Savings Bond Alert #008

New Series EE rates on older bonds range from 2.83% to 4.00%

The U.S. Treasury has announced that rates for older Series EE Savings Bonds as they enter their next rate period will range from 2.83% to 4.00%. This compares to the 3.25% rate announced November 1 for new Savings Bonds.

This year, Savings Bonds that were issued in 1992 are moving into a new maturity period, which allows the Treasury to adjust the guaranteed rate on these bonds to the current 4%. With this announcement, the final four issues that had been paying 6% will be adjusted down to 4% when they enter their next six-month rate period.

Of the 298 active issue dates through October 2004, 46% will earn 4% interest during their next rate period. 30% will earn the announced 3.25% rate.

20% of the active issue dates will earn less than the announced 3.25% rate; these older bonds are candidates for redemption and reinvestment in new Savings Bonds. If you’d like to trade in older, low-rate bonds for new ones, be sure you don’t pay a hidden interest-rate penalty and that you avoid the deferred-tax time bomb.

New Series I Rates on older bonds range from 3.67% to 6.31%

Rates for older Series I bonds will range from 3.67% to 6.31%, compared to the 3.67% announced for new bonds on Monday. Like the I Bonds issued during the last six months, the new I bonds pay the lowest fixed base-rate ever, which gives them the lowest rate for any Series I bonds.

Don’t miss this alert

We are now taking pre-orders for the book version of Savings Bond Alert. The book is an expanded and enhanced hardcopy version of the information on our web site.

The book will have a new edition every six months. In addition to comprehensive information about all the issues facing Savings Bond investors, its 200-plus pages will include about 60 pages of tables summarizing the current interest rates and values for all Savings bonds.

We’ve specifially designed this book for those who have a Savings Bond investment of $10,000 or more. If you’re one of those amazing savers, you can read more about the book version of Savings Bond Alert on our web site.