Cashing an I bond — redeeming it, in Treasury's word — takes a few clicks if the bond is electronic, and a form, an envelope and some patience if it is paper. Two dates decide whether you can cash it and what it pays, and the deferred interest then lands on your federal return for the year you cash.
This page covers the process and the cost, and prints no current I bond rate. How the rate is built and where Treasury publishes it is on the I bond interest rate page; what happens at the end of a bond's 30-year life is on when I bonds mature.
The two dates to check first
Twelve months. TreasuryDirect says "You can cash in (redeem) your I bond after 12 months", counted from the issue date: the first day of the month in which Treasury received your money. Before then the bond cannot be cashed at all, except in an area with an official disaster declaration or, the FAQ says, "in some cases" of financial hardship, for which the FAQ gives no criteria. The lock is why the emergency fund page keeps I bonds out of money you may need this year.
Five years. Cash before then and "you lose the last 3 months of interest": after 18 months, in Treasury's example, you get the first 15. The penalty can never take the value below what you paid, and it disappears at five years. For a bond under five years old, the value TreasuryDirect shows — in your account and in its Savings Bond Calculator — already has the three months taken off, so the figure on screen is the figure you receive.
Cashing electronic I bonds in TreasuryDirect
I bonds have been sold only in electronic form since 1 January 2025, and electronic bonds are cashed only in TreasuryDirect — "the one and only place to electronically buy and redeem U.S. Savings Bonds", in Treasury's words — at no fee. The steps, from TreasuryDirect's cashing page and its help pages:
- Log in to your TreasuryDirect account and open ManageDirect.
- Under Manage My Securities, click Redeem securities.
- Choose the security type, then tick each bond you want to cash on the Summary page — up to 50 in one transaction.
- With one bond selected, leave Redeem full amount or choose Redeem partial amount and enter the figure. With several selected, they all go to the same destination.
- Pick the destination from the drop-down: your linked bank account, or your Zero-Percent Certificate of Indebtedness (C of I).
- Click Review, check the details, then Submit. A confirmation page appears, and the pending redemption shows in Current Holdings.
Partial redemptions and the $25 floor
An electronic bond can be cashed in part: "Any amount of $25 or more to the penny." At least $25 must stay in the bond, and what you take is principal plus "a proportionate amount of interest", so you receive — and are taxed on — only the interest in the slice you cash. The rest keeps earning.
Where the money goes, and how long it takes
Payment goes "by ACH (direct deposit)" to your linked US bank account or to your C of I, whichever you choose. The C of I pays no interest; money redeemed from it to a bank "should be credited within two business days of the redemption date". For a savings bond redeemed straight to a bank, TreasuryDirect's help pages state no timing, so this page gives none.
A bond that reaches 30 years is cashed for you, but into the C of I on the next business day, not to your bank; when I bonds mature covers that step.
The login change: ID.me only, after 28 October 2026
TreasuryDirect says that after 28 October 2026 ID.me "will be the only method to log in to your TreasuryDirect account"; the traditional login works until then, and Login.gov cannot be used. After that, without an ID.me Wallet linked to the account you cannot sign in or cash bonds online. The ID.me FAQ says funds and investments "will remain safe", that access can be restored at any time by completing the setup, and that meanwhile you can manage the account "by submitting paper forms" — but not sign in, make purchases, set up new reinvestments, or view tax forms online. The form TreasuryDirect lists for redeeming savings bonds held in an account is FS Form 5512, signed in front of a certifying officer (the form says notary certification is not acceptable); mailed requests are slow at present (the table below). ID.me, Treasury reminds account holders, "will not charge you or ask for a credit card".
Cashing paper I bonds
Paper I bonds are older stock: TreasuryDirect says you may own paper I bonds issued before 2012 that were bought at a bank or through payroll savings, and they were also sold with tax refunds from 2010 until that option ended on 1 January 2025. Converting first is optional — "You can cash paper bonds just as they are" — and a paper bond is cashed for its entire value.
At a bank
TreasuryDirect suggests a bank where you already have an account, and three questions: will they cash your savings bonds, how much at one time, and what identification or documents they need. They are not obliged to: "Banks vary in how much they will cash at one time – or if they cash savings bonds at all." A bank that cashes your bond is responsible for your 1099-INT, on the spot or the following January.
By mail with FS Form 1522
Treasury has no limit on the value or number of bonds it will cash at one time, if they meet the requirements for cashing. Fill in FS Form 1522 — the current copy is marked "Revised April 2026" — and mail it with the bonds to the address on the form; payment is by direct deposit to the bank account you give on it. At a current redemption value of $1,000 or less your signature need not be certified: you enclose "a current copy of your driver's license, passport, state ID, or military ID". Above $1,000 you sign in front of a notary or a certifying officer, available, the form says, at US financial institutions including credit unions. Treasury mails the 1099-INT the following January. Every form named here is on TreasuryDirect's savings bond forms page.
Converting to electronic instead
Conversion is still offered: in your TreasuryDirect account, open a Conversion Linked Account under ManageDirect and follow How to Convert My Paper Bonds, without signing the back of the bonds. A converted bond keeps its ownership, maturity date, interest rate and interest schedule; converting one that is still earning is not a taxable event; afterwards it can be cashed online, in part if you wish. The catch is time.
How long the mail takes now
As posted on 14 October 2026, TreasuryDirect's home page carries a notice that "a high volume of requests" is delaying mailed requests, with these processing times for customers who have a TreasuryDirect account in their name (they will change):
| Request sent by mail | Processing time, as posted on 14 October 2026 |
|---|---|
| Unlocking an account or updating bank details | two weeks or longer |
| Cashing paper bonds you are named on | three months or longer |
| Paper bond transactions you are authorised to complete but that are not in your name | five months or longer |
| Converting paper bonds to electronic | nine months or longer |
| Trusts and other TreasuryDirect requests | ten months or longer |
| Locating lost, stolen or missing bonds | eleven months or longer |
Converting is therefore a slow road to cash: nine months or longer before the bond reaches your account, against three months or longer to cash the same bond by mail as it is. TreasuryDirect's home page carries the current notice.
Lost, stolen or destroyed bonds
Treasury Hunt, the search tool older articles still mention, is gone: "As of September 30, 2025, the Treasury Hunt® tool is no longer available", though some TreasuryDirect pages still link to it. For a paper EE or I bond that is lost, stolen, destroyed, mutilated or never arrived, the route is FS Form 1048 (revised March 2026), signed in front of a notary or certifying individual. It asks for each bond's issue date (exact, or a range of dates), face amount, serial number and the names and Social Security numbers on it, and lets you choose a replacement — always electronic, so a TreasuryDirect account is needed — or payment by direct deposit. The 12-month rule still applies, though Treasury may waive it if a disaster caused the loss. A bond found after Treasury has replaced or paid it belongs to the government and goes back.
When the owner has died
For an electronic bond, contact TreasuryDirect, which puts a hold on the account and says what to do. For a paper bond, the names on it decide. A named surviving co-owner or beneficiary takes the bond directly, outside the estate, and can leave it, cash it (FS Form 1522 may be completed by a surviving beneficiary) or have it reissued to them alone as an electronic bond. If the only person named has died, the bond belongs to the estate: above $100,000 of Treasury securities at the date of death a court must administer it; at $100,000 or less, with no court and no state small-estate procedure, a "voluntary representative" handles the bonds on FS Form 5336. IRS Publication 550 notes that an inherited bond's 1099-INT is not reduced for interest the person who died already reported, so it can show more interest than the new owner has to include on a return.
What cashing before five years costs
Everything in this section is illustrative: $10,000, a composite rate held at an illustrative 4.00% throughout — a real bond's rate resets every six months from its issue month, as the rate page explains — and Treasury's rounding, done on a $25 unit, ignored. The method is the regulation's (31 CFR 359.39). Interest accrues monthly and compounds semiannually, the rate applied every six months to a new principal that includes the previous six months' interest. Within a half-year, a month's value is the value at the start of the half-year multiplied by one plus half the annual rate, raised to the power of the months elapsed divided by six. Each month therefore earns slightly more than the one before, and a full half-year adds exactly half the annual rate.
Cashing at month 30, worked through (illustrative 4.00%)
| Months | Principal for the half-year | Interest per month, first to last | Interest for the half-year | Value at the end |
|---|---|---|---|---|
| 1–6 | $10,000.00 | $33.06 to $33.61 | $200.00 | $10,200.00 |
| 7–12 | $10,200.00 | $33.72 to $34.28 | $204.00 | $10,404.00 |
| 13–18 | $10,404.00 | $34.39 to $34.97 | $208.08 | $10,612.08 |
| 19–24 | $10,612.08 | $35.08 to $35.67 | $212.24 | $10,824.32 |
| 25–30 | $10,824.32 | $35.78 to $36.38 | $216.49 | $11,040.81 |
Thirty months earn $1,040.81. Cash at month 30 and months 28, 29 and 30 — $36.14, $36.26 and $36.38 — are forfeited: $108.78. You receive $10,932.03, the month-27 value; TreasuryDirect's displayed value already leaves them out. The penalty took about a tenth of everything the bond had earned.
The same bond, cashed at other months (illustrative 4.00%)
| Cashed at | Value with all interest | What you receive | Interest forfeited |
|---|---|---|---|
| Month 12, the earliest | $10,404.00 | $10,301.50 | $102.50 |
| Month 18 | $10,612.08 | $10,507.52 | $104.56 |
| Month 30 | $11,040.81 | $10,932.03 | $108.78 |
| Month 59 | $12,149.78 | $12,030.07 | $119.71 |
| Month 60 | $12,189.94 | $12,189.94 | none |
The penalty creeps up as the bond grows, because the lost months are charged on a larger principal, and then stops dead: on these numbers, cashing at month 60 rather than month 59 is worth $159.87 — the $119.71 penalty plus about $40 of a further month's interest.
Unlike some bank certificates' penalties, this one cannot reach what you paid: the regulation says the penalty never takes the value below the issue price. The CD penalty page shows the shapes banks give theirs, some of which do take principal, and HYSA vs CD vs T-bills sets a CD's exit penalty beside a Treasury bill's sale price.
The tax that follows
The interest is the difference between what you paid and what you receive. Under the IRS's Method 1, which applies unless you chose to report the increase each year, you postpone reporting until "the earlier of the year you cash or dispose of the bonds or the year in which they mature". So cashing a long-held bond puts all its deferred interest into one tax year — $932.03 for the month-30 illustration. Cashing $5,000 of that $10,932.03 instead would, on the FAQ's "proportionate" wording, carry $426.28 of interest and leave $5,932.03 in the bond, still earning.
The interest is reported on Form 1099-INT, box 3, "Interest on U.S. Savings Bonds and Treasury Obligations", as what you received less what you paid, so the three forfeited months never appear on it. For bonds in TreasuryDirect the form is in your account by 31 January of the following year; without ID.me you cannot view it online, though the FAQ says a copy can be requested by mail. Box 3 can show more interest than you have to include on your return: if you reported the interest yearly, for example, it is not reduced for amounts already included.
Federal income tax applies; state and local income tax does not, under the same statute, 31 U.S.C. 3124, that exempts Treasury bill interest from state and local income tax. Federal estate, gift and excise taxes and state estate or inheritance taxes still apply. A large deferred sum landing in one year can change what you owe; the underpayment safe-harbour rules are on the withholding page. IRS Publication 550 sets out these federal rules; your own return is a matter for you and a tax professional.
The education exclusion
Some or all of the interest can be excluded from federal income if the money pays for higher education, figured on Form 8815. The IRS conditions: a Series EE bond issued after 1989 or a Series I bond, in your name or yours and your spouse's as co-owners; an owner at least 24 years old before its issue date, so a bond registered to a child never qualifies; a filing status other than married filing separately; and the bond cashed and qualified expenses paid in the same year — tuition and fees for you, your spouse or a dependent, including contributions to a 529 plan or Coverdell account, but not room and board. If the proceeds exceed the expenses, only part of the interest is excluded. For 2026, Rev. Proc. 2025-32 starts the phase-out above $101,800 of modified adjusted gross income ($152,650 on a joint return) and ends the exclusion at $116,800 ($182,650 joint).
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