U.S. government bonds are basically notes that state you have loaned the government money in which they will pay you the principal plus interest in a certain period of time. Once that period of time is up called maturity you can cash it in your bond without penalties. This kind of investment is considered low risk, since the government should be able to pay all its lenders (you) their money back since they can raise taxes or print more money if needed. However, since the rise of inflation may be higher than the interest earned or if you are a foreign U.S. bond holder who sells when the dollar is low, the value once cashed may be less than anticipated. Regardless, if you own a treasury or savings bonds, there are a couple of ways to cash them in when you’re ready

Take your bond to the bank. Your bank will cash a government bond in your name, even if you are co-owner with another holder. You may need to show valid identification, like your driver’s license. If you have been an active customer at the bank for several months, you may not need to do this; however, if you go to a bank in which you do not have an account, expect to show identification and redeem no more than $1,000 dollars worth of bonds at any given time.

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Redeem your electronic bond online through the U.S. Department of Treasury, which has a website entitled TreasuryDirect, which is designed for individuals to manage their bonds. You can actually convert paper bonds to electronic bonds, buy new bonds and redeem your bonds by transferring the funds to your chosen bank account. To apply for a TreasuryDirect account, you will need your social security number, driver’s license or state ID number and expiration date, a bank account and routing numbers, and an email address. You will fill out some basic personal information, such as your name and contact information, then you will need to choose a password and an answer to a security question.

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Cash a bond in which your are the beneficiary at the bank. You will need to show proof that you are the beneficiary of the bond and also provide a copy of the death certificate of the name holder. Again, if you are not an active patron of the bank, you may only be able to cash up to $1,000.

Investing for Kids

Go to the bank to cash a minor’s bond. If you are the legal guardian of a child who has a U.S. government bond, you can cash it in. You may need to bring the child’s social security card or birth certificate with you.