To redeem I Bonds, log in to TreasuryDirect and use the ManageDirect tab if you hold them electronically, or take paper bonds to a bank where you have an account (or mail them to the Treasury with FS Form 1522). You cannot cash any I Bond issued after January 2003 during its first 12 months, and if you redeem before five years you lose the last three months of interest. Interest is taxed federally in the year you cash the bond, but not by your state.
When You Can Cash an I Bond
For bonds issued on or after February 1, 2003, the minimum holding period is 12 months from the issue date. Bonds issued on or before December 1, 2002, had a six-month minimum, though very few of those remain in circulation.1eCFR. 31 CFR Part 359 Offering of United States Savings Bonds, Series I
Cash any I Bond before the five-year mark and the Treasury takes back the last three months of interest. Redeem at nine months and you get six months’ worth. The penalty never dips into your original purchase amount; it only trims your earnings. After five years, you get the full accumulated value with no penalty.1eCFR. 31 CFR Part 359 Offering of United States Savings Bonds, Series I
Check the Bond’s Value First
For paper bonds, use the Treasury’s free Savings Bond Calculator. Enter the series, denomination, and issue date to see the current redemption value with any early-redemption penalty already applied.2TreasuryDirect. Calculate the Value of Your Paper Savings Bonds For electronic bonds, TreasuryDirect displays each bond’s current value on your account page, and the figure already reflects the three-month penalty if the bond is under five years old.3eCFR. 31 CFR Part 359 Subpart C Book-Entry Series I Savings Bonds
How to Cash Electronic I Bonds
Electronic redemptions run entirely through the TreasuryDirect website. Log in, open the ManageDirect tab, and under “Manage My Securities” click “Redeem securities.” Select the bonds you want to cash. You can redeem up to 50 securities in a single transaction.4TreasuryDirect. How Do I…?
Redeeming a single bond, you can cash it fully or in part. A partial redemption must be at least $25 and must leave at least $25 of value in the bond.5TreasuryDirect. Cash EE or I Savings Bonds If you redeem multiple bonds at once, each has to be cashed in full, and all the money goes to the same linked bank account. Confirm the account, submit, and expect the funds to land within two business days.4TreasuryDirect. How Do I…?
How to Cash Paper I Bonds
The easiest route is your own bank or credit union. Bring the paper bond and a government-issued photo ID such as a driver’s license or passport. Established customers can usually get the redemption processed on the spot, with the proceeds deposited straight into their account.
If your bank cannot handle it, you’ll need to mail the bond to the Treasury with a completed FS Form 1522, “Special Form of Request for Payment of United States Savings and Retirement Securities.”6TreasuryDirect. FS Form 1522 The form asks for your name, mailing address, Social Security Number, the bond’s serial number and issue date, and the bank account for the deposit.
When the total redemption value exceeds $1,000, you must sign FS Form 1522 in front of a certifying officer, typically found at banks, credit unions, or through a notary public. The certification verifies your identity.6TreasuryDirect. FS Form 1522 Make sure the name on the form matches the name on the bond exactly, double-check your routing and account numbers, and mail the package with tracking. Treasury processing typically takes several weeks after they receive it.
If Paper Bonds Are Lost, Stolen, or Destroyed
You can still collect. The Treasury uses FS Form 1048 for these situations. If you know the serial number, fill out the standard form. If you don’t, and the bond was issued in 1974 or later, use the Treasury Hunt tool on TreasuryDirect; a match produces a special version of FS Form 1048 that you sign in front of a notary or certifying officer before mailing to the address printed on the form. A separate version exists for bonds issued before 1974.7TreasuryDirect. Get Help for Lost, Stolen, or Destroyed EE or I Savings Bonds The Treasury verifies its records and either replaces the bond or pays you.
Cashing Bonds After the Owner Dies
What happens next depends on how the bond was registered.
- Co-owner bonds: when one co-owner dies, the survivor becomes sole owner and can request payment or reissue by providing proof of death.8eCFR. 31 CFR 315.70
- Beneficiary bonds: if the owner dies and a named beneficiary survives, the beneficiary becomes sole owner on proof of death.8eCFR. 31 CFR 315.70
- Sole owner with no beneficiary: the bond becomes part of the estate and moves through estate settlement.
For small estates avoiding formal probate, FS Form 5336 lets a voluntary representative request payment without court involvement, but only if the deceased person’s total Treasury securities are worth $100,000 or less at death. The representative must be a surviving spouse, blood relative, or legally adopted child, and at least 18 years old. The form cannot be used to move bonds into a trust.9TreasuryDirect. FS Form 5336
Taxes on the Interest
Interest on I Bonds is subject to federal income tax but exempt from state and local income taxes.10eCFR. 31 CFR Part 359 Federal estate and gift taxes and state inheritance taxes also apply.
Most holders defer the tax until they cash the bond or it reaches final maturity at 30 years. For the year you receive the interest, the Treasury issues IRS Form 1099-INT with the total. Electronic bondholders can download it from TreasuryDirect early the following year and report the interest on that year’s federal return.11TreasuryDirect. Tax Information for EE and I Bonds
You do have the option to report interest each year as it accrues instead of waiting.12Office of the Law Revision Counsel. 26 U.S. Code 454 If you switch to annual reporting, you must apply it to every savings bond tied to your Social Security Number, and you have to report all previously accrued but unreported interest in the year of the switch.11TreasuryDirect. Tax Information for EE and I Bonds
Skipping the Tax With Education Expenses
You may be able to exclude I Bond interest from federal income tax entirely by using the proceeds for qualified higher education expenses. Eligible costs include tuition and required fees at eligible colleges, universities, and vocational schools, as well as contributions to a 529 plan or Coverdell Education Savings Account. Room and board do not qualify.13Internal Revenue Service. Form 8815
Two conditions had to be true at purchase:
- You were at least 24 years old when the bond was issued.
- The bond is registered in your name, or jointly with your spouse. A bond registered in a child’s name does not qualify, even if the child is the one going to college.14TreasuryDirect. Using Bonds for Higher Education
The exclusion phases out at higher incomes. For 2026, the phase-out begins at a modified adjusted gross income of $101,800 for single filers and $152,650 for joint filers, and disappears entirely at $116,800 and $182,650 respectively.15Internal Revenue Service. Rev. Proc. 2025-32 Claim the exclusion by filing IRS Form 8815 with your tax return for the year you redeem the bonds.