Series I Savings Bonds to Earn 0.00%, Series EE to Earn 0.70% Fixed Rate, When Bought from May 2009 Through October 2009
FOR RELEASE AT 10:00 AM
May 1, 2009
The Bureau of the Public Debt today announced an earnings rate of 0.00% for Series I Savings Bonds, and a fixed rate of 0.70% for Series EE bonds, issued from May through October 2009. Earnings rates for I bonds and fixed rates for EE bonds are set each May 1 and November 1. Interest accrues monthly and compounds semiannually. Bonds held less than five years are subject to a three-month interest penalty. Both series have an interest-bearing life of 30 years; the EE bond fixed rate applies to a bond’s 20-year original maturity.
I Bond Earnings Rate 0.00%, Fixed Rate 0.10%
The earnings rate for Series I Savings Bonds is a combination of a fixed rate, which applies for the life of the bond, and the semiannual inflation rate. The 0.00% earnings rate for I bonds bought from May through October 2009 will apply for their first six months after issue. The earnings rate combines a 0.10% fixed rate of return with the -5.56% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). When the inflation rate is less than zero, a bond's earnings rate is less than its fixed rate (but the earnings rate is never less than zero). The fixed rate applies for the 30-year life of I bonds purchased during this six-month period. The CPI-U decreased from 218.783 to 212.709 from September 2008 through March 2009, a six-month change of -2.78%.
Series EE Bonds Issued from May 1997 Through April 2005
Series EE bonds issued from May 1997 through April 2005 continue to earn market-based interest rates set at 90% of the average 5-year Treasury securities yields for the preceding six months. The new interest rate for these bonds, effective as the bonds enter semiannual interest periods from May through October 2009, is 1.64%. Market-based rates are announced effective each May 1 and November 1. A 3-month interest penalty applies to bonds redeemed before being held five years.
Matured Series E Savings Bonds and Savings Notes
Series E savings bonds continue to reach final maturity and stop earning interest. Bonds issued from May 1941 through May 1979 no longer earn interest. All U.S. Savings Notes (Freedom Shares), which were issued from May 1967 through October 1970, have also stopped earning interest. Series E Bonds with issue dates from June through October 1979 will reach final maturity during the next six months.
More Information
Earnings rates and actual yields for Series I and EE bonds can be found in Earnings Reports for the respective series on Public Debt’s website, www.treasurydirect.gov. The website also contains information and instructions for opening an on-line account to purchase electronic I and EE bonds, as well as Treasury marketable securities. Account holders can purchase, manage, and redeem electronic savings bonds over the Internet 24 hours a day, seven days a week. Detailed information about all Treasury securities, including savings bonds and marketable Treasury bills, notes, bonds and TIPS (Treasury Inflation Protected Securities), is available through www.treasurydirect.gov.