Are Banks Required To Cash Savings Bonds?

The Treasury Department will redeem savings bonds by mail, sending you a government check for the bond’s face value. To cash a bond using this approach, you must first go to a bank — any bank — and have your identify validated by a bank official on the bond. You can take a large-value savings bond to a bank where you aren’t a customer, have your signature confirmed, and receive payment by mail using the postal option. Treasury Retail Securities Site, PO Box 214, Minneapolis, MN 55480-0214 is the mailing address you’ll need to cash in your bonds.

Can banks refuse to accept savings bonds as payment?

Bring your bond to your bank, but not any bank. It has to be an account that you’ve owned for at least six months. If that isn’t possible, you can use a government-issued photo ID to prove your identification. The most prevalent form of identification is a driver’s license. If you need identification like a driver’s license to prove your identity, you’ll only be able to cash $1,000 in savings bonds. After that, you’ll need to sign a payment request form in front of a bank representative, confirm your social security number, and validate your current address.

As long as the child is too young to sign his or her name, a parent or guardian of a child who is the holder of a savings bond can redeem the bond.

If the bond’s original owner has passed away but the bond’s beneficiary has been named, the beneficiary can redeem the bond. Finally, a person with legal capacity to conduct business on behalf of the bond bearer can redeem the bond in particular instances. This is usually someone acting on behalf of the estate of a deceased person.

A bank may refuse to issue payment for a bond in certain situations, or may even be legally unable to do so. In these instances, the bearer may be required to redeem the bond at a Federal Reserve Bank Savings Bond Processing Site. The Treasury Department’s TreasuryDirect Web site lists the locations of these facilities.

When did banks cease accepting savings bonds for redemption?

WASHINGTON, D.C. — Paper savings bonds will no longer be sold at financial institutions as of January 1, 2012, according to the Bureau of the Public Debt.

What happens if you fail to redeem your savings bonds?

  • You would lose the last three months of interest if you cash an EE bond before it reaches the age of five years.
  • If you don’t redeem your EE bonds before they mature, you’ll get 30 years of interest. As a result, the longer you keep the bond (up to 30 years), the more valuable it becomes.

Do banks have to cash non-customer savings bonds?

If you want to cash a bond at a bank where you don’t have an account, you’ll need to present photo identification like a driver’s license or a state-issued ID card. The form of identification, as well as the number and issue date, will be noted on the bond by the bank official. A bank’s maximum amount of savings bonds it can cash for a non-customer is $1,000. The bank will not redeem a savings bond with a redemption value of more than $1,000. If the total amount of lesser bonds is less than $1,000, you can cash them all.

Can you cash a savings bond at any bank?

The best place to start redeeming your savings bond is the same place where you have a checking account. Customers who have had a checking or savings account with Bank of America for at least six months can quickly cash in their savings bonds. According to the Treasury Department, over 95% of these bonds are redeemed at banks and credit unions.

If you have trouble cashing it in at your bank, you can redeem it directly through the Treasury Department by downloading form 1522, having your signature certified, and submitting your unsigned bonds to:

When cashing in savings bonds, how do I avoid paying taxes?

Cashing your EE or I bonds before maturity and using the money to pay for education is one strategy to avoid paying taxes on the bond interest. The interest will not be taxable if you follow these guidelines:

  • The bonds must be redeemed to pay for tuition and fees for you, your spouse, or a dependent, such as a kid listed on your tax return, at an undergraduate, graduate, or vocational school. The bonds can also be used to purchase a computer for yourself, a spouse, or a dependent. Room and board costs aren’t eligible, and grandparents can’t use this tax advantage to aid someone who isn’t classified as a dependent, such as a granddaughter.
  • The bond profits must be used to pay for educational expenses in the year when the bonds are redeemed.
  • High-earners are not eligible. For joint filers with modified adjusted gross incomes of more than $124,800 (more than $83,200 for other taxpayers), the interest exclusion begins to phase out and ceases when modified AGI reaches $154,800 ($98,200 for other filers).

The amount of interest you can omit is lowered proportionally if the profits from all EE and I bonds cashed in during the year exceed the qualified education expenditures paid that year.

When you cash in your savings bonds, do you have to pay taxes?

Taxes can be paid when the bond is cashed in, when the bond matures, or when the bond is relinquished to another owner. They could also pay the taxes annually as interest accumulates. 1 The majority of bond owners choose to postpone paying taxes until the bond is redeemed.

After 30 years, how much is a $50 EE savings bond worth?

Savings bonds are regarded as one of the most secure investments available. The underlying principle is that the value of a savings bond grows over time, but it’s easy to lose track of how much it’s worth over time.

The TreasuryDirect savings bond calculator, fortunately, makes determining the value of a purchased savings bond a breeze. You’ll need the bond series, face value, serial number, and issuance date to figure out how much your savings bond is worth.

If you bought a $50 Series EE bond in May 2000, for example, you would have paid $25. At maturity, the government committed to repay the face amount plus interest, bringing the total value to $53.08 by May 2020. A $50 bond purchased for $25 30 years ago is now worth $103.68.

Will savings bonds lose their value?

The most prevalent type, Series EE Bonds, were initially issued in 1980 and are still in use today. They were designed to pay interest for up to 30 years. 1 2 As a result, any bonds issued before 1989—the first generation—will have stopped paying by the end of 2019.