Why Savings Bonds Are Different
U.S. savings bonds are unusual among inherited assets. They are not held at a bank or brokerage -- they are direct obligations of the U.S. Treasury. There is no local branch to walk into. There is no online statement for paper bonds. And for decades they were issued primarily as paper certificates that sat in safe deposit boxes, desk drawers, and shoeboxes.
Three series matter for inheritance purposes:
- Series EE -- The most common modern series. Issued at face value (since 2012) or at half face value (before 2012). Earn fixed or variable interest for up to 30 years.
- Series I -- Inflation-protected bonds. Earn a fixed rate plus an inflation rate that adjusts every six months.
- Series HH -- Discontinued for new purchases in 2004 but many are still outstanding. Paid interest semi-annually for 20 years.
All three series follow the same inheritance rules. The path you take depends not on the series, but on how the bond was registered (the names on the bond) and whether the bond is paper or electronic.
Step 1: Figure Out How the Bonds Were Registered
Pull out the paper bonds or log into the deceased's TreasuryDirect account. The registration on each bond tells you which inheritance path applies.
Sole Owner ("Mary Smith")
A bond registered to only one person, with no co-owner or beneficiary listed, becomes part of the deceased's probate estate. The executor must redeem it as part of the probate process, or all heirs must use FS Form 5336 if the estate qualifies for the small-estate path (covered below).
Co-Owner ("Mary Smith OR John Smith")
A bond registered with two people connected by "OR" is a co-ownership bond. Either person can cash it during the owner's life. When one dies, the survivor becomes the sole owner. The bond does not go through probate.
The surviving co-owner can either:
- Cash the bond, or
- Reissue it in their name alone (or with a new co-owner or beneficiary)
To reissue, the surviving owner files FS Form 4000 (for paper bonds) along with a certified death certificate.
Beneficiary ("Mary Smith POD John Smith")
A bond with "POD" (payable on death) or "P.O.D." between two names is a payable-on-death registration. The named beneficiary inherits the bond directly, bypassing probate. The beneficiary submits a certified death certificate plus the bond (for paper) or FS Form 5511 (for TreasuryDirect bonds).
Both Owners Deceased
If the bond shows a co-owner and both people have died, you treat it as the sole-owner case: it becomes part of whichever owner died last and follows that person's estate.
Step 2: Inventory What You Have
Before contacting Treasury or a bank, do a complete inventory. For each bond, record:
- Series (EE, I, or HH)
- Denomination (face value)
- Issue date (month and year)
- Serial number
- Registration (all names listed and how they are connected -- OR, POD, etc.)
- Social Security number printed on the bond (the owner's, not the co-owner's)
For TreasuryDirect bonds, the account dashboard shows all of this. For paper bonds, the bond face has every field except current value.
To check the current value (including accumulated interest) of any paper savings bond, use Treasury's free Savings Bond Calculator at treasurydirect.gov. Bonds continue earning interest for 30 years from issue date and then stop.
Why the Inventory Matters
The total value of all the deceased's Treasury securities determines which redemption path you can use. The small-estate shortcut (FS Form 5336) only applies if the total is $100,000 or less. Anything above that requires letters testamentary -- you cannot avoid probate for large savings bond holdings.
Step 3: Choose Your Redemption Path
Once you know what you have and how it was registered, pick the right process.
Path A: Surviving Co-Owner or Beneficiary
If you are a named co-owner or POD beneficiary:
For paper bonds under $1,000: Take the bonds, a certified death certificate, and your photo ID to your bank. Many banks (especially those that participated in the savings bond program) can redeem small bond amounts immediately. Call ahead -- some banks no longer handle bond redemptions at all.
For paper bonds over $1,000, or if your bank cannot help: Complete FS Form 1522 ("Special Form of Request for Payment of United States Savings and Retirement Securities Where Use of a Detached Request Is Authorized"). Have your signature certified by an officer of a bank, credit union, or trust company (a regular notary is not enough for amounts over $1,000). Mail the form, the bonds, and a certified death certificate to:
Treasury Retail Securities Services
P.O. Box 9150
Minneapolis, MN 55480-9150
For TreasuryDirect bonds: Open your own TreasuryDirect account if you do not have one. Then submit FS Form 5511 to have the bonds transferred into your account. Once in your account, you can redeem them online at any time.
Path B: Estate Qualifies as Small Estate (under $100,000)
If the bonds are in the deceased's name alone with no co-owner or beneficiary, and the total value of all the deceased's Treasury securities is $100,000 or less, you do not need to open probate just for the bonds. Use FS Form 5336 ("Disposition of Treasury Securities Belonging to a Decedent's Estate Being Settled Without Administration").
This form is signed by all "voluntary representatives" -- the heirs entitled to inherit. The form spells out who counts as an entitled heir based on whether there was a will and state intestate succession rules. All entitled heirs must sign.
Common situations:
- Spouse and adult children: The spouse and all adult children sign.
- Spouse only, no children: Just the spouse signs.
- No spouse, adult children only: All children sign equally.
- Minor children involved: A court-appointed guardian must sign on the minor's behalf. This often pushes the estate into probate territory, defeating the point of the form.
Signature certification requirements:
- Under $1,000 total: A notary public is sufficient
- $1,000 or more: A bank officer with a Medallion Signature Guarantee stamp is required
Send the completed form, the paper bonds (if applicable), and a certified death certificate to the Minneapolis address above. For TreasuryDirect bonds, attach a copy of the deceased's most recent account statement.
Path C: Estate Requires Probate (over $100,000 in Treasury securities)
If the bonds are in the deceased's name alone and the total Treasury value exceeds $100,000, the executor must include the bonds in the probate estate. The executor needs:
- Letters testamentary or letters of administration from the probate court
- The original bonds (paper) or access to the TreasuryDirect account
- A certified death certificate
- FS Form 1455 ("Request by Owner or Person Entitled to Payment or Reissue of United States Savings Bonds") signed by the executor with their signature certified
Treasury will issue payment to "the estate of [deceased's name]," which the executor deposits in the estate account and distributes according to the will.
The Federal Income Tax Trap Most Heirs Miss
Savings bonds accumulate interest, and that interest is taxable when the bonds are redeemed. Most owners defer the tax by holding the bonds until cash-in. When the owner dies, the accumulated interest has never been taxed -- and the executor has a one-time choice.
Option 1: Report All Accumulated Interest on the Final 1040
The executor can include all accumulated interest on the deceased's final personal income tax return (final 1040). This is often the better option when:
- The deceased had little income in the year of death
- The accumulated interest is small enough not to push the final return into a higher bracket
- You want to remove the interest tax burden from beneficiaries
Once reported on the final 1040, the bonds carry no further income tax liability. Whoever inherits and redeems them owes tax only on interest earned after the date of death.
Option 2: Pass the Interest Forward to the Beneficiary
The default option: the beneficiary reports the full accumulated interest as income in the year they cash the bond. This may be the better choice when:
- The deceased had high income in the year of death (the final return is already in a high bracket)
- The beneficiary is in a low bracket
- The beneficiary plans to hold the bonds for many years (deferring the tax)
The beneficiary reports the full interest on their personal return for the year they redeem. Treasury issues a 1099-INT in the beneficiary's name.
State Tax
Savings bond interest is exempt from state and local income tax under federal law. This is a significant advantage, especially in high-tax states.
What If Bonds Are Missing or Damaged?
Lost or Destroyed Paper Bonds
File FS Form 1048 ("Claim for Lost, Stolen, or Destroyed United States Savings Bonds") with as much information as you have. Treasury will search its records. Replacement is free, though Treasury now issues replacements only as electronic bonds in a TreasuryDirect account -- they no longer print paper bonds.
If you have no serial numbers, the search relies on the deceased's name, Social Security number, address, and approximate purchase dates. Treasury has records going back to the 1930s, but the further back the bond, the harder the search.
Bonds You Are Not Sure Exist
Treasury maintains a free database called "Treasury Hunt" at treasurydirect.gov that lists matured savings bonds that have stopped earning interest but were never cashed. Search by the deceased's Social Security number. This is worth doing for anyone over 50 -- many people forget about bonds they bought decades ago.
State unclaimed property databases also occasionally list bonds turned over by financial institutions or escheated by family members. Search the state where the deceased lived and any state where they previously lived.
HH Bonds Specifically
Series HH bonds were issued from 1980 to 2004 and pay interest semi-annually by check or direct deposit. After death, those interest payments need to stop and the bonds need to be reissued or redeemed. Notify Treasury immediately to prevent payments from going to the deceased's bank account and creating overpayment claims to repay.
Timeline for Treasury Mail Claims
Treasury's mail processing for savings bond claims has been slow since 2020. Realistic timelines:
- Acknowledgment of receipt: 4 to 8 weeks
- Processing of straightforward claims: 4 to 6 months from receipt
- Complex claims (multiple heirs, signature problems, lost bonds): 8 to 12 months
There is no online status check for paper claims. Treasury's customer service line accepts calls but the wait is often long. Plan the rest of your estate work assuming bond proceeds will arrive late.
For TreasuryDirect electronic bonds, transfers and redemptions process within days once submitted correctly, which is one reason consolidating paper bonds into TreasuryDirect can simplify future estate work.
How SwiftProbate Can Help
Savings bonds are easy to miss in an estate -- they do not appear on bank statements, do not generate monthly mail, and have their own forms separate from anything else. SwiftProbate's checklist prompts you to look for paper bonds, search Treasury Hunt by the deceased's Social Security number, and check for TreasuryDirect accounts as part of the full asset inventory. We also flag the federal tax election so the executor does not lose the option by accidentally filing the final 1040 the default way.
This article is for informational purposes only and is not legal advice. Consult a qualified attorney for guidance specific to your situation.