Posted November 8, 2009 - 06:00 by Philip Brewer
Remember travelers checks? In the days before ubiquitous automated teller machines, they were a useful product. You could use them almost like cash -- but you could carry more than you'd feel safe carrying in cash because if they were lost or stolen you could get them replaced. Well, savings bonds have all those features but one.
Posted November 3, 2008 - 12:07 by Philip Brewer
Every six months, the Treasury sets a new fixed rate for series I savings bonds. After tracking close to the rate on the Treasury's other inflation-indexed bonds during the Clinton administration, the rate was cut sharply starting in 2001, culminating in an interest rate of zero for the past six months. Today, though, the Treasury announced the new rate for the next six months: 0.7%
Posted May 2, 2008 - 06:47 by Philip Brewer
Since 1998, the US Treasury has had a pretty good deal for small savers who were worried about inflation--the Series I Savings Bond. The interest it paid was based on inflation plus an additional return that was set by the Treasury and fixed for the life of the bond. On May 1st the Treasury announced the value of that fixed return for the next six months: Zero.
Posted April 4, 2008 - 05:33 by Philip Brewer
Interest rates for ordinary savers held up pretty well after the first Fed rate cut in July last year. There was a simple reason--banks needed the money. With the credit squeeze making it tough for banks to raise cash, the last thing they wanted was for savers to draw their money out in search of higher returns. The Fed's efforts to relieve the squeeze have been somewhat successful--banks have substantially cut the rates they'll pay savers.
Posted September 2, 2007 - 03:32 by Philip Brewer
There are risks in any investment. The market might go down--or the market might go up, but your investment might go down anyway. The company that issued your stock or bond might go bankrupt. Even cash has the (virtually certain) risk that it'll be worth a bit less next month due to inflation. There are a couple of investments that eliminate almost all these risks: TIPS and I-Bonds.
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