Is there a penalty for cashing savings bonds early?
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Is there a penalty for cashing savings bonds early?
The Treasury Department doesn’t charge any fees when you redeem savings bonds. After the five-year mark has passed, there is no penalty for early redemption.
Are savings bonds tax free if used for education?
Advantages. Backed by the full faith and credit of the United States government, the interest from these bonds is tax-free if used for qualified higher education expenses. Also, interest on Series EE and I savings bonds is usually exempt from state and local taxes.
Do you pay taxes on EE savings bonds?
Interest from EE U.S. savings bonds is taxed at the federal level but not at the state or local levels for income. The interest that savings bonds earn is the amount that a bond can be redeemed for above its face value or original purchase price.
Are savings bonds tax exempt?
Savings bonds are exempt from taxation by any State or political subdivision of a State, except for estate or inheritance taxes. Interest earnings are subject to Federal income tax. Interest earnings may be excluded from Federal income tax when bonds are used to finance education (see education tax exclusions).
What to do if you inherited savings bonds?
As the survivor, you have four options:
- Do nothing. The bond will continue to earn interest until the bond matures.
- Cash (redeem) the bond.
- Reissue: Have the bond reissued in the survivor’s name.
- Submit a certified copy of the owner’s death certificate, along with FS Form 5396 (download or order).
How do I know how much my series EE bonds are worth?
To find what your paper bond is worth today:
- Click the ‘Get Started’ Link on the Savings Bond Calculator home page.
- Once open, choose the series and denomination of your paper bond from the series and denomination drop down boxes.
- Enter the issue date that is printed on the paper bond.
- Click the ‘Calculate’ button.
