How Bonds Work

• Bonds are a form of debt instrument. Bond purchasers are creditors who loan money to the federal government for a period of time. EE bonds cost half of the face value and pay interest for up to 30 years. I bonds cost the face value and pay interest for 30 years. People can buy only $5,000 worth of EE or I bonds per calendar year, and both are sold in increments of $25 or more. You cannot cash in I and EE bonds within a year of purchase in Florida or any other state, and you must pay a penalty of three months' interest if you cash in EE or I bonds within five years of purchase.
  
  

Cashing In Bonds

• When bonds are presented for payment at a financial institution in Florida, a representative calculates the redemption amount by entering the issue date, face amount and bond type into a treasury bond payment calculator. Interest rates on bonds vary from year to year, so it takes some EE bonds longer than others to reach face value. Generally banks require people to present a valid form of ID such as a Florida drivers license, state ID or U.S. passport when redeeming bonds.
  
  

Complications

• People attempting to cash in bonds listed under other person's name must demonstrate that they have the legal right to do so. Someone named as a bond beneficiary should provide the bank with a death certificate for the deceased and their own ID. Someone cashing a bond on behalf a minor should sign the bond as the guardian of the child. Many banks are reluctant to cash bonds for non-customers on behalf of minors because the relationships are difficult to establish since kids do not usually have IDs. Additionally, people with non-Florida IDs or newly issued Florida ID cards often find banks unwilling to cash large dollar bonds due to security concerns relating to fraud.
  
  

HH Bonds and E Bonds

• The U.S. Treasury stopped issuing HH bonds in 2004, but many of the 20-year bonds remain in circulation. Bond holders cannot cash the bonds in at banks, but they can ask a bank to forward the bonds to the Federal Reserve for payment. Banks in large metropolitan markets in Miami and Orlando are usually able to facilitate this process.Typically, the Federal Reserve Bank disburses the funds via direct deposit. E bonds are no longer sold but have been replaced by EE bonds, which work in the same manner. People can redeem old E bonds at financial institutions throughout Florida.