Treasury Lowers Rates for Savings Bonds

With interest rates falling, buyers of U.S. Savings Bonds in the next six months will be earning less.

The Treasury Department on Thursday said interest rates on short-term bonds issued from November through April will be 4.75%, down from 5.25%. The rate for long-term bonds will be 5.16% instead of 6.31%.

The Treasury adopted a new fluctuating-rate system in May, dropping guaranteed minimum rates and pegging them to the market.

Series EE Savings Bonds will earn the new short-term rate for the first five years and the long-term rate after that through 17 years.

The short-term rate is equal to 85% of the average of six-month Treasury security yields for August through October. The long-term rate is equal to 85% of the average of five-year securities during the same period.