FY-2007 Savings Bond investments weak

Wednesday, April 25th, 2007
Categorized as: Savings Bond investment rate

Investments in Savings Bonds during the first six months of the government’s fiscal year 2007 (Oct-Sep) amounted to less than third of the dollars invested in Savings Bonds during the same months the previous year.

So far, FY-2007 investments are running at an annual rate of $3.4 billion. This is the lowest annual investment rate since FY-1981 ($3.36 billion) and FY-1982 ($3.11 billion).

So far this year, new investments have been almost evenly split between Series EE and Series I.

If you’re a reader of my book, Savings Bond Advisor, you have access to an online graph showing the level of Savings Bond investments since Series I bonds were introduced in FY-1999. Check your Book Notes for the link.

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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:

2 Comments

On May 3rd, 2007 Vince Gallo said:

Tom:

I wonder why the government is so hostile to U.S. Savings Bonds. Do you know why?

One would think that since our national household savings rate is so low that it would make these bonds more attractive. When the EEs were tied to the five year Treasury Note (90% of the average yield for the six months prior to issue)they were irrestible. Basing current EE bond rates on 10 year bonds & fixing that rate for at least 20 years is a sign that the government no longer favors these instruments. But Why??

On May 3rd, 2007 Tom Adams said:

Hi Vince – my guess would be that the country’s current leadership sees Savings Bonds as just another of FDR’s New Deal programs that needs to be dismantled or privatized.

For Savings Bonds, this can be accomplished simply by making them uncompetitive with bank CDs and other private investments. The change in how EE rates are calculated, with a bit of help from the inverted yield curve, seems to have accomplished that.

Tom Adams

Comments Closed

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 Savings-Bond-Advisor.com. 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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