Treasury to fix rates on new EE savings bonds

[newportdadde]

<WASHINGTON - U.S. savings bonds will undergo a major change next month when interest rates will be fixed for the life of new Series EE bonds, the government announced Monday.

Starting on May 1, people who buy a new bond will receive for the life of the bond whatever interest rate is in effect at the time of purchase. Currently, interest rates on series EE bonds are adjusted every six months.>

<The move will save the government money in a rising interest rate environment because it will mean lower payments on this portion of the national debt.

“This is a huge change,” said savings bond expert Daniel J. Pederson. “A return to fixed rates would appear to be ... a way for the government to save money, and as an investor, if the government saves, that means you are getting less.”>


http://www.msnbc.msn.com/id/7384250/


This is a red flag. The treasury is essentially admitting here that they see interest rates going higher and probably for a good while. In my opinion this is an effort to stem what they know will turn into larger and larger debt service.

[Inland]

1. Interests rates aren't going to go down, thats for sure.

So the government suckers people who have parked money in EE debt.

My wife has some EE from her birthdays years ago. Do I know how much they earn? Nope. So the government takes advantage of the unsophisticated or busy. (SS Reform, anyone?)

[eallen]

2. This affects only new bonds. Any you own now still vary w/prevailing rate.