Savings Bond registration and possession basics

Tuesday, June 8th, 2004
Categorized as: Savings Bond registration changesSavings Bonds as gifts and prizes

My aunt has given me eight Savings Bonds. As I am the beneficiary of her gift, does she have to die before I can cash them?

Tom’s response

Being the beneficiary of her gift isn’t the same thing as being the beneficiary on the Savings Bond registration, which is what’s important.

Look at the name or names on each of the bonds. If a bond lists a Mail to: name, ignore it. That only shows who the bond was mailed to and means nothing in terms of ownership.

If there is just one name, that bond has what’s called a sole-owner registration. Only that person can cash the bond. When a sole-owner dies, the bonds are distributed according to the person’s will, or by state or federal law if there is no will.

If your aunt gave you bonds which are registered only in her name, she hasn’t legally given you anything. Before her death, she’s the only one who can cash them. After her death, her will or state law will determine who will own the bonds. In this case, the fact that you have possession of the bonds is legally meaningless.

If there are two names separated by OR, that bond has a co-owner registration. Either co-owner can cash the bond without the permission of the other. However, the IRS says the income tax on the interest earned by the bond should be paid by the principal owner, which it defines as the person who put up the money to buy the bond.

If your aunt gave you bonds which list both your names as co-owners, you can cash the bonds whenever you like. However, you many want to check with her on the tax issue, as most people don’t realize the tax implications of co-owner gift bonds.

If one of you dies, the bond will belong to the other and becomes like a sole-owner bond unless the registration is updated.

If there are two names separated by POD, that bond has a beneficiary registration. POD means payable on death. The first person named is the owner and the second is the beneficiary. The beneficiary has no ability to cash the bond unless the owner dies.

If your aunt gave you bonds on which she is the registered owner and you are the beneficiary, when she dies the bond becomes a sole-owner bond registered in your name. You can keep it as is, you can have the registration updated, or you can redeem it. You will need a copy of her death certificate to change the registration or to redeem it.

So the answer to your question, does she have to die before I can cash them?, is maybe, maybe not, or maybe you’ll never be able to cash them. It all depends on how they are registered. The fact that you have possession of the bonds is legally meaningless.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:


On December 4th, 2007 Karen Graff said:

Thank you for the information you gave me about the education deduction. You are wonderfully easy to understand! We have been buying savings bonds for our children with my husband as the owner and the child as the POD. Two of our children are no longer dependents. Would it be wise to have the bonds reissued to them rather than leaving them in my husbands name? What is the process and how long does it take? Is there down time in the bonds earning power or a change in the rate the bonds earn?

Our third child will need to use some of his bonds (issued in my husbands name with son as POD) for college tuition costs. 2007 will be his last year as a dependent on our taxes. What do we need to consider in deciding whether to cash in the bonds for him or have them reissued in his name and have him cash them in for himself? We will not be able to use the tax deduction on our income taxes and neither will he. We are still purchasing EE bonds on a monthly basis for our 4th and 5th children and will do so through their 18th birthday. The purpose is to have a nest egg for them upon their marriage unless, like my son, they need to money for college tuition and expenses. We are not very savvy investors and EE bonds were offered through my husbands employment. Are there better bond options than EE bonds that we might think about changing to? Thanks again for your patient and thorough answers to all my questions. Karen Graff

On December 5th, 2007 Tom Adams said:

Hi Karen – it’s technically possible to have the ownership of the bonds changed from your husband to one of your children. There is no penalty in terms of lost interest or changes to the interest rate.

However, it would be a taxable event for your husband. He’d get a 1099-INT reporting the interest earned through the date of the transfer. Moreover, when your child eventually cashed the bond, he or she would get a 1099-INT reporting all the interest the bond has ever earned. Without the right entries on his or her tax form, the tax will be paid a second time. In my book I call this the double taxation trap.

I recommend that your husband cash the bonds, hold back what he needs for taxes, and just give the rest of the money to the child.

The most important thing you can do is to have your husband talk to his payroll office and see if he can invest in Series I bonds rather than Series EE. The rate on EE’s is so low it’s clear the Treasury is just taking advantage of the people who invest in those.

Tom Adams

On January 28th, 2008 B.K. Lavin said:

Both of my daughters recieved savings bonds when they were born.They were gifts from an aunt on my husband’s side. The bonds had my girl’s names on them, but my x always had posession of the papers. Twenty five years later, my girls are hesitant to ask their dad to hand them over. They are 23, and 23 and could use any extra $. How can they trace these w/out daddy’s ok? They probably only have 3 or 4 each, but I’d like to know if they can get what is a gift to them. Thanks

On January 30th, 2008 Jean Hill said:

In 1992 I bought EE bonds for my each of my neices and nephews. They were each POD. I would like to give them the bonds now. How do I do that? Or can I retire them? Laater I bought I bonds with co-owners. Can I retire them?

On January 31st, 2008 Tom Adams said:

B.K. – the info you’re looking for is here.

Jean – If by “retire” you mean “redeem”, yes you can do that. You should hold back what you need for taxes and give them the rest of the money.

Tom Adams

On February 6th, 2008 Anne Long said:

My two teenage daughters have received a number of EE bonds over the years from an aunt. When she purchased them the SS numbers were sometimes correct, sometimes not.

My eldest has a severe disability and we are now applying for SSI on her behalf. To receive SSI she can not have more than $2000 in her name. (We have a trust.)

Q1 – While processing her SSI application will SSI see total bond assets on the basis of the name, or on the basis of the SS number?

Q2 – Can I transfer ownership of my daughter’s bonds the bonds to a special needs trust?

On February 6th, 2008 Tom Adams said:

Hi Anne – SSI definitely looks for Savings Bonds using SS numbers; I don’t know whether they look at names or not.

As far as the Treasury is concerned you can put the bonds in the trust, but I don’t know SSI’s rules about this.

Tom Adams

On March 2nd, 2008 Don said:

I have recently received an email from Treasury Direct saying that they are about to mail out security keys of some sort which we will need to access our accounts. Is this email legitimate, and do you know anything about this new security measure?

On March 3rd, 2008 Tom Adams said:

Don – it’s legitimate; there’s more info about it in the comments on this page.

Tom Adams

On January 2nd, 2009 Melanie said:

My grandmother has given me several series EE bonds over the course of my lifetime. However, on the first several, she was mistaken on my middle name. What do I need to do to be able to change the middle name to the correct one, or do I even have to?

On January 2nd, 2009 Tom Adams said:

Melanie – This situation isn’t as unusual as it would at first appear, although it will probably cause some extra hassle for you when you go to cash the bonds. I wouldn’t bother trying to deal with it before then.

Tom Adams

On March 24th, 2009 Mike said:

I am about to purchase some I bonds. I’m divorced and have 2 young adult kids ages 21 and 23. I wanted ti get your opinion as to how I should register them – either just to me, or POD to either kid, or with OR for either kid. Thanks


On March 24th, 2009 Tom Adams said:

Hi Mike – if you don’t put your kid’s names on the bonds, don’t have a will, and you remarry, the bonds would go to your new wife rather than your kids.

On the other hand, if you put their names on the bonds, they would go to your kids rather than your new wife no matter what your will says.

And if you don’t remarry it doesn’t make much difference, although a co-owner could easily cash the bond for you if you were incapacitated, but then they’d get the 1099-INT for the interest rather than you.

In other words, this decision is a lot more complicated than it at first appears.

Tom Adams

On May 3rd, 2009 Tina said:

I have a Series EE Savings Bond that I bought back in 1999 for an engagement of two friends. We lost contact and I’ve had the Savings Bond since. The couples name is on the bond, but it’s my old address and my SS# printed on the document. If I can’t locate the old owners is this bond worthless?

On May 4th, 2009 Tom Adams said:

Tina – No, I think you can get your money back, but you have to contact the Treasury directly. There’s more information here and here.

Tom Adams

On August 1st, 2009 Kathleen said:

Hi Tom,

My father has given my brother and I some EE Bonds. Currently they are POD, but he would like for us to use them now toward a purchase of a home. We do not want him to get hit with the taxes at the end of the year. A treasury rep at their 800 line said we can achieve this by having them reissued in co-names, then the person who actually cashs them will be responsible come tax time. He didn’t sound confident in his response. Is there really a sure way to avoid my father taking the hit come tax time? He currently falls below the poverty level. Thanks in advance for your advice!

On August 3rd, 2009 Tom Adams said:

Kathleen – The Treasury rep didn’t sound confident because although the Treasury will allow you to do this, the IRS insists it’s the original owner who owes the tax.

But it sounds like your father has a lower tax rate than you do, so it’s to your advantage to have him pay the tax, not you.

So have him cash the bonds, hold back what he needs for his taxes, and then give you the rest of the money. If you went through the hoops to get the bond money on your tax form, you’d pay more in tax and end up with less money.

Tom Adams

On November 13th, 2009 Kathy said:

I received two Patriot Bonds Series EE from my mother and my last name was spelled terribly incorrectly. My mother’s SS# was used on the bonds. Do I have to have the name corrected before cashing them and if so, how? Or can she cash them because her SS# is on them?

On November 16th, 2009 Tom Adams said:

Kathy – the info you’re looking for is here. The SSN on the bond is only used to track it if it is lost. Your mother can’t cash the bonds unless her name is on them.

Tom Adams

On March 16th, 2010 James said:

Hi, I have a friend who has some a couple saving bonds that he bought about 4 months ago to save but he lost his job so he asked me if I wanted to buy them. I need to know if theres any way I can get it changed from his name into my name.

On March 17th, 2010 Tom Adams said:

James – You cannot get the name on the bonds changed. Your friend could, however.

But be aware that if these are EE bonds, your friend paid half the face value of the bonds.

Tom Adams

On April 23rd, 2010 Janet Domeier said:

I am inheriting some Series EE bonds from my Aunt’s estate. I understand that I will use Form 1455 to reissue the bonds to me, but I also want to add co-owners to these bonds. And I undersatnd that I will need to complete Form 4000 for that. Who can cash these bonds with co-owners and who will have to pay the taxes? Can I gift any of these bonds to a charity and avoid paying taxes?

On April 26th, 2010 Tom Adams said:

Janet – you can cash the bonds and give the money to charity (and take a charitable deduction on your taxes), but you can’t give the bonds directly to a charity.

The 1099-INT reporting the interest income to the IRS will be issued in the Social Security Number of the co-owner who cashes the bonds, however, see this, too.

Tom Adams

Comments Closed

June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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