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Did you know? US Savings Bonds Can Be Hard to Cash

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Since the end of 2011, paper U.S. Savings Bonds have no longer been sold at financial institutions because the federal government wants to increase electronic transactions with citizens and businesses. (For more information, go to treasurydirect.gov.) Redeeming paperless bonds is easy and often results in a direct deposit within 24 hours.

But it can be more challenging to cash paper bonds, such as matured Series I or Series EE federal savings bonds. Most banks will cash them for account holders, but only a few will cash them for walk-in customers. And none of the five local credit unions that we called cash savings bonds at all – for customers or noncustomers – and neither does American Savings Bank.

First Hawaiian Bank, Central Pacific Bank and Hawaii National Bank all cash an unlimited number of matured savings bonds for their regular customers. Bank of Hawaii limits its customers to cashing $5,000 a day in savings bonds. Only BOH, FHB and CPB cash savings bonds for walk-in customers and each limits transactions to $1,000 a day, which means people without an account can’t cash a savings bond that is worth more than $1,000 anywhere we could find in Hawaii.

The federal credit unions that said they do not cash savings bonds for anyone are Aloha Pacific, HawaiiUSA, Hawaii State, Hickam and University of Hawaii FCUs.

Ed Char, First Hawaiian’s VP of deposit products, says some people see U.S. savings bonds as good, long-term savings vehicles. “There is a tax advantage if used for higher education such as tuition or qualified expenses, as the interest will not be taxed by the federal government,” he says, advising people to consult a financial planner when considering bonds as a savings option.


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