If you've found U.S. savings bonds among a loved one's belongings, you're holding something valuable and surprisingly personal finance. What happens next depends almost entirely on whose names are printed on the bond.
Savings bonds were a favorite gift for decades, often tucked into a safe deposit box and forgotten. When the owner dies, those bonds don't simply vanish or transfer automatically in every case. How they pass to you, whether they go through probate, and who owes tax all hinge on a few details you can check in minutes. This guide walks you through it calmly, in plain language.
This is general information, not legal, tax, or financial advice. Bond rules and tax elections can be technical, so consider consulting a qualified attorney or tax professional for your specific situation.
First, identify what kind of bonds you have
There are two practical things to determine: the series and whether the bonds are paper or electronic.
- Series EE bonds earn a fixed rate and are guaranteed to double in value if held 20 years.
- Series I bonds earn a rate that combines a fixed rate with an inflation adjustment.
- Older series (like Series E or HH) may also turn up. Many older bonds have stopped earning interest, so don't assume an old bond is worthless or still growing.
Paper bonds are physical certificates you can hold. Electronic bonds exist only inside a TreasuryDirect account, which is the U.S. Treasury's online system. Since 2012, new bonds are almost always electronic, so check whether your loved one had a TreasuryDirect login. You may find clues in their important documents or password records.
How the names on the bond decide everything
A savings bond can be registered, or titled, in one of three basic ways. Look at the front of a paper bond, or the registration in TreasuryDirect, to see which applies.
| How the bond is registered | What happens when the owner dies |
|---|---|
| Single owner (one name, no survivor) | The bond becomes part of the estate and generally passes through the will or probate. |
| Co-owners ("A or B") | The surviving co-owner becomes the sole owner automatically and can cash or reissue it. |
| POD / beneficiary ("A POD B") | The named beneficiary becomes the owner once the original owner dies, outside probate. |
The phrase POD stands for "payable on death." It works much like a beneficiary designation on a bank account or life insurance policy: the named person inherits directly, no court involvement needed, as long as that person is still living. If you're new to these designations, our beneficiary designation guide explains how they override a will.
What if there's a co-owner or beneficiary still living?
This is the simplest case. The surviving co-owner or POD beneficiary already owns the bond. You don't need probate. You can choose to:
- Redeem (cash) the bond and receive the principal plus accrued interest, or
- Reissue the bond into your own name to keep it earning interest.
What if no survivor is named?
If the bond is in the deceased person's name alone, it belongs to the estate. The person handling the estate, the executor or administrator, has authority over it. If the total estate is small, Treasury offers a streamlined path using FS Form 5336 that can avoid formal court probate when the estate's bond value falls under a set threshold. Otherwise, the bonds are handled like other probate assets, and the executor distributes them according to the will or state intestacy law if there's no will.
The practical steps survivors take
Here's a clear order of operations once you know what you have.
- Gather the bonds and key facts. Collect paper certificates or TreasuryDirect login details, and note each bond's serial number, series, and registration.
- Get certified death certificates. You'll need at least one certified copy. See how to get a death certificate if you don't have one yet.
- Confirm your role. Are you a co-owner, a POD beneficiary, or the executor? This determines which form you use.
- Choose the right Treasury form. Most survivors redeeming paper bonds use FS Form 1522. Estates without a court-appointed representative may use FS Form 5336. Reissuing electronic bonds is handled inside TreasuryDirect.
- Decide: cash or keep. If the bonds are still earning interest, reissuing may make sense. If they've stopped earning, cash them so the money isn't sitting idle.
- Plan for the tax. Set aside part of the interest for federal income tax (more below).
Redeeming paper bonds
Many banks will cash paper savings bonds for a named owner or beneficiary, though fewer do so today, and some limit dollar amounts. If a bank won't help, you can mail the bonds to Treasury with FS Form 1522 and a certified death certificate. Signatures on the form may need to be certified by a bank or notary, depending on the amount.
Handling electronic bonds in TreasuryDirect
Electronic bonds are managed entirely online. TreasuryDirect has a dedicated process for transferring a deceased account holder's bonds to a survivor's or estate's account, after which you can redeem or hold them. Don't try to simply log in as the deceased; use the official survivor process so ownership is properly recorded. This is part of broader digital legacy planning, since access to online accounts is often the hardest part for families.
The tax that surprises survivors
Savings bond interest is subject to federal income tax, but it is exempt from state and local income tax. Most owners never pay tax on the interest while they're alive, because they defer it until the bond is cashed or matures. That means years of accumulated interest may have never been taxed, and that bill doesn't disappear at death.
You generally have two ways to handle it:
- The new owner reports all the interest in the year they cash or finally redeem the bond. This is the default and the simplest, but it can push a lot of income into one tax year.
- The executor elects to report interest up to the date of death on the deceased person's final income tax return. The new owner then owes tax only on interest earned after that point. This can be smart if the deceased was in a low tax bracket.
You'll receive a Form 1099-INT for the interest in the year the bond is redeemed. Because the choice between these methods affects real dollars, this is a good moment to talk to a tax professional. For the bigger picture of money and accounts after a death, see what happens to financial obligations and our broader estate settling checklist.
A note on planning ahead
If you own savings bonds yourself, you can spare your family this entire scramble by adding a co-owner or POD beneficiary now and writing down where the bonds and TreasuryDirect login live. A simple letter of instruction listing serial numbers and your wishes can save weeks of confusion later.