You redeem I bonds through TreasuryDirect, the U.S. Department of the Treasury's online platform where you hold them

I bonds are held electronically in a TreasuryDirect account, not in paper form. To redeem them, you log into your TreasuryDirect account, select the bonds you want to cash in, and request the redemption. The Treasury transfers the money to your linked bank account within one to three business days. You cannot redeem I bonds at a bank or through a broker — TreasuryDirect is the only way.

Before you redeem, check whether your bonds meet the one-year holding requirement. You must own an I bond for at least one year before you can redeem it at all. If you redeem before five years have passed, you lose the last three months of interest as a penalty. After five years, you can redeem without penalty.

Key Takeaways

  • I bonds must be held for at least one year before redemption, and redeeming before five years costs you three months of interest.
  • You redeem I bonds only through TreasuryDirect by logging into your account, selecting the bonds, and requesting a redemption.
  • The Treasury deposits the redemption amount into your linked bank account within one to three business days.
  • You can redeem I bonds in any amount — you do not have to cash in the entire bond if you do not want to.
  • The redemption is final once processed; you cannot undo it or reverse the transaction.

Logging into TreasuryDirect and locating your bonds

Go to treasurydirect.gov and click "Login" in the upper right. Enter your username and password. If you have not logged in recently, the Treasury may ask you to verify your identity using your Social Security number and other personal information.

Once logged in, click "Manage My Securities" in the left menu. You will see a list of all securities in your account, including I bonds. Each bond shows the issue date, series, denomination, and current value. The current value includes all interest earned to date.

Selecting bonds and requesting redemption

Find the I bond or bonds you want to redeem. Click the checkbox next to each one. You can select multiple bonds at once, or redeem just one.

After selecting, click the "Redeem" button. TreasuryDirect will show you the redemption value — the original purchase price plus all accrued interest, minus the three-month penalty if you are redeeming before five years. Review this amount carefully. If you are redeeming before the five-year mark, the screen will display the penalty amount separately so you can see exactly what you are losing.

Confirm the redemption. The Treasury will ask you to verify the bank account where the money should be deposited. This must be the same account linked to your TreasuryDirect profile. If you need to change your bank account, you must do that in your account settings before you redeem.

Timing and what happens after you redeem

Once you submit the redemption request, it is processed immediately. The Treasury removes the bonds from your account right away. The money itself arrives in your bank account within one to three business days, depending on your bank's processing speed.

You will receive a confirmation number on screen. Write it down or take a screenshot. The Treasury also sends a confirmation email to the address on file in your TreasuryDirect account. Keep this for your records.

The redemption is final. You cannot cancel it or reverse it after you submit the request. If you change your mind within a few minutes of submitting, contact TreasuryDirect customer service immediately at 844-284-2676, but there is no may provide they can stop the transaction.

Partial redemptions and splitting bonds

You do not have to redeem an entire bond. TreasuryDirect allows you to redeem a portion of a bond's value. When you select a bond and click "Redeem," you can enter the amount you want to withdraw instead of cashing in the whole thing.

For example, if you own a $10,000 I bond worth $12,500 in current value, you can redeem just $5,000 of that value. The remaining $7,500 stays in your account and continues to earn interest. The Treasury will deduct the three-month penalty (if applicable) from the amount you are redeeming, not from the portion you keep.

Tax reporting and what you owe

I bond interest is subject to federal income tax. You do not pay tax when you redeem — you pay it when you file your tax return for the year in which you redeemed the bond. The Treasury does not withhold taxes automatically.

After you redeem, the Treasury sends you a Form 1099-INT in January of the following year showing the interest you earned on that bond. Use this form when you file your taxes. State and local taxes may also apply depending on where you live; check with your state tax authority.

If you redeemed I bonds in multiple years, you will receive a separate 1099-INT for each year. Interest from bonds redeemed in 2024 appears on the 2024 form, and so on.

What to do if you cannot access TreasuryDirect

If you have forgotten your TreasuryDirect password, click "Forgot Username or Password?" on the login page. The Treasury will send a reset link to your email. If you no longer have access to the email address on file, call TreasuryDirect customer service at 844-284-2676. They can verify your identity and help you regain access to your account.

If your I bonds are held in a deceased person's account, the process is different. Contact TreasuryDirect directly with a death certificate and proof of your authority to act on the estate. They will guide you through the steps to redeem those bonds.

Frequently Asked Questions

What happens if I redeem an I bond before one year?

You cannot redeem an I bond before you have owned it for one year. TreasuryDirect will not allow the redemption. You must wait until the one-year anniversary of the issue date.

Can I redeem I bonds by phone or mail?

No. I bonds held in TreasuryDirect can only be redeemed online through your account. Paper I bonds (if you own any from before 2012) can be redeemed at a bank, but new I bonds are electronic only.

Do I pay taxes when I redeem, or later?

You pay taxes later, when you file your tax return. The Treasury does not withhold taxes at redemption. You report the interest on your federal tax return for the year you redeemed the bond using the Form 1099-INT the Treasury sends you.

Can I redeem I bonds in my child's account?

Only the account owner or an authorized representative can redeem bonds. If you are the parent or guardian of a minor's account, you can redeem on their behalf if you have the proper authorization set up in TreasuryDirect. Check your account settings to see who is authorized.

What if the money does not arrive in my bank account after three days?

Contact your bank first to confirm the deposit has not arrived. If your bank shows no incoming transfer, call TreasuryDirect at 844-284-2676 with your redemption confirmation number. They can trace the payment and resend it if needed.