Perhaps your grandparents gifted you with a savings bond on a special occasion, or you may have inherited one from an elderly relative. As long as the term of the bond is still running interest will keep accruing on it, but once the bond matures, you should go ahead and redeem it.

Find the maturity date

To see if your bond has matured, start by looking at the series name on the upper right corner of the bond. If it's a series E or series H bond, then it's matured, as all of those bonds are no longer being issued and all the existing ones have already hit their maturity date. If it's a series EE or series I bond, then it matures 30 years after the issue date. You can find the issue date right under the series name, on the upper right corner of the bond. Series HH bonds mature 20 years after the issue date. If the series name is anything else, then it's probably from an outdated series and has matured -- you can look up the series name on the Treasury Direct website to confirm.

US savings bonds

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Cash it in

Once you've confirmed that your savings bonds have indeed matured, you should cash them in. There are two ways to redeem a paper savings bond: cash it in at a local financial institution, or mail it to the Treasury Department. Redeeming the bonds at a local bank is usually the easier option; call first to confirm that they do indeed handle savings bonds, and ask what identification or other documents you need to bring with you.

It's typically easier to redeem bonds at a bank where you're an existing customer. If you've had an account with them for at least six months, often all you need to do is bring your ID and the bond. If redeeming the bonds at a local bank isn't an option, you can have the Treasury Department do it for you. You'll need to have your local banker certify your signature on the back of the bond, to prove that you're really you. Then, you mail the bonds, your Social Security number, and a canceled check to Treasury Retail Securities Site, PO Box 214, Minneapolis, MN 55480-0214. They'll direct-deposit the redemption amount into the bank account number listed on the canceled check.

Potential hurdles

In order to redeem a bond, you have to be listed as the owner or co-owner of that bond. If you inherit a savings bond and you're not listed on the bond as an owner, that bond is considered part of the purchaser's estate. You can redeem it by filling out FS Form 5336, getting your signature on the bond certified by a bank official, and mailing the form, the bonds, and the necessary accompanying paperwork to the Treasury Retail Securities Site as described in the previous section.

What to do with the money

One reason why some people delay redeeming matured savings bonds is that the accumulated interest generally becomes taxable. One of the best uses for the proceeds from a savings bond is for education expenses, because there's a tax break on savings bond interest for bond proceeds used to pay for qualifying higher education expenses. If you qualify, then you won't have to pay taxes on the interest.

If you don't have any qualified higher education expenses to finance, consider putting the money in your retirement savings account. You'll still have to pay interest on the bonds, but the deduction you can get from contributing to a tax-deferred retirement account like an IRA will help offset the taxes you pay on the bond redemption. Of course, you may already know what you want to spend the money on -- in which case, go to it!

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