Yes, credit unions do cash savings bonds, but only if the credit union has qualified with the U.S. Treasury as a paying agent. Once a credit union holds that status, federal rules require it to redeem eligible Series EE and Series I paper bonds during regular business hours for anyone who can prove ownership, whether or not that person is a member.1eCFR. 31 CFR Part 321 – Payments by Banks and Other Financial Institutions of Definitive United States Savings Bonds and United States Savings Notes (Freedom Shares) – Section 321.10 A credit union that has not applied for paying agent status has no authority to cash your bonds at all.
Check Whether the Credit Union Is a Paying Agent
Call before you drive over. Ask specifically whether the credit union is a qualified Treasury paying agent for U.S. savings bonds. The authority comes from 31 CFR Part 321, which lets banks, credit unions, and similar institutions apply for a certificate of qualification from a Treasury Retail Securities Site.2eCFR. 31 CFR Part 321 – Payments by Banks and Other Financial Institutions of Definitive United States Savings Bonds and United States Savings Notes (Freedom Shares) Not every credit union chooses to.
Even qualified agents can set their own internal caps. Some limit how much they will redeem per visit, and larger redemptions may need management approval. These are institution policies, not federal rules. A teller may also refuse a bond that is altered or damaged in a way that hides the serial number. When you call, ask about any dollar cap so you don’t arrive with more bonds than the credit union will process in one trip.
What to Bring
- A government-issued photo ID. The name on the ID must match the name printed on the bond.
- Your Social Security number, which the credit union uses to report interest to the IRS.
- The physical paper bond, unsigned. Do not sign the back at home. You sign in front of the teller so your signature can be witnessed.
Confirm the bond is actually eligible before you go. Series EE and Series I bonds have to be held at least 12 months before they can be cashed.3TreasuryDirect. Cash EE or I Savings Bonds If you cash within the first five years, you forfeit the last three months of interest.4TreasuryDirect. I Bonds The free Savings Bond Calculator on TreasuryDirect will tell you what your specific bond is worth today.5TreasuryDirect. Calculate the Value of Your Paper Savings Bond(s)
What Happens at the Window
The teller verifies your identity, examines the bond, and looks up its current value using Treasury redemption tables. That value is your original purchase price plus accrued interest. You will be asked whether you want federal income tax withheld from the interest portion at the time of redemption, which can make tax filing easier later.
You can take your money as cash or as a direct deposit into an account at the credit union. Ask for a receipt showing the serial number, interest paid, and any tax withheld, and keep it. If interest on the bonds you cashed totals $10 or more, the credit union has to send you a Form 1099-INT the following January.6Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID
Cashing a Bond Registered to a Child
A parent can cash a bond registered in a young child’s name at a credit union if three conditions apply: the child is too young to understand a request for payment, you are the parent, and the child lives with you or you have legal custody.7TreasuryDirect. Cashing Paper Bonds for a Young Child
On the back of the bond, write a certification statement giving the child’s name, confirming residency or custody, stating the child’s age and Social Security number, and noting that the child is not old enough to make the request. Sign as “[your name] on behalf of [child’s name], a minor.” The teller verifies your ID and the written certification.7TreasuryDirect. Cashing Paper Bonds for a Young Child
Cashing a Bond After the Owner Has Died
A surviving co-owner named on the bond can cash it at a credit union with valid ID and a certified copy of the death certificate. A named beneficiary can do the same, without probate. When there is no co-owner or beneficiary listed, the bond falls into the estate, and the redemption is typically handled by mail with the Treasury rather than at a credit union branch. For small estates that are not being formally administered, a qualifying relative can request payment using FS Form 5336 if total bond value is $100,000 or less. A court-appointed representative handles larger or formally administered estates.
What Credit Unions Can’t Cash
Electronic bonds held in a TreasuryDirect account cannot be cashed at a credit union, because the credit union has no way to access your digital holdings. You redeem those by logging into TreasuryDirect and using the Cash In function; the money arrives at your linked account by ACH. Partial redemptions of $25 or more are allowed as long as at least $25 stays in the bond. The same 12-month minimum hold and early-redemption penalty apply.3TreasuryDirect. Cash EE or I Savings Bonds
Series HH bonds also cannot be cashed at a credit union. They are redeemed only through Federal Reserve Banks or the Bureau of the Fiscal Service.8eCFR. 31 CFR Part 352 – Offering of United States Savings Bonds, Series HH The Treasury stopped issuing them in 2004, but existing holders should contact the Bureau of the Fiscal Service for instructions.
If No Credit Union Near You Will Cash It
If the local credit union is not a paying agent, or won’t process a particular bond, any bank or credit union that does hold paying agent status can cash it. Paying agent status is not limited to credit unions. Call and ask.
If nothing local works, mail the bonds to the Treasury. Complete FS Form 1522, get your signature certified if the total value exceeds $1,000, and send everything to Treasury Retail Securities Services, P.O. Box 9150, Minneapolis, MN 55480-9150.9TreasuryDirect. FS Form 1522 – Special Form of Request for Payment of United States Savings and Retirement Securities The Treasury places no cap on the number or value of bonds you can cash by mail.3TreasuryDirect. Cash EE or I Savings Bonds A 1099-INT arrives the following January.
Taxes on the Interest
Savings bond interest is subject to federal income tax but is exempt from state and local income tax.10TreasuryDirect. Tax Information for EE and I Bonds Most people defer reporting until they cash the bond, though you can choose to report the annual increase in value each year. Whichever method you pick, apply it consistently to all your EE and I bonds.11Internal Revenue Service. Publication 550 – Investment Income and Expenses In the year you cash a bond, any previously unreported interest is taxable, and you report it using the 1099-INT from the credit union or Treasury.12Internal Revenue Service. Savings Bonds 1
Interest can be excluded from federal tax entirely when you use the proceeds for qualified higher education expenses. The bond must be a Series EE or I issued after 1989, you must have been at least 24 years old when it was issued, and your modified adjusted gross income has to fall below annual IRS limits. The exclusion isn’t available if you file married filing separately. Claim it on IRS Form 8815.13Internal Revenue Service. Form 8815 – Exclusion of Interest From Series EE and I U.S. Savings Bonds