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EE Bonds earn interest for 30 years, at which time they have matured and will stop
earning interest. You can redeem an EE Bond before the bond has matured and collect
the interest up that point. There is a minimum term of ownership of 1 year during
which the bond can not be redeemed. Between 1 year and 5 years, the redemption of
the bond results in a penalty of 3 months interest. The minimum holding period and
redemption penalties are in place because the U.S. Treasury considers savings bonds
as long-term savings vehicles for the average investor.
Redeeming Paper EE Bonds
Most financial institutions can redeem an EE Savings Bond. To redeem a bond, you
must sign the back of the bond to authorize redemption and turn over the bonds to
the bank. You will need to verify your identity, so remember to bring along identification,
such as a driver's license or passport. Some banks may require you to be a current
customer.
If you are redeeming more than $1,000 for cash, some banks may not allow the entire
amount to be processed in one day or otherwise limit your ability to redeem the
bonds. If this happens, you can redeem the bonds by sending them to your closest
Treasury Retail Securities Site. In this case, you must sign the request for payment
on the back of the bonds before a certifying officer at the bank, provide your social
security number, and then mail the bonds to your closest Treasury Retail Securities
Site. You can find the closest location by using the TreasuryDirect locator available
at http://www.treasurydirect.gov/FC/FCGateway?site=indiv&app=sav. You must mail
the bonds as the physical location does not process redemption transactions.
Redeeming Electronic EE Bonds
Electronic EE Bonds can be redeemed using the TreasuryDirect website, which is where
the bonds were either purchased or converted from paper to electronic form. The
redemption process takes you through several steps, from selecting the bond you
wish to redeem to selecting the bank account you wish the redeemed funds to be transferred
to.
Converting Paper Bonds to Electronic Bonds
Paper EE bonds can be converted to electronic bonds with TreasuryDirect. Once you
have a TreasuryDirect account, you can use the SmartExchange feature to convert
your bonds. You can read more about the SmartExchange program on the TreasuryDirect
site: http://www.treasurydirect.gov/indiv/research/indepth/smartexchangeinfo.htm
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Page last modified 1/31/2012