You must hold a U.S. savings bond (Series EE or I) for at least one year before cashing it in. While redeemable after 12 months, holding for at least five years is recommended to avoid a penalty of three months' interest. Bonds earn interest for up to 30 years.
Savings bonds are a government-backed, reliable investment that earn interest, reaching full maturity after 30 years. The different types of savings bonds are E/EE, I, and H/HH. Only E/EE and I bonds are still sold, but all types are able to be redeemed through the Federal Reserve.
Unclaimed savings bonds are eventually turned over to state governments under escheatment laws, where they become part of each state's unclaimed property program, allowing owners or heirs to search for them through state websites or unclaimed property databases like unclaimed.org/home/search-by-state/. The SECURE 2.0 Act now requires the Treasury to share data on matured, unredeemed bonds with states to help reunite them with their rightful owners, who can then claim them from their state.
If your savings bond from a Series other than EE, I, or HH has finished its interest-earning life, you could cash it and use the money for something else – a project, a financial need, or a new investment like an interest-earning savings bond or other Treasury security.
Unclaimed savings bonds are eventually turned over to state governments under escheatment laws, where they become part of each state's unclaimed property program, allowing owners or heirs to search for them through state websites or unclaimed property databases like unclaimed.org/home/search-by-state/. The SECURE 2.0 Act now requires the Treasury to share data on matured, unredeemed bonds with states to help reunite them with their rightful owners, who can then claim them from their state.
Under the non-administered estate rules, a competent surviving spouse, blood relative, legally adopted child or next-of-kin can complete Form FS 5336 and provide required documentation to transfer or redeem the bonds.
Yes, savings bonds are worth money as a low-risk, government-backed investment that accrues interest over time, often doubling in value (Series EE) or protecting against inflation (Series I), offering tax advantages, though they are best for long-term goals rather than quick cash access. Their value depends on the series (EE or I), issue date, and current interest rates, growing slowly but steadily over decades.
You can cash savings bonds without paying federal tax if you use the interest for qualified higher education expenses for yourself, spouse, or dependent, meeting specific income and age (owner must be 24+) rules on IRS Form 8815 and TreasuryDirect.gov. Otherwise, you can defer the federal tax until redemption or roll the proceeds into a 529 plan to avoid tax, though state/local taxes generally don't apply to savings bonds.
Whether you buy an electronic bond or a paper bond, you must specify who owns the bond. You may name yourself, a child, yourself and someone else (either as another owner or as the beneficiary), or indeed anyone you want to give the savings bond to as a gift.
Currently, the longest-dated U.S. Treasury is a 30-year bond maturing in 2054, offering a 4.50% yield. Globally, countries like Canada, Ireland, and Mexico have already issued 50- and 100-year bonds.
Warren Buffett views bonds as a safe haven for cash, often recommending a 90/10 portfolio (90% S&P 500 index fund, 10% short-term government bonds) for average investors, while Berkshire Hathaway itself holds large amounts of U.S. Treasury bills for capital preservation and to earn competitive yields, especially when stocks are expensive. He favors short-term Treasuries (T-bills) due to low interest rate risk and high liquidity, using them to park cash while waiting for better stock opportunities, rather than as a primary growth engine.
Yes, taxes on accrued interest are still owed on inherited savings bonds. The person who redeems the bond will be responsible for the tax.
Unclaimed savings bonds are eventually turned over to state governments under escheatment laws, where they become part of each state's unclaimed property program, allowing owners or heirs to search for them through state websites or unclaimed property databases like unclaimed.org/home/search-by-state/. The SECURE 2.0 Act now requires the Treasury to share data on matured, unredeemed bonds with states to help reunite them with their rightful owners, who can then claim them from their state.
The individual owns the U.S. Savings Bond if only their name appears on it. The Social Security Number shown on a bond is not proof of ownership. EXAMPLE: A U.S. Savings Bond title reads, “John Smith.” Only John Smith can cash that bond.
A savings bond can be redeemed anytime after at least one year; however, the longer a bond is held (up to 30 years), the more it earns.
If you have any stocks or bonds, or mutual funds you may be holding the actual certificates, or they may be in book entry form, or they may be held in an account at a stock broker. If the securities or accounts are in your name alone, they are probate property. There are several ways to keep securities out of probate.