How To Cash A Paper Savings Bond

Paper savings bonds are still sitting in drawers, safes and vaults across America, and cashing one in 2026 is a little harder than it used to be.

Savings bonds are now sold almost exclusively electronically through TreasuryDirect. The last way to get a new paper bond – tax time paper I bond program – ended on January 1, 2025. That means every paper savings bond out there has a legacy document, and the infrastructure to cache them is shrinking all the time: fewer banks will redeem them over the counter, and more redemptions go through the mail to the Treasury.

There’s also a new wrinkle for 2026: If you’re in default on your federal student loans, the government can intercept your savings bond payment through the Treasury Offset Program when you redeem it by mail or through TreasuryDirect. We cover that below.

Here’s everything you need to know about cashing in on a paper savings bond in 2026.

What are savings bonds and how do they work?

Savings bonds have been around since 1935. When you buy federal savings bonds, you lend money to the government, which agrees to pay that money back later, with interest.

The US currently offers two types of savings bonds: Series EE and Series I. Both earn interest for 30 years. You can redeem a bond after you’ve held it for a year, but if you cash it in before five years, you lose the last three months of interest.

If your paper bond is more than 30 years old, it has stopped earning interest altogether – the money is just sitting there losing value due to inflation. The Treasury Department estimates that billions of dollars in maturing, unredeemed savings bonds are still outstanding.

Not sure how much your relationship is worth? Use it Savings Bond Calculator at TreasuryDirect.gov. You will need the series, denomination and date of issue printed on the face of the bond.

Where to cash a paper savings bond

You have two options: a bank or credit union or sending the bond to the Ministry of Finance.

Option 1: Your bank or credit union

Many banks are still getting Series E, EE and I bonds – but this is getting harder every year. Banks are not required to buy back savings bonds, and most have tightened their policies:

Most banks will only issue bonds to established customers – the Secret Service recommends (and many banks require) that you have an account for at least 12 months before they will redeem the bonds for you. Many banks also limit the dollar amount they will redeem in a single visit, and some branches have stopped paying out bonds altogether.

Call your bank before you go. Ask if they redeem savings bonds, if there is a dollar limit, and what identification they require.

Out of the bank route: you get the money instantly and the payment is made over the counter by the bank.

Option 2: Send your bonds to the Treasury (FS Form 1522)

If your bank won’t cash your bonds—or you have a large run—you can redeem them directly at the Treasury:

1. Fill out Form FS 1522 (Special form of request for payment of savings and pension bonds from the United States). TreasuryDirect has step-by-step instructions.
2. If the total value of the bonds is $1,000 or less, you can simply sign the form and include a copy of your state-issued ID. If the value is more than $1,000, you must sign the form in front of a certifying officer (most banks and credit unions offer a signature certification—a notary stamp alone is not accepted).
3. Include your bank routing and account numbers on the direct deposit form.
4. Mail the unsigned bonds and the completed form to: Treasury Retail Securities Services, PO Box 9150, Minneapolis, MN 55480-9150.

Expect processing to take several weeks – the Treasury currently says at least six weeks in many cases. Consider sending mail with a follow-up. Do not sign the bonds yourself.

The Treasury Department also has special procedures for less common situations: bonds owned by minors, estates of deceased owners, name changes, and owners living outside the U.S. Details are at TreasuryDirect Cash Page.

When should you cash a savings bond for paper?

There are several scenarios where it makes sense to cash out your paper savings bond:

The bond is more than 30 years old. It stopped earning interest. No use continuing to hold it – buy it back and put your money to work elsewhere.

You can earn more elsewhere. Depending on when your bond was issued, its rate may be well below what you might earn on a high-yield savings account, CD, or portfolio of diversified index funds. Check your current bond rate with Savings Bond Calculator before deciding.

You need the money. Bonds older than one year can always be redeemed. Just remember the quarterly interest if the bond is less than five years old.

Another option worth knowing about: instead of cashing in the paper bonds, you can convert them to e-bonds at TreasuryDirect using its SmartExchange feature, making it easy to track and redeem them later.

And if you think you (or a deceased family member) might own bonds you can’t find, check Treasury at TreasuryDirect.gov – it’s the Treasury Department’s free search tool for maturing, unredeemed bonds.

Do I owe taxes when I buy a paper savings bond?

Yes, but only on interest. Interest on savings bonds is subject to federal income tax (but exempt from state and local income tax). Unless you chose to report the interest annually (most people don’t), all of the interest is taxable in the year you redeem the bond.

If the money is in the bank, the bank will issue a Form 1099-INT – either in person or by mail next January. If you redeem by mail or through TreasuryDirect, your 1099-INT will be available from Treasury.

One potential tax break: If you use the proceeds from Series EE or I bonds qualified higher education expenses in the same year, you may be able to exclude some or all of the interest from income. The education exclusion has income limits and other requirements – see IRS Form 8815 for details.

Moving doesn’t change your tax bill either. If part of your redemption is taken out for a defaulted student loan, the interest is still taxable to you in the year of redemption.

Bottom line

Monetizing a paper savings bond in 2026 requires a little more planning than before. Call your bank first – if they’re going to buy your bonds, that’s the fastest route. If not, the FS 1522 form and a trip to the post office will complete it in a few weeks.

If your bonds are more than 30 years old, don’t wait: they stopped earning interest long ago. And if you’re in default on your federal student loans, deal with the default (or at least know your default status) before you send the bonds to the Treasury—otherwise your redemption check could go to your loans instead of your bank account.