Bonds | When Should I Cash Them Out? (2024)

If you own I-Bonds, you might be wondering, “When should I cash out my I-Bonds”?

Three important things to know when cashing in I-Bonds:

1. You cannot cash out your I-Bond for 12 months after purchase.
2. New rates are announced in May and November by the Treasury. However, keep in mind that your personal interest rate on I-Bonds resets in 6-month intervals from the purchase of your bonds. For example, if you bought an I-Bond in January your bond resets its rate in July and January each year.
3. You lose the last three (3) months of interest when you cash out I-Bonds in the first five (5) years.

Keep in mind:

• If you hear the new rate and you’re not happy with it, there is a decent chance that the lower rate isn’t effective until your personal rate resets.
• If you don’t like the new interest rate and you have owned the bond for less than five years, you probably want to wait three (3) months after your own rate resets before you cash it out. This way you lose three (3) months of the low interest, not the higher rate you liked!

When Should I Cash Out My I Bond purchased from November 2021 – April 2022?

If you bought bonds during this time frame, the bond earned 7.12%, then 9.62%, then 6.48% on its 6-month renewal schedule. The new May rate of 3.38% may make you think “I want to cash out”. In order to keep the rate of 6.48%, you'll want to hold on to the I-Bond for three (3) months at that rate, so that when you cash out, you lose the lower rate and keep all your months of higher rates of interest. Below is a handy chart that shows if you bought an I-Bond in a particular month when is the earliest you should consider cashing out.

When Should I Cash Out My I Bond that was purchased from May 2022 – October 2022?

If you bought bonds from May 2022 – October 2022 that I-Bond earned 9.92%, then 6.48% on its own 6-month renewal schedule. The new rate of 3.48%, as of May, might have you considering your cash-out options. To keep the rate of 6.48%, you'll want to hold on to the I-Bond for three (3) months at that rate, so that when you cash out you lose the lower rate and keep your higher interest rates.

When Should I Cash Out My I Bond that was purchased from November 2022 – April 2023?

Bonds purchased between Nov 2022 and April 2023 included a fixed rate of .40% - the first I Bond issued since Nov 2019 to include a fixed rate component. Fixed rates can be attractive to longer-term investors as they guarantee the I Bond earns at least that rate for the life of the bond – even if inflation goes negative.

That being said, the fixed rate component for newly issued I Bonds as of this article is 1.30%. So if you are a longer-term investor, it may be worthwhile to redeem your old I Bond and re-purchase a new one to lock in the higher fixed rate. Shorter term investors should think about cashing in their I Bond at the 12 or 15-month mark.

What if I can’t remember when I purchased my I-Bonds?

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