New EE Bond Rates are Dismal, Older EE Bonds Much Better

On November 1, 2013 the government announced the new interest rate for EE Savings Bonds– .1%.  You read that correctly, not 1% but .1%. So if you invest $1,000 today, at the end of one year you will have earned… drum roll please…   $1.  But wait, if you cash after one year there is a three month interest penalty, so you will net a whopping 75 cents on that $1,000.  Who is going to buy this? Seems that the new rates help achieve an objective seemingly behind many of the savings bond decisions over the past decade–to reduce and potentially eliminate the program. 

If you own older bonds the picture is not so bleak.  Many are still earning 3-5%. Find out the specific rates on your bonds with a savings bond statement. There is a select group of bonds that will provide a double digit return this next year. These are outlined in a bond statement and also in the newsletter Savings Bond Insight: The Next Chapter.

More Savings Bond Help: 

Dan Pederson is author of Savings Bonds: When to Hold, When to Fold and publishes an annual newsletter Savings Bond Insight: The Next Chapter for $19.95. He provides savings bond consultations regarding retitling bonds, finding lost bonds and savings bond dilemmas. His company offers a free record keeping sheet by calling 1-800-927-1901 or visiting the web site.

New I Bond Rates Provide a First

For the first time in the history of the I Bond, the variable rate published November 1, 2013 equalled the rate published the previous six months–1.18%.  The fixed rate on new purchases was increased to .2% so the combination of the two rates provides an initial rate of 1.38% on I Bonds purchased from November 1, 2013 to April 30, 2014.

Older I Bonds will earn varying rates from 1.18% to 4.78% during their next six month accrual. A savings bond statement  will provide you with the exact detail for each bond you own.  It will also show the critical fixed rate that each of your I Bonds is assigned. Some older I Bonds have fixed rates at more than 3%.  How to order a Bond Statement.