Competitive misinformation

Friday, August 20th, 2004
Categorized as: Savings Bonds and competitive investments

Savings Bonds aren’t a bank product. Although banks, savings and loans, and credit unions often handle Savings Bonds transactions, they would much rather that you deposit your money with them than with the Treasury.

Here an example from the web site of the Digital Federal Credit Union. On this page they discuss their Savings Bonds transaction services, then add If return on your money is more important than tax savings, consider DCU’s Money Market and Certificate Accounts. Dividend rates generally exceed U.S. Savings Bond rates.

Is this true? New Series EE bonds currently pay 2.84% and new Series I pay 3.39%, then the rate will adjust to follow market trends every six months.

According to their web site, Digital Federal’s Money Market account currently pays 0.80% to 1.83%, depending on your balance. The high rate requires a deposit of $100,000.

The rates on their certificates of deposit range from 1.54% to 4.57%. To get the highest rate, you have to lock it in for five years and have your paycheck automatically deposited at this credit union.

When interest rates are at historic lows, adjustable rate Savings Bonds are competitive for their rates as well as for their tax advantages.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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