Can I cash my deceased parents savings bonds?
Not every bank or credit union can cash savings bonds but they will know who can. If you are the one listed on the bond as the beneficiary, then you just take a copy of the death certificate with you to the bank and they will cash it for you.
The legal representative of the estate needs to complete a Request To Reissue United States Savings Bonds (FS Form 4000). If Series HH bonds are being reissued, the legal representative must complete and sign a Direct Deposit Sign-Up Form (FS Form 5396) for direct deposit of the interest payments.
To redeem your inherited savings bonds, you will need to contact the financial institution that holds the bonds. You will need to provide proof of identity and the bondholder's death certificate. Once the bonds have been redeemed, you will receive payment for the bond value and interest earned.
You can cash paper bonds at a bank or through the U.S. Department of the Treasury's TreasuryDirect website. Not all banks offer the service, and many only provide it if you are an account holder, according to a NerdWallet analysis of the 20 largest U.S. banks.
If you're cashing in a paper savings bond of $1,000 or less, you'll need FS Form 1522 and a copy of your driver's license, passport, state ID or military ID. If the bond amount is more than $1,000, you must have your signature certified by a notary or certifying officer.
Sometimes, the beneficiary is designated on the savings bond. The bond will then go to the beneficiary when the bond owner dies. The U.S. Treasury Department will require a certified death certificate and other documentation so that the beneficiary may claim the bond.
As a result, when inheritors redeem inherited bonds on which the tax has been deferred, they will owe tax on all the interest that has accumulated.
You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.
Cash in savings bonds with a named survivor
Find a bank or other financial institution that will pay for your bonds. Ask them what identification and other documents they need you to bring with the bonds. They may also have a limit of how much they will cash.
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|---|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
What is the easiest way to cash savings bonds?
- Online With a TreasuryDirect Account. Electronic Series EE and I savings bonds are redeemable online at the U.S. Treasury Department's TreasuryDirect website. ...
- Via Mail With FS Form 1522. ...
- At a Bank or Credit Union.
You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.
Banks and credit unions can redeem savings bonds over the counter. Find out more about becoming an agent and redeeming savings bonds.
Required: Cash savings bonds or notes that are eligible for payment for an established account holder at your bank who presents the proper identification and who seems worthy of your trust.
You can't just waltz into any government building and demand your money. (Until 1977, post offices sold bonds, but never redeemed them.) You can either send your savings bonds to the Treasury — more on that later — or try cashing them at a bank.
While the Treasury will not penalize you for holding a U.S. Savings Bond past its date of maturity, the Internal Revenue Service will. Interest accumulated over the life of a U.S. Savings Bond must be reported on your 1040 form for the tax year in which you redeem the bond or it reaches final maturity.
Remember that savings bonds can't be sold, traded or given away. The person whose name is on the bond is the only person who can cash it in (with some exception, which we'll get to shortly). First, you obviously need the bond itself (if it's an electronic bond, there's really no process at all.
If the executor doesn't include predeath interest on the decedent's final return, then the beneficiary owes federal income tax on all pre- and post-death interest on the earlier of the bond's maturity or redemption.
On the death of a policyholder who is also the last life assured, the bond automatically comes to an end and is encashed. Any gains on the bond will be taxed at that point and the tax is reported on the final tax return of the deceased, as a lifetime matter.
The interest on EE bonds isn't taxed as it accrues unless the owner elects to have it taxed annually. If an election is made, all previously accrued but untaxed interest is also reported in the election year. In most cases, this election isn't made so bond holders receive the benefits of tax deferral.
Why did I get a 1099 for inheritance?
This means that when the beneficiary withdraws those monies from the accounts, the beneficiary will receive a 1099 from the company administering the plan and must report that income on their income tax return (and must pay income taxes on the sum).
If you cash a paper savings bond by mailing it to Treasury Retail Securities Services, we mail you a 1099 by January 31 of the following year. (You can call us for a duplicate statement, if needed, beginning February 15.)
In general, you must report the interest in income in the taxable year in which you redeemed the bonds to the extent you did not include the interest in income in a prior taxable year.
If you still have a paper EE bond, check the issue date. If that date is more than 30 years ago, it is no longer increasing in value and you may want to cash it. See Cashing EE and I savings bonds. To find out how much your paper EE savings bond is worth, use our Savings Bond Calculator.
For paper savings bonds
The interest will be reported under the name and Social Security Number of the person who cashes the bond or who owns it when it matures. The 1099-INT will include all the interest the bond earned over its lifetime.
