ›
That said, there is a $10,000 limit each year for purchasing them. There are several ways around this limit, though, including using your tax refund, having your spouse purchase bonds as well and using a separate legal entity like a trust.
How to cash out an I bond? ›
You can do this in a couple of ways: Cash out the bond at your local bank or via TreasuryDirect. You'll need to call your local bank to see if they cash out I bonds and their requirements for doing so. With TreasuryDirect, you can redeem your bonds in a few short steps: Do not sign the bonds.
