U.S. savings bonds are nontransferable securities, so you can’t sell them on the market the way you sell negotiable bonds. However, you can redeem both Series EE and Series I savings bonds before they mature. In practice, this amounts to selling the bonds back to the government for their full value, plus accumulated interest.
Terms and Conditions
Every savings bond is registered to a specific owner or co-owners. Only a bond’s registered owner can sell it back to the Bureau of the Public Debt, which is the agency that issues savings bonds. The only exception is someone who inherits savings bonds. You can’t redeem a savings bond for one year after you purchase it, except in cases of economic hardship. When you cash in savings bonds less than five years after purchase, you forfeit three months interest as a penalty. After the five-year mark, you can redeem the bonds anytime without any restriction or penalty.
Electronic savings bonds are purchased and sold through online accounts on the Treasury Direct website. To redeem a savings bond you own, log onto your Treasury Direct account and follow the prompts. It’s wise to verify your bank account information before redeeming the bond. You must redeem at least $25 dollars worth. Unless you are closing your account, you must leave a balance of $25 or more in the account. Your money will be credited to your bank account within one business day.
Paper Savings Bonds
Paper savings bonds are no longer sold as of January 1, 2012, but many people still own some. To redeem a paper savings bond, take it to a bank, credit union or similar financial institution. Fill out the "request for payment" section on the back of the bond and sign it in the presence of a bank official. If you are cashing in less than $1,000 worth of bonds, the bank can pay you on the spot. Otherwise, you need to mail the bonds, along with your mailing address and Social Security number, to the nearest Treasury Retail Securities Site. Locations of Retail Securities Sites are available on the Treasury Direct website.
Bonds You Inherit
When one co-owner of a savings bond dies, the survivor becomes sole owner and may redeem the bond in the usual manner. If you inherit savings bonds whose value is under $100,000 on the date of death, complete Form PDF 5336 and mail it to the address on the form. You must include proof of death such as a copy of the death certificate. Send the bonds as well if they are in paper form. In some states, when there is more than one heir and the bonds are not left specifically to you, all heirs must complete Form PDF 5394 as well. If the value of the savings bonds is more than $100,000, you cannot redeem them yourself. A court-appointed administrator or the estate executor must handle the disposition of the bonds.
Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.