When Did Cashing Savings Bonds Become So Impossible? (2024)

Hoping to cash in a paper savings bond that’s been lying around for a few decades? Set aside a lot of time for disappointment.

Those government-backed slips, doled out by generations of well-meaning grandparents to children expecting more exciting gifts, were long thought to be as good as cash. Shaped like dollar bills, savings bonds promise recipients a lucrative lesson in the value of prudence: The longer you keep them, the more interest they accrue and the more they will be worth when you finally cash them.

Of course it doesn’t matter how much something is theoretically worth if you can’t exchange it for money. And in the case of savings bonds, trying to do so increasingly results in a journey into a world of colliding, inconsistently enforced bank policies.

Like all bonds, savings bonds are essentially a loan, in this case, to the federal government. Though the paper slips may be labeled $100, they cost the purchaser only $50. The higher face value includes interest the loan accrues over years, which generally doubles the value of the bond over two decades and allows the holder to be paid out at the higher sum.

If this sounds simple, it should be, but since you’re lending to the U.S. government, the last step gets tricky. You can’t just waltz into any government building and demand your money. (Until 1977, post offices sold bonds, but never redeemed them.) You can either send your savings bonds to the Treasury — more on that later — or try cashing them at a bank.

The fine print on the back of savings bonds usually reads, “payable by any financial institution.” Hence, any bank should do.