EE Bonds, otherwise known as Series EE savings bonds, are low-risk, government-backed investments toyed by the U.S. Department of the Treasury. They are a simple and beneficial option to increase your net worth over time. However, redeeming these bonds–essentially cashing them in to take advantage of the accumulated interest–isn’t always an upfront and simple process. This article will provide a comprehensive guide on how to cash in your EE bonds.
First, it is crucial to understand that EE bonds must be held for a minimum term to earn interest. If you attempt to redeem a bond within the first year, you will not receive any interest. If you cash in a bond between one and five years, you will forfeit the last three months’ worth of interest. After five years, you can redeem your EE bonds without any penalty.
The exact process of how to cash in EE bonds depends on how they were issued. Paper bonds follow a different process compared to electronic bonds.
Electronic EE Bonds
If you have electronic EE bonds, they are likely to be in your TreasuryDirect account. To cash your electronic bonds, follow these steps.
- Log into your TreasuryDirect account.
- Click “ManageDirect,” located at the top of the Account page.
- Choose “Manage My Securities” from the dropdown menu.
- Select the bonds you wish to redeem and enter the amount you’d like to cash.
- Follow the prompts until the transaction is confirmed.
Through TreasuryDirect, the funds from the redemption should typically be in your linked bank account within 1-2 business days.
Paper EE Bonds
Redeeming paper EE bonds is a bit more old-fashioned but still simple. Most local banks and credit unions will cash in your paper bonds. The steps are as follows:
- Take your bond to a financial institution.
- Sign the request for payment on the back of the bond, in the presence of a bank officer.
- The bank will typically have the funds to you immediately.
Please ensure you bring a government-issued ID for identification purposes when redeeming paper EE bonds.
EE Bonds can be a valuable tool for long-term savings and investment. The decision to cash in these bonds should take into consideration the timing and the possible tax implications.
Aside from security, savings bonds can be a fantastic vehicle for saving for large purchases. One example is buying property with no deposit Sydney. By buying property with no deposit in a city like Sydney, a significant up upfront expense can be avoided and your savings bonds can help you afford your monthly obligations. Therefore, wisely purchasing and cashing EE bonds can support future sound investments.