When can you cash in an EE savings bond?

Holders of EE savings bonds must hold them for at least one year before cashing them out. EE savings bond holders who redeem them prior to five years after the purchase date suffer a penalty, which forfeits the three most recent months of interest.

After a period of five years, the bonds can be cashed out with no financial penalty. As of 2015, an EE savings bond earns interest on the initial investment value for up to 30 years. Earnings made on this type of savings bond are subject to federal taxes, though they are exempt from state and local taxes.