Americans are sitting on more than $39 billion of matured but unredeemed U.S. savings bonds, according to the Treasury Department, but cashing them isn’t as simple as it was.
Electronic savings bonds automatically redeem upon maturity, but paper bonds require effort. Banks remain the primary method of cashing in bonds, including the popular 30-year Series EE, with between 76% and 83% of all bonds now redeemed at banks, according to a Treasury spokesperson. But due to fraud concerns, many banks have revised their policies to make it tougher for newer or noncustomers to make redemptions. What’s more, many banks impose a limit on the amount of bonds that can be cashed at one time.
The other option for cashing in paper bonds—mailing them directly to the Treasury—also has become more difficult. As the Treasury section that oversees savings bonds was downsized in the government-efficiency initiative earlier this year, financial experts said to expect delays, especially when it comes to customer service for issues like lost bonds or redeeming on behalf of another person. The agency also has warned of potential delays amid a customer-service deluge stemming from the recent popularity of inflation-adjusted savings bonds.
“With less Treasury people around and less banks willing to bother with it, it definitely will be harder to cash these in,” says Jeremy Keil, a financial adviser in the Milwaukee area who hosts the podcast “Retire Today.” “But it still can be done,” he says. Here’s how.
Via your bank
Financial experts say to start locally, but don’t just show up with bonds in hand. “You want to call ahead of time, because the bank might not cash in savings bonds, the signature-guarantee person might not be there, they might not have this form on file,” Keil says.
Bank policies vary, and many of the largest institutions have added restrictions in the past few years. It helps to be a bank customer, especially a long-term one, says Ken Tumin, founder of the bank-account comparison website DepositAccounts. In some cases, he adds, “not only do you have to be a customer, but you have to be an established customer.”
Indeed, the federal government requires that banks cash savings bonds for an established account holder, generally with an account at least a year old, who has proper identification and “who seems worthy of your trust,” according to a 2022 Treasury guide for financial institutions.
But cashing them is optional for newer customers or people without accounts. That’s different from the previous guidance, which required cashing eligible bonds for any customer with proper identification. Finding information on the rules isn’t always easy. Some banks don’t clearly state their policies online and others simply direct people to the Treasury for redemptions.
For instance, JPMorgan Chase says Chase customers with an account open for at least a year can cash savings bonds with a face value of $200 or less and a redemption value of $500 or less per bond.
At Bank of America, people can cash up to 30 eligible paper savings bonds on-site at a time—but only if they have an active account that has been open at least two years. If they have more than 30 bonds, the bank sends them to an off-site bank team for processing.
Wells Fargo and Citigroup also cash paper bonds for customers. Those at Wells Fargo with an account open and active for more than a year can redeem an unlimited amount, and customers for less than a year can redeem up to $1,000 a day. Similarly, Citi clients with a “tenured” account face no redemption limit, while new clients are more restricted. Citi declined to elaborate on what “tenured” means, citing fraud concerns, but said customers can ask for more details at their local branches.
Via the Treasury
If you don’t qualify under those rules, redeeming directly from the Treasury is the best option, says David Enna, who runs the website Tipswatch, where he writes about Treasury inflation-protected securities and Series I savings bonds. But this process can seem arduous, and it can be nerve-racking to put the equivalent of potentially thousands of dollars in the mail.
“It’s a laborious process because you have to create a manifest of all your bonds and you have to mail them,” Enna says. “Nothing happens for many months.”
To mail to the Treasury, you fill out FS Form 1522, which is available on the TreasuryDirect website. The form has you list your bonds, including issue dates and serial numbers; provide direct deposit information; and sign. If the redemption value totals more than $1,000, you also have to include a special certified signature from a financial institution, not just any notary.
The Treasury doesn’t provide guidance on whether to insure the mail, but it does recommend keeping copies of bonds in case they’re lost or another issue arises. Keil says that when he mailed in his bonds a few years ago, he photocopied them and sent them through the Postal Service via Priority Mail, which typically comes with insurance and tracking. Insurance isn’t necessary, as long as you know what you sent, though Keil says you might consider insuring at 2% of their value to make up for the inconvenience of losing them.
Cashing paper bonds under your name and mailed properly with the form takes at least two weeks to process, TreasuryDirect says. For more-complicated inquiries, or if something goes wrong, help can take much longer: at least six weeks for bond transactions not in your name, and at least four months for dealing with lost, stolen or missing bonds, TreasuryDirect says.
Downsizing at the Treasury’s Bureau of the Fiscal Service, which oversees savings bonds, could extend those wait times, experts say. Fiscal Service previously outsourced bond processing but handled customer service in-house, so that operation could take the biggest hit. That could affect things like trying to redeem a bond for a deceased family member or trying to get lost bonds reissued.
This Wall Street Journal article was legally licensed by AdvisorStream.