Cash In Series Ee Bonds: A Practical Approach

The possession of Series EE bonds is common among citizens due to their economic safety and modest rate of return. When you buy these bonds, you are essentially lending funds to the U.S. government. In return, you earn interest on your investment. However, there comes a point when you may be ready to cash in your Series EE bonds. This action can occur for various reasons: whether it’s funding a milestone event, handling an emergency or merely due to the bonds reaching maturity. This article weaves a comprehensive tapestry on the process to cash in Series EE bonds, while also highlighting the power of deposit.

Understanding Series EE Bonds

Before delving deeper into the cashing process, it’s crucial to understand what Series EE bonds are. These savings bonds are backed by the full faith and credit of the U.S. government. They are purchased at a discount and develop interest over time, eventually reaching their face value upon maturity. This period generally lasts 20 years.

When to Cash in Series EE Bonds

The ‘when’ element of cashing in Series EE bonds profoundly depends on the bondholders’ financial standing and their respective bonds’ maturity dates. Consider cashing your EE bonds once they’ve fully matured. Cashing them before maturity means receiving their current value, which might be drastically less than the face value. Additionally, bonds less than five years old attract an interest penalty of the last three months’ worth.

Procedure to Cash in the Series EE Bonds

The process to cash in these bonds is quite straightforward. If you hold the electronic Series EE bonds in your TreasuryDirect Account, you can simply cash them online. The funds will then be transferred to your registered bank account via an Automated Clearing House (ACH).

For paper bonds, you need to visit a bank. Make sure you bring valid identification. The financial institution will verify your information and process the redemption value. Depending on the banking institution’s policy, the redeemed cash may be directly deposited into your account or paid via check.

The Power of Deposit

Deposit Power is an element often underlooked by bondholders. The advantage here is that when cashing in your bonds, you can deposit the funds into your bank account. This action allows you to earn additional interest or invest the money to generate further income. Having the power to deposit also aids in managing your funds wisely, possibly spreading your wealth to other lucrative ventures like stock market investments, real estate, or any other preferred forms of investment.

Tax Considerations

It’s also essential to comprehend the tax implications associated with cashing in Series EE bonds. Any interest earned from these bonds is subject to federal taxes but is exempt from state and local taxes. However, there is a loophole to this clause. If you use the redemption money for educational purposes, it might be federal tax-free, given certain conditions are met.


Cashing in Series EE bonds is a significant financial decision. Before proceeding, take adequate time to analyze your financial situation. Recognize that prematurely cashing in means you might lose accumulated interest, affecting the bonds’ overall profitability. Moreover, don’t forget the power of depositing your redeemed cash into a bank account for safekeeping and additional growth.