You cannot deposit a savings bond directly into a checking account

A savings bond is not money yet — it is a debt instrument the U.S. Treasury issued to you. Your bank's checking account system cannot process it the way it processes checks or transfers. You have to convert the bond to cash first, then deposit that cash. The conversion step takes time and involves either your bank, the Treasury, or both.

The path you take depends on what kind of bond you hold, whether it is still earning interest, and which financial institution you use. Some banks will handle the redemption for you as part of a deposit. Others will not touch it. The Treasury itself will redeem bonds if you go directly to them, but that adds days to the timeline.

Key Takeaways

  • Savings bonds must be redeemed for cash before the money can enter your checking account — you cannot deposit the bond itself.
  • Your bank may redeem the bond for you during deposit if you have held it for at least one year, but policies vary by institution.
  • Series I and Series EE bonds redeemed before five years have passed incur a penalty of the last three months of interest.
  • If your bank will not redeem the bond, you can redeem it directly through TreasuryDirect or by mailing the bond to the Treasury.
  • Redemption through your bank usually takes one to three business days; redemption through the Treasury takes one to two weeks.

Redeeming a bond through your bank at deposit

Many banks will redeem a paper savings bond for you when you deposit it, as long as you meet their requirements. Call your bank's customer service line or visit a branch and ask whether they redeem savings bonds. If they do, ask what documents you need to bring and whether there are any restrictions on the bond type or age.

Most banks require that you have held the bond for at least one year before they will redeem it. They also typically require that you present the bond in person with a government-issued photo ID. Some banks will not redeem bonds issued more than a certain number of years ago, or bonds that are no longer in production. A few large banks have stopped redeeming paper bonds altogether, so do not assume your bank will do this even if it did in the past.

If your bank agrees to redeem it, the teller will verify the bond's serial number and current value, then deposit the cash into your checking account. This usually posts within one to three business days. The bank may charge a small fee — typically $5 to $10 — though some waive it for account holders.

Redeeming a bond through TreasuryDirect online

If you own a Series I or Series EE bond issued after 2005, you can redeem it through TreasuryDirect, the Treasury's online system. You must have registered the bond in TreasuryDirect when you bought it, or have transferred it there after purchase. If you bought the bond in paper form and never set up a TreasuryDirect account, this route is not open to you.

Log into your TreasuryDirect account, navigate to the bond you want to redeem, and request the redemption. The Treasury will deposit the cash directly into the bank account you have on file with them. This usually takes one to two business days after you submit the request.

Before you redeem, check how long you have held the bond. Series I and Series EE bonds redeemed before five years have passed will lose the last three months of interest as a penalty. If you have held the bond for five years or longer, there is no penalty.

Redeeming a paper bond by mail to the Treasury

If you hold a paper bond and your bank will not redeem it, or you do not have a TreasuryDirect account, you can mail the bond directly to the Treasury. You will need to fill out Form PD 1239, which is the "Statement of Ownership" form. Download it from the Treasury website or request it by phone at 844-284-2676.

Sign the form and the back of the bond itself. Include a copy of your government-issued photo ID and mail both to the address listed on the form. The Treasury will verify the bond and mail you a check to the address on file. This process takes one to two weeks from the time they receive your package, plus mail time in both directions.

Do not send the bond through regular mail without tracking. Use certified mail with return receipt so you have proof of delivery. The Treasury will not replace a bond that is lost in the mail.

Penalties for redeeming before five years

Series I and Series EE bonds carry an interest penalty if you redeem them before you have held them for five years. The penalty is equal to the last three months of interest the bond has earned. For example, if your bond earned $50 in the most recent three months, you lose that $50 when you redeem early.

Series HH bonds and older bond types have different rules. If you are redeeming a bond issued before 2005 or a type you are unsure about, contact the Treasury at 844-284-2676 or check the bond's documentation before you redeem. The penalty can be substantial on older bonds that have been earning interest for decades.

If you have held the bond for five years or longer, there is no penalty no matter when you redeem it. The five-year clock starts from the issue date printed on the bond, not from the date you purchased it.

What to do if your bond is lost or damaged

If your paper bond is lost, stolen, or too damaged to read, you can still redeem it or replace it. Contact the Treasury at 844-284-2676 and explain what happened. They will ask for the bond's serial number, issue date, and your Social Security number to verify ownership. If you cannot provide the serial number, they may ask for additional proof, such as old bank statements or purchase receipts.

The Treasury can issue a replacement bond or redeem the original and deposit the cash into your bank account. The replacement process takes several weeks. If you need the money sooner, ask whether they can redeem the bond instead and deposit the proceeds directly.

Checking the current value of your bond before you redeem

Before you redeem, find out what your bond is worth. The value depends on the bond type, issue date, and how long you have held it. Series I bonds earn interest that changes every six months. Series EE bonds earn interest at a fixed rate set when you bought them.

If your bond is registered in TreasuryDirect, log in and the system will show you the current value. If you hold a paper bond, use the Treasury's Savings Bond Calculator on the TreasuryDirect website. Enter the bond type, series, denomination, and issue date, and the calculator will tell you what it is worth today and what it will be worth on any future date. This helps you decide whether to redeem now or wait.

Frequently Asked Questions

Do I have to pay taxes on the interest when I redeem a savings bond?

Yes. The interest your bond earned is subject to federal income tax in the year you redeem it. You do not pay the tax at redemption — you report the interest on your tax return. Some states also tax bond interest. Keep the redemption receipt so you have proof of the amount for your tax records.

Can I deposit a savings bond into someone else's checking account?

No. The bond must be redeemed in the name of the person who owns it. If you want to give the money to someone else, redeem the bond into your own account first, then transfer the cash to them. If the bond is registered to a minor, a parent or legal guardian must handle the redemption.

What if my bank says they do not redeem savings bonds?

Try another bank in your area — policies vary. If no local bank will redeem it, use TreasuryDirect if the bond is registered there, or mail it to the Treasury with Form PD 1239. The mail route takes longer but always works for any bond the Treasury issued.

Can I redeem a savings bond that is in someone else's name?

Only if you are listed as a co-owner on the bond or if you have legal authority, such as power of attorney or guardianship. If the bond is solely in another person's name, they must redeem it themselves or authorize you in writing with a notarized document.