How to Cash In a Bond Before or At Maturity

The basic steps to redeem a bond

To redeem a bond, you contact the issuer or the financial institution holding it, provide proof of ownership, and request the cash value. For U.S. savings bonds, you go to a bank or the Treasury Department's website. For corporate or municipal bonds, you contact your broker or the bond's transfer agent. The process takes a few days to a few weeks depending on the bond type and who holds it.

The timing matters: you can redeem most bonds at maturity without penalty, but redeeming early often costs you money. Some bonds have a lock-in period where you cannot redeem them at all. Others charge a surrender fee or pay you less than face value if you cash out before the maturity date.

Key Takeaways

Savings bonds can be redeemed at most banks or through TreasuryDirect.gov, but you must wait at least one year and lose three months of interest if you cash out before five years.
Corporate and municipal bonds are redeemed through your broker or the bond's transfer agent, not directly from the company that issued them.
Redeeming before maturity usually means receiving less money than you would at maturity, because you forfeit accrued interest or pay an early-redemption fee.
You will need proof of ownership — the bond certificate itself, account statements, or registration documents — to complete the redemption.
The redemption process typically takes three to ten business days once you submit your request, though some bonds settle faster.

Redeeming U.S. savings bonds

U.S. savings bonds come in two main types: Series EE and Series I. Both can be redeemed at most banks or credit unions, or online through TreasuryDirect.gov if you own them electronically. You will need the bond certificate or your TreasuryDirect login credentials.

There is a one-year holding requirement: you cannot redeem a savings bond until at least one year after purchase. If you redeem between one and five years, you lose the last three months of interest. After five years, you can redeem without penalty. At maturity — 20 years for Series EE, 30 years for Series I — the bond stops earning interest, and you should redeem it or it becomes worthless.

For paper bonds, take them to a bank or credit union with your ID. The institution will verify the bond, confirm you are the registered owner, and process the redemption. For electronic bonds in TreasuryDirect, log in, select the bond, and request redemption; the money goes to your linked bank account within a few business days.

Redeeming corporate and municipal bonds

Corporate bonds and municipal bonds are not redeemed directly from the issuing company. Instead, you work through your broker — the financial firm where you bought the bond or where your account is held. Call your broker's bond desk or log into your account and request a redemption or sale.

If you hold the bond to maturity, the issuer pays the face value plus any final interest payment to your broker, which then deposits it into your account. If you redeem early, your broker sells the bond on the secondary market, and you receive the current market price, which may be higher or lower than what you paid. This is different from savings bonds: there is no fixed early-redemption penalty, but the market price can work against you.

The redemption settles in one to three business days for most corporate bonds and three to five business days for municipal bonds, depending on your broker's procedures.

What happens if you redeem before maturity

Redeeming early usually costs you money. With savings bonds, you forfeit three months of interest. With corporate and municipal bonds, you sell at the current market price, which reflects interest rates and the issuer's credit quality at the time of sale. If interest rates have risen since you bought the bond, the market price will be lower than face value.

Some bonds have call provisions, which allow the issuer to redeem the bond before maturity. If a bond is called, you receive the call price (usually face value or slightly higher) on the call date, and your investment ends. This typically happens when interest rates fall and the issuer wants to refinance at a lower rate. You cannot prevent a call, but you can see whether a bond is callable by checking the prospectus or asking your broker.

A few bonds have surrender charges or redemption fees, particularly older corporate bonds or bonds issued by smaller companies. These fees are disclosed in the bond's terms, so check before you buy.

Proving ownership and providing required documents

To redeem a bond, you must prove you own it. For paper savings bonds, bring the physical certificate and a government-issued ID to a bank. For electronic savings bonds, your TreasuryDirect login is your proof.

For corporate or municipal bonds held at a broker, your account statement is your proof of ownership. If you hold a paper bond certificate, bring it to your broker along with a signed redemption request. Some brokers require a medallion signature may provide — a special stamp from a bank or broker confirming your signature — if the redemption amount is large or if you are transferring the bond to another person.

If the bond is registered in someone else's name or held in a trust or estate, you will need additional documents: a death certificate for an estate, trust documents for a trust, or a power of attorney if you are redeeming on behalf of someone else. Ask the issuer or your broker what they need before you submit anything.

Tax consequences of redeeming a bond

When you redeem a bond, you owe federal income tax on the interest you earned. The amount depends on the bond type. Series EE and Series I savings bonds earn interest that is subject to federal tax but exempt from state and local tax. If you use the proceeds for education expenses, you may be able to exclude the interest from taxable income under the Education Savings Bond Program, but you must meet specific requirements.

Corporate bonds are fully taxable at the federal, state, and local level. Municipal bonds are usually exempt from federal tax and often from state and local tax if you live in the state that issued them. When you redeem, you owe tax on any gain (the difference between what you paid and what you received) if you sold the bond before maturity, or on the interest if you held it to maturity.

The issuer or your broker will send you a 1099 form reporting the interest or gain, which you report on your tax return. Keep records of what you paid for the bond and when you bought it so you can calculate the gain accurately.

What to do if you cannot find your bond or lost the certificate

If you own a paper savings bond but cannot locate the certificate, contact the Treasury Department's Bureau of the Fiscal Service. They maintain records of all registered savings bonds and can issue a replacement or process a redemption based on your records. You will need to provide your Social Security number, the approximate purchase date, and the series and denomination.

If you lost a corporate or municipal bond certificate, contact your broker or the bond's transfer agent (the company that maintains the official record of who owns the bond). They can reissue the certificate or process a redemption directly. You may need to file a lost-bond affidavit and post a bond (a financial may provide) if the amount is large, though many brokers waive this for electronic transfers.

If you inherited a bond and do not know where it is, check with the deceased person's bank, broker, or safe deposit box. The executor of the estate should have records of all financial accounts.

Frequently Asked Questions

Can I redeem a bond if I do not have the physical certificate?

Yes. If the bond is registered electronically (in TreasuryDirect or with a broker), you do not need the certificate — your account login or statement is proof. If you own a paper certificate and lost it, contact the issuer or transfer agent to request a replacement or direct redemption.

What if the bond issuer is out of business or the company was acquired?

For corporate bonds, the acquiring company typically assumes the obligation to pay. Contact your broker to confirm the current issuer and redemption process. For older bonds, the transfer agent (listed on the certificate) handles redemptions even if the original company no longer exists.

How long does it take to receive the money after I request redemption?

Savings bonds redeemed at a bank are usually processed the same day. TreasuryDirect transfers take three to five business days. Corporate and municipal bonds settle in one to five business days depending on the bond type and your broker's procedures.

Do I have to redeem the entire bond, or can I cash in part of it?

Savings bonds are redeemed as a whole — you cannot split one bond. Corporate and municipal bonds are typically issued in denominations of $1,000 or $5,000, and you redeem the full amount. Some brokers allow you to sell a portion of a bond holding if you own multiple bonds.

What happens to the interest if I redeem a bond early?

With savings bonds, you lose the last three months of interest if you redeem before five years. With corporate and municipal bonds, the interest accrued up to the redemption date is included in the price you receive. If you redeem between interest payment dates, you receive accrued interest plus the principal.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.