Cash Savings Bonds in an Emergency

United States Government Savings Bonds are normally something you hold on to until they reach full maturity. If you need to cash them to cover emergency costs, try to cash matured bonds first. If you need to cash immature bonds as well, calculate how much money you stand to gain and lose from an early withdrawal. Make sure you're eligible to cash your bonds before you try. Most bonds need to be at least a year old, but if your region is experiencing emergency conditions, such as flooding or fires, you may be eligible to cash bonds in their first year.

Steps

Choosing to Cash the Bond

  1. Check the value of your bonds online. You can do this using the calculator at the U.S. Treasury's website. Have your bonds handy when you go to the website. Select the series and denomination of your savings bond from the designated drop-down menus. Enter the issue date of the bond in the appropriate field and click "Calculate."
    • The following page will show you the current value of the bond. Change the date field to see what that same bond would be worth if you cashed it in at a later date.
  2. Cash matured bonds first. Cash in savings bonds that have already matured before any others. Matured bonds have reached their maximum value and are no longer earning interest. The amount of time it takes for a bond to reach maturity is based on the bonds' series, but most bonds have a base maturity period of 20 years.
  3. Cash immature bonds selectively. If mature bonds won't cover the cost of your emergency, cash the immature bonds that have come the closest to their earning potential. Start with the oldest bond first; in most cases the earliest savings bond will be closest to maturity, unless your bonds are from multiple series.
    • Check the interest rates each bond is earning. The rate of the interest was determined at the time you purchased the bond. The easiest way to find out the rate is to use the calculator on the U.S. Treasury's website.
    • Series EE bonds, from the 1980s and 1990s, have an extended maturity of 10 years beyond the 20-year base. These savings bonds accrue interest for a total of 30 years, and so have the potential to be worth more than their face value.
    • Consider time of year for bonds bought before May 1997. These bonds accrue interest every 6 months, so you will lose half a year's interest if you cash them right before they have completed a cycle. Cash them for your emergency if they have recently completed a cycle.
  4. Ensure that you can cash the bonds. After you have determined which bonds you would like to cash, make sure that you are eligible to cash them. Bonds that are too recent might not be available to cash in an emergency. EE, E, and I savings bonds cannot be cashed until they have matured for a full year. However, if you live in an area that has been affected by a natural disaster, you may be able to cash your bonds early.[1]
    • If your area has been affected by flood, fire, hurricane, or tornado, check the Press Releases section of the US Treasury website to see if you are eligible to redeem bonds that are less than a year old.
    • If you co-own a bond, you can cash the bond independently of its co-owner.
    • If you are currently in another country, you will need to sign your request in the presence of the appropriate official. This official could be a US diplomatic or consular representative, an officer of a foreign branch of a bank that is incorporated in the US or US territory, or a notary.[2]
    • if you are in a country that is not included in the Hague Convention, a U.S. diplomatic or consular officer must approve the official's character and jurisdiction.
    • If you are not a US Citizen, you will also need to fill out IRS Form W-8BEN.

Cashing Your Bonds

  1. Get your papers together. Bring identification, such as your passport, driver's license, or social security card. Make sure the name on your bond, your bank account, and your ID match. If your name has changed, bring name change certification or expired forms of identification that include your old name.[3]
    • If you have inherited a bond, you may need to present a certified copy of the death certificate. Call your bank ahead of time to determine their requirements.[4]
    • If you are cashing a band for a child of whom you are the legal guardian, you must bring a copy of the child's birth certificate or other identification materials.[2]
  2. Take the bonds to a bank or credit union. If you have an active bank account, you should be able to cash your bonds at your bank with little interference. If you have no active accounts, contact the bank ahead of time to ask their policies on savings bonds. The bank may refuse to cash the bonds, or they may only be willing to cash a certain amount. They might request additional documentation as well.
  3. Cash your bonds through the mail. Mail the savings bonds to the federal government if you can't find a banking institution to cash them locally. Contact the Treasury Retail Securities office closest to you. Obtain a PD F 5179-1 form from them. Fill out the form and have your signature certified by a notary public. Most banks provide notary services for members. If not, check your local directory for notary republics in your area.
    • Mail the form, along with the bonds you wish to sell, to the government via certified mail so you have tracking services and proof of delivery.
    • The Treasury Department will send you a check for the value of the bonds you sold.
  4. Sell your bonds online at the Treasury's website. You are allowed to convert some bonds paper to electronic form and sell them online, without having to mail in the physical copies. If you have an electronic bond, you can cash it online. If you would like to convert your paper bonds to electronic bonds, make a TreasuryDirect account and follow the instructions from there.[5]

Warnings

  • You'll owe federal tax on the interest you earned from the savings bonds the year they mature, not the year you cash them, otherwise, you may be subject to tax penalties. It's like, if you didn't cash your December 2014 paycheck until January 2015. It would still be taxed on the year it was earned, 2014, not on the year it was cashed, 2015. Also, avoid selling so many bonds in the same year that you get bumped into a higher tax bracket.

Things You'll Need

  • Savings bonds
  • Internet access

Related Articles

Sources and Citations

  1. ↑ https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeredeem_disaster.htm
  2. ↑ 2.0 2.1 http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eeredeem_special.htm
  3. ↑ http://www.savingsbonds.com/faq3.cfm
  4. ↑ https://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eedeath.htm
  5. ↑ https://www.treasurydirect.gov/indiv/research/indepth/smartexchangeinfo.htm
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