Carina Boucher | Citizens Staff
Key takeaways
- Savings bonds are a government-backed, reliable investment that earn interest, reaching full maturity after 30 years.
- The different types of savings bonds are E/EE, I, and H/HH. Only E/EE and I bonds are still sold, but all types are able to be redeemed through the Federal Reserve.
- Cashing in savings bonds is easier than you think!
What are savings bonds?
U.S. savings bonds are a government-backed, reliable investment available in denominations ranging from $25 to $10,000. Bonds issued after April 2005 have a fixed interest rate, and older bonds (1997-2005) have a variable interest rate.
Anyone who’s 18 or older with a valid Social Security number, U.S. bank account, and U.S. address can purchase savings bonds. They’re available to be cashed in after a single year, though there’s a penalty for cashing them in within the first five years. Otherwise, you can keep savings bonds until they fully mature, which is generally 30 years. These days, you can only purchase electronic bonds, but you can still cash in paper bonds.
There are a few types of bonds you may have: Series E/EE, Series I, or Series H/HH. A series E/EE bond earns a fixed rate of interest for up to 30 years. A Series I bond earns interest based on combining a fixed rate and an inflation rate. Series H/HH bonds are a little different — you pay face value and receive interest payments by direct deposit to your checking or savings account every six months until maturity or redemption.
Only series EE and I bonds are still issued, but that doesn’t mean that you can’t cash in other types of bonds that you may have. For instance, if you have an H bond, it's no longer earning interest because it’s fully mature and is a primary candidate for redemption. HH bonds and I bonds may still be earning interest based on the issue date.
When is the right time to cash in my savings bonds?
Most savings bonds stop earning interest (or reach maturity) between 20 to 30 years. It’s possible to redeem a savings bond as soon as one year after it's purchased, but it’s usually wise to wait at least five years so you don’t lose the last three months of interest when you cash it in. For example, if you redeem a bond after 24 months, you’ll only receive 21 months of interest. Depending on the interest rate of your bond and your own financial needs, it’s generally beneficial to wait until full maturity to redeem them.
How much are my savings bonds worth?
To determine the value of your E, EE, or I bond, you can use a savings bond calculator. The calculator will have you enter the series, denomination, bond serial number, and issue date. This tool not only helps you calculate the value of your bond; it stores the information you enter so you can view it again at a later date.
To see how much your electronic series EE or I savings bond is worth, you can log directly into your TreasuryDirect account and click the “Current Holdings” tab in your account.
How do I redeem my savings bonds?
Ready to redeem your savings bond?
If you have a paper E/EE or I bond, you’ll need to take a few additional steps. In addition to the bonds, you’ll need to provide proof of identity, like a United States driver’s license, and partner with a notary to notarize and certify your signature on an unsigned FS Form 1522 to your local bank or credit union.
After completing the steps listed above, you can then send the unsigned bonds along with the signed FS Form 1522 and, if you’re the beneficiary of the bonds, supporting legal evidence or other documentation to show you’re entitled to cash the bond to the U.S. Department of the Treasury at:
Treasury Retail Securities Services,
PO Box 214
Minneapolis, MN 55480-0214
Note: When cashing in a paper bond, they must be cashed in full.
If you’re cashing in an electronic savings bond, log in to your TreasuryDirect account and use the link for cashing securities in ManageDirect. You’ll be able to cash a minimum of $25, or any amount above that in one-cent increments. When you cash your bonds online, the cash generally transfers to your checking or savings account within two business days of the request.
For series H or HH paper bonds, the same steps apply, but you’ll mail the unsigned bonds to the U.S. Treasury at:
Treasury Retail Securities Services,
PO Box 2186
Minneapolis, MN 55480-0214
Ready to make the most of your savings bonds?
From making a major purchase to pay for a wedding or paying down debt, there are many reasons you may want to cash in savings bonds. If your savings bond is fully mature but you wish to continue to grow your savings, a certificate of deposit (CD) or money market account may be an option to deposit the funds. A CD is a federally insured savings account with a fixed interest rate and fixed date of withdrawal. You can choose the term length that’s best for you — whether it’s as short as a few weeks or as long as a decade. A money market account is a savings account that allows a limited number of checks to be drawn from the account each month, and usually earns a higher rate of interest than a regular savings account.
Savings bonds are a great, low-risk way to save money. For more information about redeeming savings bonds, different types of bonds, or any other savings bond related questions, you can visit Treasury Direct website.
