Where to cash your bond depends on who issued it

The place you cash a bond is determined by the issuer — the organization that sold it to you. U.S. Treasury bonds go through the Treasury Department or a bank. Savings bonds issued by the government go through TreasuryDirect or a financial institution. Corporate bonds and municipal bonds typically go through the brokerage firm where you hold them, or through a bank if you bought them directly.

The process is straightforward once you know which issuer you're dealing with, but the steps differ enough that starting with the wrong institution wastes time. Your bond certificate or account statement will show the issuer's name — that's your starting point.

Key Takeaways

  • U.S. Treasury bonds and notes are cashed through TreasuryDirect (online), a bank, or a broker, depending on how you bought them.
  • Series EE and I savings bonds must be held for at least one year before cashing, and cashing before five years means you lose the last three months of interest.
  • Corporate and municipal bonds are typically cashed through the brokerage where you hold them, not directly from the issuer.
  • You'll need your bond certificate number or account login, and the process usually takes three to five business days for the money to reach your account.

Cashing Treasury bonds and notes through TreasuryDirect

If you bought your Treasury bond directly from the U.S. Treasury through TreasuryDirect (the government's online platform), you redeem it there. Log into your TreasuryDirect account, navigate to "Manage Securities," select the bond you want to cash, and choose the redemption date. The Treasury will deposit the money into the bank account linked to your TreasuryDirect profile.

Redemption through TreasuryDirect is immediate on the date you request — the money typically arrives within one business day. There are no fees. You do not need to contact anyone; the entire transaction happens in your account.

Cashing Treasury bonds through a bank or broker

If you bought your Treasury bond through a bank or brokerage firm rather than directly from the Treasury, you cash it with that institution, not with the government. Call the bank or broker, provide your bond certificate number or account number, and request redemption. They will handle the transaction with the Treasury on your behalf.

Processing time varies by institution but typically takes three to five business days. Some banks charge a small fee (usually $25 to $50) to redeem Treasury securities on your behalf, though many do not. Ask about fees before you request the redemption.

Cashing Series EE and I savings bonds

Series EE and I savings bonds have restrictions that Treasury bonds do not. You must hold the bond for at least one year before you can cash it at all. If you cash it before five years have passed, you lose the last three months of interest as a penalty.

To cash a savings bond, you can go to most banks and credit unions — they will redeem it for you on the spot. Bring the physical bond certificate and a form of identification. Some banks may require you to have an account with them, so call ahead. You can also redeem savings bonds through TreasuryDirect if you registered them there, using the same process as Treasury bonds.

If you've lost the physical certificate, you can still redeem the bond through TreasuryDirect or by contacting the Bureau of the Fiscal Service directly, though you'll need to provide proof of ownership.

Cashing corporate and municipal bonds

Corporate bonds and municipal bonds are not redeemed directly from the issuer in the way Treasury bonds are. Instead, you sell them through the brokerage firm where you hold them. Contact your broker and request to sell the bond. The broker will find a buyer on the secondary bond market and execute the sale.

The price you receive depends on current market conditions, not the face value of the bond. If interest rates have risen since you bought the bond, you may receive less than you paid. If interest rates have fallen, you may receive more. The sale typically settles in two to three business days, and the proceeds are deposited into your brokerage account.

If you hold the bond until maturity (the date printed on the certificate), the issuer will pay you the full face value automatically. You do not need to do anything — the payment will be deposited into your account on the maturity date.

What information you'll need to have ready

Before you contact your bank, broker, or TreasuryDirect, gather the following details: the bond certificate number (printed on the certificate itself or visible in your account), the face value or principal amount, the issue date, and the maturity date. If you're using TreasuryDirect, you'll need your login credentials. If you're going to a bank in person to redeem a savings bond, bring the physical certificate and a government-issued ID.

Having this information ready speeds up the process and prevents delays. If you cannot locate your certificate number, the institution can usually look it up using your name and the approximate purchase date, but this takes longer.

Taxes you'll owe on the interest earned

When you cash a bond, you owe federal income tax on the interest you earned, not on the principal (the amount you originally invested). The issuer will send you a Form 1099-INT in January showing the interest earned during the previous year. You report this on your federal tax return.

State and local taxes vary. Interest from U.S. Treasury bonds is exempt from state and local income tax. Interest from Series EE and I savings bonds is subject to federal tax but exempt from state and local tax. Interest from corporate and municipal bonds is subject to federal tax; municipal bond interest is usually exempt from state and local tax if you live in the state that issued the bond.

Frequently Asked Questions

Can I cash a bond before the maturity date?

It depends on the bond type. Treasury bonds and notes can be sold at any time through your broker or TreasuryDirect, though the price may be more or less than face value. Series EE and I savings bonds must be held for at least one year and lose three months of interest if cashed before five years. Corporate and municipal bonds can be sold anytime through your broker, but the price depends on market conditions.

What happens if I lose my savings bond certificate?

You can still redeem it. Contact the Bureau of the Fiscal Service with proof of ownership (such as a copy of the original purchase receipt or documentation showing you registered it). If the bond was registered in TreasuryDirect, you can redeem it directly through your online account without the physical certificate.

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

TreasuryDirect deposits money within one business day. Banks and brokers typically take three to five business days. The exact timeline depends on your financial institution and whether the transaction requires additional verification.

Do I have to pay taxes when I cash a bond?

You owe federal income tax on the interest earned, reported on a Form 1099-INT. The principal amount you invested is not taxed. Treasury bond interest is exempt from state and local tax. Savings bond interest is exempt from state and local tax but subject to federal tax. Corporate bond interest is fully taxable; municipal bond interest is usually exempt from state and local tax in your home state.

What if the bond issuer is no longer in business?

For Treasury bonds, the government guarantees payment regardless of market conditions. For corporate bonds, contact the bond's trustee (named on the certificate) or the company's investor relations department. If the company went bankrupt, you may recover less than face value depending on the bankruptcy proceedings. Municipal bonds are backed by the issuing municipality; contact them directly if you cannot reach your broker.