You can always tell when onions have stopped growing. The leaves will lose their color, weaken at the top of the bulb and flop over. Each year a few new gardeners watch the leaves die and wonder, "What's wrong?" There's nothing wrong; it's Nature's plan. The leaves' job is done - they've put the last of their energy into the bulbs.
Let most of your onion tops fall over by themselves - maybe 80% or 90% of them - then bend over the rest of the tops. Once they're down, leave the bulbs in the ground for another 10 days to two weeks to mature fully. It's not good to leave the onions in the ground for longer than two weeks after the tops die because they become open to organisms that can cause rot in storage, or they might even start growing again.
Pull your onions up on a sunny day if you can, then let them sit in the sun for another day or so to dry (in hot climates this usually takes just a few hours). This drying kills the root system at the bottom of each bulb. The roots will be like little brittle wires when they're dry.
Picking the right day to pull the onions can determine how well the onions will keep. If you harvest them after some rainy weather they'll have a lot more moisture in them and won't dry out as well.
Seed-producing onions are biennial and it will take two growing seasons to get onion seed. This article explains the seed-to-bulb-to-seed method.
Purchase onion seed and plant as you normally would in the spring. When purchasing seed, only buy open-pollinated or heirloom seeds. Hybrids and other types of seeds are not true seed and your results may be mixed. Some great places to buy these types of seeds are Seed Savers Exchange and Pinetree Garden Seeds.
You should order and grow enough onions so you have some for eating and some dedicated for seed saving. Onions can cross, so it's best to start with one variety at a time.
Plant your onion seed and do not pick or eat the ones you intend to harvest for seed.
At the end of the growing season when the onion tops are brown, drying and bent over, harvest the onion bulbs. This should be done before the first frost. Do NOT wash the onions, however you can shake the dirt off. Leave the tops on for braiding later.
Choose only the best bulbs for seed saving. Discard or eat others that may not overwinter well.
Spread onions out in a dry location, not touching one another, on a board or screen. If it looks like rain, you will have to move them to a location where they will not get rained on. Try to use a platform that allows air to circulate around the onions well.
Avoid drying the bulbs in direct sunlight in temperatures that are above 75 degrees. This can cause the bulbs to spoil or sunburn. Dry and cure the onions for 10-12 days before braiding.
After curing, you can braid the tops so the onions hang one above the other (not in clumps) and then hang them in a dark, dry storage area until spring.
A barn, potting shed or greenhouse are usually good places to hang them. Protect from the frost and do not store at room temperature. They should keep about 3-6 months and just begin sprouting come planting time in the spring. Sprouting times vary among different varieties.
In spring, when it's time to plant onions again, remove each onion by untwisting the braid and removing the dead, dried up tops. You will probably notice small green sprouts starting at the tops of the bulbs.
Plant the bulbs in your garden. It is interesting to watch the large, tube-like seed stalks grow bigger every day. Then one day you will notice tiny white flowers have formed--the flower head. They are about the size of a softball and remind one of popcorn balls. They are quite dainty and beautiful.
When the seeds form, the onion plant begins to dry. The flower head will begin to darken, turning almost solid black the seeds are dry and ready to harvest.
Using a brown paper bag, bend the onion stalk over and snip the entire flower head into the bag. Store in a dry area out of direct sunlight to finish drying process. To completely remove the seeds from the flower head, you can shake the bag to allow the loose seeds to drop into bag.
Any remaining seeds can be removed by other techniques; including, threshing, using wire screens to rub them over or stepping on the seed heads to break open the pods.
Screen any debris from your onion seed using seed screens or other screens from home. Place onion seed in a sealed glass canning jar or freeze in freezer bags to lengthen the life of the seed. If using the jar method, store in a dry, cool dark area without extreme temperature fluctuations.