The interest rate on savings bonds was reduced.

The rate for U.S. savings bonds dropped to 7.02%, the lowest rate since the bonds were switched to a market-based interest system in 1982, the government said. The interest rate for savings bonds is changed twice each year--on May 1 and Nov. 1. The new rate, down from 8.36% for the preceding six months, is based on average market yields on five-year Treasury securities for the past six months. Since going to the new rate-setting system in November, 1982, the bonds have earned an average rate of 9.36%.