While savings bonds are intended to be long-term investments, eventually the time will come when you want to redeem them. Maybe you need the money to return to school, for a long-awaited retirement cruise, or for a hundred and one other reasons. Generally, the easiest way to redeem savings bonds is through your local bank, credit union, or other financial institution, although you also can contact the U.S. Bureau of Public Debt or the nearest Federal Reserve Bank.
Redeeming savings bonds at your local financial institution is a simple and straightforward process. If you are not a regular customer or member, you may have to show your driver's license or other identification. If you are not the owner of the bonds, you will also have to establish that you're entitled to cash them. For example, you may be listed as a beneficiary on the bonds of someone who has died and in addition can provide a death certificate of the former bond owner. You also can cash bonds for your children. In some cases, the request to cash a bond may have to be sent to a Federal Reserve Bank; your financial institution can help process this request.
You can redeem your bonds for their full value, unless you have held them for less than five years. In that case, there is a penalty equaling three months' interest. For example, if you redeemed a Series EE bond that you had held for two years, you would receive interest for 21 months--not 24 months. Note: Series HH/H bonds have not been available for sale or exchange since August 2004.
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