Jun 2015 Financial News

Barbadians being encouraged to invest in savings bonds

Jun 01, 2015

A $10MILLION savings bonds issue goes on the market on June 1. The issue, the 75th series since they were introduced in 1980, was announced at a media event to kick off a promotional campaign for the government security. 

The Central Bank of Barbados is offering up savings bonds as an alternative to savings accounts, following the removal of the minimum savings rate. 

After the removal was announced on April 7, several industry insiders suggested that the Bank would counter the projected drop in interest rates and help soak up the excess liquidity in the banking sector by selling savings bonds with an attractive interest rate. 

The new series is being offered to Barbadians at $76.24 per $100 nominal value, which translates to a yield of 5.5 per cent at maturity. 5.5 per cent is well above the 2.5 per cent commercial banks were offering before the removal of the minimum savings rate, and even higher than what banks are expected to pay now that interest rates have been deregulated. 

At the campaign launch recently, Governor Dr. DeLisle Worrell revealed that he has been investing in savings bonds for more than 30 years, and encouraged all Barbadians to invest in them. “Savings bonds should be an essential part of the portfolio of every working person.” 

Dr. Worrell also suggested that savings bonds are a good way of introducing children to financial planning.

Source:
Barbados Advocate
Monday June 1, 2015

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=43713