His Paper Savings Bonds Can Be Converted Into Electronic Ones, So They Can’t Be Lost in a Drawer or a Move

Quick Read

• Treasury lets you convert paper Series EE and I bonds into electronic ones for free, keeping the same owner, maturity date and interest rate.

• Electronic conversion automatically redeems fully matured bonds, so cashing a whole envelope in one year piles all that interest into a single tax year.

• Series H and HH bonds cannot be converted electronically, and co-owner bonds become Restricted Securities requiring the other owner’s consent to change names.

Paper savings bonds, often birthday gifts from decades ago, can often sit forgotten in an envelope for years. If you have paper bonds like that, the good news is that you can convert them to electronic bonds for free, so they sit in a TreasuryDirect account and can’t get lost in a drawer or a move.

Treasury Runs a Free Program for Converting Paper Bonds

TreasuryDirect is the government’s own website for buying and managing savings bonds. It lets you convert paper Series EE and Series I bonds into electronic bonds. Treasury says electronic bonds “can’t get lost, stolen, or destroyed.” A converted bond keeps the same ownership, maturity date, and interest rate. Treasury charges no fees to set up or use a TreasuryDirect account. You only pay the postage to mail the bonds in.

What Treasury and the Tax Code Say

Converting is optional, and Treasury says you can cash paper bonds as-is. The tax rules work the same either way. Savings bonds are exempt from the rule that taxes some bond interest every year as it builds up (26 U.S.C. § 1272(a)(2)(B)). If you’re like most people and pay taxes on the cash method, you report the interest when you receive it.

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You also have the option to report it every year instead, under 26 U.S.C. § 454(a). The interest is federally taxable but exempt from state and local taxes. If you pay qualified higher education expenses in the year you redeem bonds, 26 U.S.C. § 135(a) may let you exclude some or all of the interest, subject to income limits and other requirements. Eligible bonds include Series EE bonds issued after 1989 and Series I bonds issued when you were at least 24.

Find Out Whether Your Bonds Qualify Before You Mail Them

Treasury’s instructions sort bonds by the names printed on them: one name alone, two names with OR, one name with POD (or beneficiary) to a second name, and any others. “OR” means co-owners. POD means payable on death, which names the beneficiary.

Co-owner bonds become Restricted Securities, which means changing the names on them requires the other co-owner’s consent, though you can still cash them. If your minor child is a co-owner, put that in the Comments field so the bonds land in the child’s Minor Linked Account.

If you skip that step and move them later, the transfer is reported to the IRS for the tax year in which the transfer occurs. If someone named on a bond has died, you’ll leave that person off the registration and send a certified copy of the death certificate. Older Series H and HH bonds cannot be converted electronically.

How to Move Your Bonds Online

1. Open a free TreasuryDirect account.

2. From ManageDirect, set up a Conversion Linked Account, which appears as “My Converted Bonds.”

3. Gather the bonds and don’t sign the back. Sort them by the names printed on them.

4. Enter each set of names, then add each bond’s series, denomination, serial number, and issue date. One cart holds 50 bonds.

5. Print a manifest to mail with your bonds, sign it, and send the package in.

Once the bonds are converted, you can check their value any time and cash them in full or in part. You can also add a joint owner or change the beneficiary. If you want to buy more, new I bonds issued through April 2027 earn a combined rate of 5.51%, including a 1.4% fixed rate.

Bonds Older Than 30 Years Have Stopped Earning Interest

EE and I bonds earn interest for 30 years. When an electronic bond reaches that point, Treasury automatically pays you. A paper bond past final maturity earns no further interest. Fully matured bonds get automatically redeemed during conversion.

Watch for a Big Tax Bill When You Cash Them

Automatic payouts mean you’ll owe tax on all of a bond’s interest in the year of maturity. If you cash a whole envelope of bonds in one year, all that interest gets added to your income for that year. That can make more of your Social Security taxable. The IRS test adds half your benefits to all your other income and compares the total with a base amount of $25,000 for single filers or $32,000 for joint filers.

Spreading redemptions over several years keeps each year’s jump smaller (it’s the same kind of quiet-drain rule we mapped out alongside eight others in a free retirement tax guide).

Lost bonds are harder to get back now. Treasury retired its Treasury Hunt search tool as of September 30, 2025, and directs people searching for unclaimed bonds to state unclaimed-property programs through unclaimed.org. If you need to replace or redeem a specific lost, stolen, or destroyed savings bond, use FS Form 1048.

Help Avoid These 13 Retirement Mistakes Before They Derail Your Future

One investment mistake could create big risks for your retirement. Many investors make the same critical errors: being too conservative, making big bets on “sure things,” or paying excessive fees. Any of those blunders can endanger your hard-earned savings.

Now you can learn the mistakes even experienced investors make (and ways you can sidestep them before it’s too late) with this new guide: 13 Retirement Mistakes and How to Avoid Them from Fisher Investments. (sponsor)

Contact editorial@247wallst.com for any questions or corrections.