How can I sell I bonds? (2024)

Key points

• You can sell back your electronic I bonds through the TreasuryDirect site.
• Selling I bonds before five years will result in losing the last three months of earned interest.
• You can try cashing in your bonds through your local bank, but not all institutions offer the service.

Investing in I bonds is a smart way to build your savings while also staying ahead of inflation.

These unique bonds offer a fixed rate of return plus an inflation-linked rate, making them an attractive option for long-term investors who want to protect their purchasing power.

With low minimum investments, tax-deferred interest and the added security of being backed by the U.S. government, I bonds offer a compelling opportunity for anyone looking to grow their savings while mitigating risk. Want to know how and when to sell? You’ve come to the right place.

What are I bonds? And how do I bonds work?

I bonds are a type of savings bond issued by the U.S. Department of the Treasury.

These bonds work by accumulating interest monthly. That interest is compounded semiannually. Every six months, the bond’s interest rate is applied to the new principal value. The result is the bond’s value increases not only with interest earned but with the compounding growth of the principal value over time.

What to know about selling I bonds

You can check your electronic holdings through TreasuryDirect by looking at the Current Holdings tab in your account.

If you have paper bonds, you can calculate the value of your paper bonds with the TreasuryDirect paper savings bond calculator. You’ll need to enter some bond information: serial number, denomination and issue date.

If you’re ready to cash in on your I bonds, you can get it all in one lump sum pretty quickly through the TreasuryDirect website.

Your I bond will earn interest over the course of 30 years. But you can cash out your bond before then, although some stipulations apply. Here are some guidelines for redeeming your I bond:

• You can redeem the bond after holding it for a minimum of 12 months.
• If you cash in an I bond less than five years old, you’ll lose the last three months of interest.

“Investors receive a lump-sum payment that includes all of your interest and principal,” says Akeiva Ellis, certified financial planner and founder of the financial website The Bemused. “You can also do a partial redemption of your electronic bonds, with a minimum of $25.”

If you cash only part of what the electronic bond is worth, you need to leave at least $25 in your account.

For paper bonds, if your local bank does take redemptions, they might have restrictions on how much you can cash at one time. You’ll also have to cash in the entire value of the paper savings bond.

If you can’t find a spot locally to cash your paper I bonds, contact Treasury Retail Services and fill out FS Form 1522.

No matter where you cash in the I bonds, you’ll need to provide proof of ownership or co-ownership. Banks will not cash the paper bonds if:

• Any information on the bond has been altered.
• The bonds are defaced in any way.
• There are noticeable irregularities in the appearance of the bond.
• If the bond is a photocopy.
• If they are suspicious of the person presenting them.

If you aren’t an owner, you’ll need to provide proof that you’re entitled to cash the bond. In other words, you’ll need evidence of your authority to cash the bond.

How do I sell I bonds?

If you’ve owned your electronic I bond for more than a year, you can cash your I savings bond online at any time. But there are some rules when it comes to cashing in on an electronic bond.

“You can only buy and sell your I bond online through the TreasuryDirect website,” says Kevin Matthews, author and founder of BuildingBread, a finance website geared toward millennials.

You’ll use FS Form 1522 to cash out via TreasuryDirect. The first step: You’ll need to log in to your account, select “ManageDirect” and use the link for cashing securities. Then you’ll need to include details, such as the issue date and the serial number of each bond. The Treasury will then deposit the cash into your savings or checking account in a few days.

For paper bonds, you cannot cash in a partial amount. You must redeem the physical paper bond for its entire value. You can do this in a couple of ways: Cash out the bond at your local bank or via TreasuryDirect. You’ll need to call your local bank to see if they cash out I bonds and their requirements for doing so.

With TreasuryDirect, you can redeem your bonds in a few short steps:

1. Do not sign the bonds.
2. Fill out FS Form 1552.
3. If cashing in more than $1,000, you must get your signature on the form certified. That means you’ll need to wait to sign it until you are with a person who is qualified to certify your signature. For example, if it’s an officer at a bank that may mean getting a legal imprint of the paying agent’s stamp or the institution’s seal.
4. Send the form and physical bonds to the address on FS Form 1552.

After processing, you’ll receive your funds.

Will I get a form for filing taxes?

When you cash out your bonds, you’ll get an IRS Form 1099-INT that shows the full amount of interest the bond earned.

Electronic bonds are posted every January, giving you the chance to file your taxes well before April’s Tax Day deadline. You can find it through the TreasuryDirect website on the ManageDirect page.

If you cash out your paper I bonds at a bank, the bank may provide the 1099-INT form. When you get the form it is up to the bank. They might provide it right away or send it to you at the end of the year. If you contact Treasury Retail Securities Services, you’ll get the form mailed.

How can I check if I have cashed an I bond already?

You can contact your local bank to see if your I bonds are eligible for redemption or have already been redeemed. Banks can’t always help, but they are a good first stop.

If banks can’t help, reach out to Treasury Retail Securities Services. You’ll need to include the serial number of the bond along with your written request. This is only good for owners or co-owners. If both of those people have died, you’ll need to send in copies of those death certificates along with your written request to:

Treasury Retail Securities Services
PO Box 9150
Minneapolis, MN 55480-9150

You’ll also need proof that you’re eligible to cash in the I bonds that you’re requesting redemption for. There are billions of dollars worth of unclaimed savings bonds that have stopped earning interest but haven’t been cashed.

Frequently asked questions (FAQs)