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The Bond Teller - An Online Resource for Employees of Financial Institutions


The Bond Teller - Savings Bonds Rates Rise for May 2004 - October 2004 Period

Note:   This is historical only and should not be used as current information.

When paper savings bonds were sold at financial institutions, Treasury provided newsletters for employees of those financial institutions to give them the information they needed to help their customers.

Treasury stopped issuing the newsletters in 2006.

The new interest rates announced for Series EE and I savings bonds purchased or beginning new semiannual interest periods on and after May 1, 2004, are 2.84% for Series EE and 3.39% for Series I bonds. Both rates increased from the rates in effect for the previous six-month period that began November 1, 2003, which were 2.61% and 2.19%, respectively.

Interest rates for savings bonds are announced each May 1 and November 1. The Series EE rate is set at 90% of the average return on five-year Treasury securities for the preceding six months. The Series I rate is a combination of a fixed rate, currently 1.0%, and the rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 185.2 to 187.4 from September 2003 to March 2004, a six-month increase of 1.19 percent.

Both series earn an average of the semiannual rates that have been in effect during each individual bond's lifetime. Bonds held less than five years are subject to a three-month interest penalty. Bonds must be held at least 12 months from issue date, and have a total interest-bearing life of 30 years.

Complete information on Savings Bonds is available to consumers on the Internet at www.treasurydirect.gov.