Savers forgo huge sums of interest annually when they keep substantial deposits in low-yield bank passbook accounts. In one 2008 study, the Consumer Federation of America estimated that savers could collectively earn at least $30 billion more in interest annually if they shifted their assets to certificates of deposit (CDs) or Series EE U.S. savings bonds. The report suggests the following higher-interest savings options: • Certificates of deposit: CDs can be purchased for as little as $250 at many financial institutions. They can be purchased with staggered maturity dates to increase liquidity, a process known as “laddering.” • Savings bonds: U.S. savings bonds can be purchased for as little as $25 (Series EE) or $50 (Series I) from most banks or directly from the U.S. Treasury. For more information go to http://www.consumerfed.org/. Data were obtained from a national opinion study of 1,008 adults and from the Federal Reserve’s Survey of Consumer Finances. We would like your feedback on this Personal Finance Frequently Asked Question.

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