How to Cash an I Bond on TreasuryDirect
To redeem an electronic I bond, open ManageDirect, choose Redeem securities, pick the bond and submit. Paper bonds are cashed with FS Form 1522.
An electronic I bond is redeemed inside your TreasuryDirect account: open ManageDirect, choose Redeem securities under Manage My Securities, select the bond, request a full or partial redemption and submit. A paper bond is cashed with FS Form 1522.
Nothing can be redeemed in a bond’s first 12 months1, and a redemption before five years forfeits the last 3 months of interest2. The redemption timing rules explain those two bands, and the I bond calculator shows which one a bond is in.
Electronic bonds
The steps above follow TreasuryDirect’s own account tour, which lists the sequence as “Select a security to redeem”, “Request full or partial redemption”, “Review your request and edit if necessary” and “Click ‘Submit’ and print your confirmation.”
Two constraints apply inside that flow. A redemption is for “any amount of $25 or more to the penny”, and if you cash only part of a bond “you must leave at least $253 in your account.”
The review step is the one to slow down on. It is the last point at which the amount and the choice between a full and a partial redemption can still be corrected.
Paper bonds
A paper bond cannot be split. TreasuryDirect states that “A paper savings bond must be cashed for its entire value.”
| Step | What TreasuryDirect requires |
|---|---|
| 1 | Ask your bank whether it cashes savings bonds, and what it needs from you |
| 2 | Obtain FS Form 1522 if you are cashing by mail |
| 3 | Complete the form; your signature must be certified when the value exceeds the amount stated on the form |
| 4 | Mail the form and the bonds to the address printed on the form |
Do not sign a paper bond in advance. Signature certification has to be witnessed by the certifying officer, which is the point of the requirement.
What the redemption is worth
The figure you see before redeeming is not gross. For a bond under five years old, “values shown in TreasuryDirect and the Calculator don’t include the last 3 months of interest”, because that interest is forfeited on redemption.
For a bond past its fifth birthday the displayed value is the full redemption value. A bond that has reached 30 years4 has stopped earning, so waiting longer adds nothing.
Two checks are worth making before the review step, because neither is reversible afterwards. The first is the bond’s age: a bond in months 12 through 59 forfeits three months of interest, and the amount forfeited depends on the composite rate in force during those months. The second is which bond you have selected: an account holding several issue months holds several different fixed rates, so redeeming an older bond and redeeming a newer one are not equivalent transactions.
A redemption is also a tax event for the whole accrued interest on the bond, not for the growth since you last looked. That is why a large single-bond redemption can land awkwardly in one tax year.
After the redemption
Interest becomes reportable for federal income tax in the year the bond is cashed, unless you had elected to report interest annually. For bonds held in TreasuryDirect, “your 1099-INT is available in your account by January 31 of the following year”, under Manage My Taxes in ManageDirect. The I bond tax rules set out the federal and state treatment.
How do I cash an I bond in TreasuryDirect?
Log in, open ManageDirect, and select Redeem securities under Manage My Securities. Then select the bond, choose a full or partial redemption, review the request and submit it.
Can I cash part of an I bond?
Yes, for electronic bonds. A partial redemption is for any amount of $253 or more to the penny, and must leave at least that much in your account; paper bonds must be cashed in full.
How do I cash a paper I bond?
Either at a bank that cashes savings bonds, or by mailing FS Form 1522 with the bonds to the address on the form. Your signature must be certified when the value exceeds the amount stated on the form.
Is the value shown in TreasuryDirect before or after the penalty?
After it, for any bond less than five years old. TreasuryDirect withholds the last three months of interest from the displayed value precisely because a redemption at that age forfeits it.
Can I cash an I bond before twelve months?
No. A Series I bond cannot be redeemed during its first 12 months1, counted from the issue date rather than the purchase date.
When do I get the 1099-INT for a redemption?
For a bond held in TreasuryDirect, by January 31 of the year after the redemption, in your account under Manage My Taxes. For a paper bond cashed at a bank, the form is mailed the following January.
Open the I bonds calculator →Sources
Information, not advice. This is the reading version; the interactive calculator and the full page are at https://thresholds.pages.dev/i-bonds/how-to-redeem/.