BOND RATES SLASHED

Physician's Money Digest, April15 2003, Volume 10, Issue 7

Series HH savings bonds, whichyou can get only by exchangingSeries E or EE bonds, have beenpopular with interest-starved savers,sporting a relatively rich 4% yield.Recently, however, the US TreasuryDepartment axed that lofty rate, cuttingit down to 1.5%. Financialexperts see few redemptions, though,since HH-bond owners have deferredthe tax due on the accumulatedinterest earned on the E or EEbonds they exchanged for them andwould be subject to that tax if theycashed out. The tax is also due whenthe HH bonds mature, however.One question for HH-bond holdersis whether to continue to get the taxbreak by rolling the bonds over atmaturity or to bite the tax bulletand look for a higher-yielding investment.For more information,visit www.savingsbonds.gov.