July’s Savings Bond investments dip to 20-year low

Monday, August 14th, 2006
Categorized as: Savings Bond investment rate

Total investments in Savings Bonds in July were $248.8 million, the lowest one-month total since November 1983, according to Stephen Meyerhardt, spokesperson for the Treasury’s Bureau of Public Debt.

This investment level once again shows investors’ sensitivity to the headline interest rate for Savings Bonds. Just six months ago, in January, Savings Bond investments were reached $1.5 billion, a 10-year high. At that time the headline rate for Series I bonds was 6.73% and 86% of new investments went into I bonds.

Now the headline rate for I bonds is 2.41% and Series I bond investments made up just 44.3% of the total. Nonetheless, because today’s I bonds have a higher base rate than January’s I bonds (1.4% vs 1.0%), they are a much better deal for long-term investors.

Readers of my book have access to an online graph showing the level of Savings Bond investments since Series I bonds were introduced in 1998. 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:

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