To cash Series E savings bonds, bring the paper bond and a government-issued photo ID to a bank or credit union that acts as a Treasury paying agent, or convert the bond to electronic form through a TreasuryDirect account and redeem it online. Either route pays you the bond’s full redemption value: original purchase price plus every dollar of interest it earned before final maturity. And every Series E bond has already reached that final maturity, so there is no reason to keep holding one.
Every Series E Bond Has Stopped Earning Interest
The Treasury sold Series E bonds from May 1941 through June 1980. The final maturity date depends on when the bond was issued:
- Bonds issued from May 1941 through November 1965 earned interest for 40 years. The last of them stopped earning in November 2005.
- Bonds issued from December 1965 through June 1980 earned interest for 30 years. The last of them stopped earning in June 2010.
Once a bond reaches its final maturity, interest stops permanently. It cannot be restarted, extended, or rolled into a new bond. A Series E bond sitting in a drawer today is losing purchasing power to inflation, and, as covered below, the IRS already considers its interest taxable whether you have cashed it or not.
Check the Bond’s Value First
Because interest rates shifted many times over the decades these bonds were outstanding, working out redemption value by hand is impractical. The Treasury Department publishes a free Savings Bond Calculator that handles it. Enter the series, denomination, and issue date printed on the face of the bond, and the calculator returns the total redemption value. You don’t need the serial number for a value lookup, and if you hold several bonds the calculator will store your entries so you can build an inventory.
The number it gives you is the amount the bank or TreasuryDirect will pay. The interest portion of that number is also your taxable gain, which matters when you sit down to report it.
Cashing at a Bank
Walking into a bank or credit union is the fastest option. Most institutions serve as authorized paying agents for Treasury securities, though they have leeway in whom they’ll serve.
Banks are required to cash eligible savings bonds for established account holders who present proper identification. If you don’t hold an account at the bank, or you opened one recently, payment is at the bank’s discretion. Treasury guidance notes that the Secret Service recommends banks not cash bonds for anyone who has been a customer fewer than 12 months. Some large banks apply stricter internal rules, and at least one national bank refuses to cash savings bonds at all. If your usual bank turns you away, call around before making another trip.
Bring a government-issued photo ID such as a driver’s license, passport, or state ID card. You’ll sign the back of the bond in front of a bank employee and provide your Social Security number if it isn’t already printed on the bond. Payment is on the spot, typically as a deposit into your account.
The $1,000 Certification Threshold
If the total current redemption value of the bonds you are cashing at that visit is $1,000 or less, your signature and photo ID are enough. Above $1,000, you must sign in the presence of a notary public or an authorized certifying officer, who applies an official seal or stamp. Bank officers at depository institutions qualify as certifying officers and use the institution’s seal, signature guarantee stamp, or paying agent stamp. Notary fees for this run only a few dollars per signature in most states.
Redeeming Through TreasuryDirect Instead
If no bank near you will cash your bonds, or you’d rather handle it from home, you can convert paper Series E bonds into electronic holdings and redeem them online. The service is free, but the process takes several weeks from start to finish:
- Open a free account at TreasuryDirect.gov. You’ll need your Social Security number, a U.S. address, and a bank account for direct deposits.
- Inside your account, go to ManageDirect and select “Establish a Conversion Linked Account” under Manage My Linked Accounts.
- Follow the on-screen instructions to generate a manifest of the bonds you are converting. Do not sign the back of the bonds.
- Mail the unsigned bonds to the address the system provides.
- After Treasury processes the conversion, the bonds appear in your account and you can redeem them electronically. Proceeds are deposited into your linked bank account.
Taxes on the Interest
Interest on Series E bonds is subject to federal income tax but exempt from state and local income tax. Most owners deferred reporting the interest year by year, planning to settle up when they eventually cashed in. That plan has a problem now.
The Interest Was Taxable in the Maturity Year, Not the Redemption Year
Under federal tax law, if you deferred reporting interest on your savings bonds, you must report it in the earlier of the year you cash the bond or the year the bond reaches final maturity. Every Series E bond has already matured, so the IRS treats the interest as taxable in the maturity year regardless of whether you actually redeemed the bond. A bond that matured in November 2005 should have had its interest reported on your 2005 return.
If you’re holding unredeemed bonds and never reported the interest, you have unreported income from a prior tax year. The IRS charges interest on unpaid tax from the original due date until the balance is paid, at the federal short-term rate plus three percentage points, compounded daily. A late-payment penalty of 0.5% per month, capped at 25%, applies to the unpaid tax. If you also never filed a return for that year, a failure-to-file penalty of 5% per month, capped at 25%, applies on top.
This is fixable. File an amended return or a late original return for the maturity year, report the interest, and pay the tax plus penalties and interest. If your compliance history is otherwise clean, the IRS offers first-time penalty abatement, which can wipe out the failure-to-pay or failure-to-file penalty for one tax period. A tax professional is worth the fee if you hold bonds from more than one maturity year.
How the Reporting Works at Redemption
When you redeem the bond, the paying agent issues a Form 1099-INT reporting the total interest in Box 3, the box designated for U.S. savings bond and Treasury interest. You report the amount as taxable interest on your federal return, and if your total taxable interest from all sources exceeds $1,500 you also file Schedule B.
If you already reported the interest in the maturity year, either voluntarily at the time or through a later amended return, you’ll need to reduce the amount shown on the 1099-INT so you’re not taxed twice on the same interest. IRS Publication 550 explains the adjustment.
Inherited Series E Bonds
When you inherit Series E bonds, the tax picture depends on what the original owner did. If they deferred the interest, as most people did, someone still owes the tax. The question is who.
The executor of the estate has a choice. They can include all interest that accrued before the date of death on the decedent’s final income tax return. If they do, the heir owes tax only on interest that accrued between the date of death and final maturity, which for Series E bonds has already passed. If the executor doesn’t make that election, the heir is responsible for the entire amount, pre-death and post-death, reportable no later than the year of final maturity or the year of redemption, whichever came first.
Interest that should have appeared on the decedent’s final return but didn’t is classified as Income in Respect of a Decedent. The heir who reports it can claim a deduction for any federal estate tax attributable to that income, which offsets part of the income tax. Given that Series E bonds may have been compounding for 30 or 40 years, the amounts can be substantial, and the interaction between income and estate tax rules is easy to get wrong without professional help.
If the Bond Is Lost, Damaged, or Registered to the Wrong Person
You can’t cash a bond you can’t find or a bond registered to someone who has died without your name on it. Both situations are solvable before you make the trip to the bank.
For a lost, stolen, or damaged bond, the Bureau of the Fiscal Service can look it up in Treasury records and issue a replacement, typically as an electronic bond in your TreasuryDirect account. The starting point is FS Form 1048, “Claim for Lost, Stolen, or Destroyed United States Savings Bonds.” Which version you file depends on what you know:
- If you know the serial number, use the standard FS Form 1048.
- If you don’t know the serial number and the bond was issued before 1974, use the version of FS Form 1048 designed for claims without serial numbers.
- If you don’t know the serial number and the bond was issued in 1974 or later, start at TreasuryHunt.gov. If the system locates your bond, it generates a special version of FS Form 1048 with a reference number that lets the Bureau process the claim without serial numbers.
Sign the completed form in front of a notary or an authorized certifying officer at a bank, then mail it to the address on the form. Expect several weeks. If you later find the original paper bond, return it to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150.
For registration changes on paper bonds, FS Form 4000 covers most situations: removing a deceased co-owner with a certified copy of the death certificate, changing a name, adding or removing a beneficiary. FS Form 1851 is the form for reissuing bonds into a personal trust. Both require your signature to be certified by a notary or an authorized certifying officer, and both are mailed to the address printed on the form.
If the bond is registered to someone who has died and you are the rightful heir but not named on the bond, you will need to go through the estate procedures in 31 CFR Part 315. Those require proof of entitlement such as letters of appointment from a court, a court decree of distribution, or, when the total redemption value of all Treasury securities in the estate is $100,000 or less and there has been no formal administration, appointment as a voluntary representative through the Bureau of the Fiscal Service. Straightening out registration before you try to redeem prevents the bond from being rejected at the counter.