How to Redeem U.S. Savings Bonds for Cash After a Layoff (2026)
I may be showing my age here, but I am sitting on a huge pile of savings bonds.
Grandparents, aunts I don’t remember meeting, and high school graduation cards all left me with a large pile of savings bonds over the years.
Out of pure laziness (I have never bothered to go into the bank and cash them in), and because I did not want to pay the taxes, they are still sitting in a fireproof envelope long past their maturity date.
But if I was laid off? I would be cashing these in immediately. No sense in having them sitting around if I need all the cash I can get. They are also part of my emergency-fund liquidity plan, a way to make sure I am preserving cash wherever I can in a crisis.
Whether that is the case for you or you are just trying to get an understanding of how to go about cashing in these slips of paper, this guide will walk you through what savings bonds actually are, how their redemption works in 2026, and where you can go to redeem savings bonds when you need the cash.
(Don’t worry, the process isn’t nearly as bad as you think it is going to be.)
What a U.S. Savings Bond Actually Is
A U.S. savings bond is a small loan you (or whoever gifted it) made to the federal government. In exchange, the government pays you back your money plus interest. Because it is backed by the full faith and credit of the U.S. Treasury, it is about as low-risk as a place to put money can get. That safety is the whole appeal, and it is also why they were such a popular gift for decades.
If you are younger and this all sounds vaguely familiar but fuzzy, that is because the way bonds are sold changed. Paper savings bonds (the physical certificate with your name on it) are no longer sold. As of January 1, 2025, all new savings bonds are issued electronically through the Treasury’s website, TreasuryDirect.gov. Plenty of paper bonds issued before then are still out there, which is why this article covers both.
There are really only two types you are likely to be holding:
• Series EE bonds. These earn a fixed interest rate and are guaranteed to be worth at least double their face value after 20 years. They keep earning interest for a full 30 years. (These are the bonds that I have been gifted over the years.)
• Series I bonds. These earn a combined rate: a fixed piece plus an inflation-adjusted piece that resets twice a year, so they are designed to keep pace with rising prices. They also run for 30 years.
You may also run into older paper Series E bonds (the predecessor to EE) or Series HH bonds. Those are no longer sold, and most have already stopped earning interest, but they can still be cashed. More on the old ones below.
Quick Context For bonds issued November 2025 through April 2026, Series I bonds carry a composite rate of 4.03% and new Series EE bonds carry a fixed rate of 2.50%. Rates reset every six months, so the number on an older bond is often different. You can always check a specific bond’s current value with the Treasury’s Savings Bond Calculator. |
You Do Not Have to Wait for the Maturity Date
This is the single most important thing to understand, because it is the thing that keeps people from using money they already have. You do not have to hold a savings bond until it matures to cash it.
A 30-year maturity date tells you when the bond stops earning interest. It does not lock your money up for 30 years. The real rules are much friendlier:
• After 12 months, you can redeem the bond for its full current value, interest and all. Before the one-year mark you cannot cash it at all, but if it is older than a year, it is fair game.
• Before 5 years, there is one small catch: you forfeit the most recent three months of interest. So if you cash a bond at the two-year mark, you collect 21 months of interest instead of 24. You do not lose any of your original money, just a sliver of the growth.
• After 5 years, there is no penalty at all. You get every dollar of principal and interest earned up to the day you cash it.
The most important thing (especially for me who has been holding onto these bonds forever): even a bond that has sailed past its maturity date and stopped earning interest can still be redeemed. The money does not disappear. A bond that finished its 30 years is simply sitting at its final value, waiting for you to claim it. There is no deadline to cash a matured bond. (There is, in fact, more than $33 billion in savings bonds sitting unredeemed, much of it from bonds that stopped earning interest years ago.)
The Takeaway on Timing If a bond is more than a year old, you can cash it. If it is more than five years old, you can cash it with zero penalty. If it is matured, cash it now, because it is not earning you anything by waiting. During a layoff, idle money that you can access penalty-free is exactly the money to reach for first. |
Where to Redeem Savings Bonds
How you cash a bond depends on one thing: whether it is electronic or paper. Here are your options.
1. Online Through TreasuryDirect (Electronic Bonds)
If your bonds are electronic, TreasuryDirect.gov is the one and only place to redeem them, and it is the fastest route by far. You log into your TreasuryDirect account, go to ManageDirect, choose Redeem securities, pick the bonds you want to cash, and send the money straight to your linked bank account. You can redeem any amount of $25 or more, and you can cash part of a bond and leave the rest to keep growing. It is available seven days a week, and there is no limit on how much you can redeem at once.
2. At a Bank or Credit Union (Paper Bonds Only)
For paper bonds, your own bank or credit union is the traditional option, but this route has gotten noticeably harder. Many institutions have stopped cashing savings bonds entirely, and a number of banks and credit unions have announced in 2025 and 2026 that they will no longer redeem them at all. The ones that still do often cash bonds only for established customers (some require that you have held an account for a set period), may require certain bond types only, and frequently cap the dollar amount they will redeem for newer customers.
If you want to try this route, call your bank first and ask three questions: whether they cash savings bonds at all, whether you qualify as a customer, and whether there is a dollar limit. Bring the paper bonds (unsigned until you are in front of the teller) and one or two forms of ID.
3. By Mail Through TreasuryDirect (Paper Bonds)
If no bank will cash your paper bonds, or you would rather not deal with one, you can redeem them directly with the Treasury by mail. You fill out FS Form 1522 (available on TreasuryDirect.gov), have your signature certified if the form requires it, and mail the form along with your unsigned paper bonds to Treasury Retail Securities Services. The Treasury verifies everything and deposits the proceeds directly into your bank account. Two things to know: you can redeem up to 30 paper bonds per form, and unlike electronic bonds, a paper bond must be cashed for its entire value (no partial redemptions).
Heads Up on Old Paper Bonds Paper Series E and Series HH bonds cannot be cashed at a bank in the normal way. For those, and for any paper bond a bank turns away, the mail-in FS Form 1522 process through TreasuryDirect is your path. You can also convert eligible paper bonds into electronic form inside a TreasuryDirect account if you would rather manage them digitally. |
A Simple Step-by-Step: Redeeming Online
Since electronic redemption is what most people will use going forward, here is the full flow in order:
1. Create or log into your TreasuryDirect account. Go to TreasuryDirect.gov and sign in, or open a free account if you do not have one. You will need your Social Security number and a U.S. bank account.
2. Confirm the bond is at least a year old. If it is younger than 12 months, you cannot redeem it yet. If it is between one and five years old, remember the three-month interest penalty.
3. Go to ManageDirect, then Redeem securities. Select "Bonds" as the security type and submit.
4. Choose which bonds and how much. Pick the specific bonds to cash. For electronic bonds you can redeem a partial amount (as little as $25) and leave the rest invested.
5. Send the money to your bank. Select your linked bank account as the destination and confirm. The funds are deposited directly, with processing times noted on the site.
Before You Cash: Three Things Worth Checking
• Check the current value first. Use the Savings Bond Calculator on TreasuryDirect (for paper bonds) or just log in to see electronic balances. You may be sitting on more than you think, or on a bond that is only months away from an interest accrual date worth waiting for.
• Mind the taxes. Interest on savings bonds is subject to federal income tax, but it is exempt from state and local tax. You will get a 1099-INT for the year you cash the bond, so set aside a little of the proceeds for the tax bill rather than spending every dollar.
• Cash the right bonds in the right order. If you have several, redeem matured bonds first (they earn nothing more), then bonds past the five-year mark (no penalty), and leave any still inside the first five years for last if you can, so you keep more of the interest.
Frequently Asked Questions
Where can I redeem savings bonds?
Electronic savings bonds are redeemed online at TreasuryDirect.gov, with the money deposited to your bank account. Paper savings bonds can sometimes be cashed at a bank or credit union where you are a customer, though many no longer offer this. If a bank will not cash them, you redeem paper bonds by mailing FS Form 1522 and the bonds to the Treasury. TreasuryDirect is the one official place to redeem electronic bonds and to process paper bonds by mail.
Can I cash a savings bond before it matures?
Yes. You can redeem any savings bond once it is at least 12 months old. If you cash it before five years, you give up the last three months of interest, but you never lose your principal. After five years there is no penalty at all.
Can I still cash a bond that already matured?
Yes, and you should. A matured bond has simply stopped earning interest; its value does not vanish and there is no deadline to claim it. If you have bonds that have passed their 30-year mark, cash them, because holding them any longer earns you nothing.
How do I know what my bond is worth?
For paper bonds, use the free Savings Bond Calculator on TreasuryDirect.gov; you enter the series, denomination, and issue date. For electronic bonds, the current value shows in your TreasuryDirect account.
Will I owe taxes when I cash a savings bond?
You will owe federal income tax on the interest the bond earned, reported on a 1099-INT for the year you redeem it. Savings bond interest is exempt from state and local income tax. If the bond was used for qualifying education expenses, some or all of the interest may be excludable, which is worth asking a tax professional about.
Do savings bonds expire?
No. They stop earning interest at 30 years, but they do not expire and cannot be cashed "too late." The money is yours to claim whenever you get to it.
Are You Flush With Savings? (Savings Bonds, That Is)
Savings bonds are one of the most overlooked sources of cash during a layoff, mostly because people assume their money is locked up until some distant date. It is not. If a bond is more than a year old, you can turn it into cash, and if it is more than five years old or already matured, you can do it with no penalty at all. Electronic bonds take a few minutes through TreasuryDirect; paper bonds take a bank visit or a form in the mail.
When money is tight and you are stretching every resource, a drawer full of forgotten bonds is not sentimental clutter. It is a bank account you already own. Go find out what it holds.
This article is for general information and is not tax or financial advice. For guidance on your specific situation, consult a qualified professional.
Part of the Dismissal Dollars Series, dedicated to practical ways to bring in a little bit of extra money while you land your next opportunity.
About the Author Corporate Kate has spent nearly 15 years inside corporate tech, managing large teams and making the hiring decisions most job seekers never get to see. She holds a bachelor’s degree in Finance and writes about layoffs, careers, and money. |
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