SAVINGS BONDS

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

11/2/2003

Savings Bonds Rates Decline for November 2003 - April 2004 Period

The new interest rates announced for Series EE and I savings bonds purchased or beginning new semiannual interest periods on and after November 1, 2003, were 2.61% for Series EE and 2.19% for Series I bonds. Both rates are a decline from the rates in effect for the previous six-month period that began May 1, 2003, which were 2.66% and 4.66%, 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 1.1%, and the rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U). The CPI-U increased from 184.2 to 185.2 from March to September 2003, a six-month increase of 0.54%.

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.