FRESH FROM GIVING commercial banks and other deposit-takers freedom to set their own minimum savings rate, the Central Bank is inviting Barbadians to invest in a new $10 million Government savings bonds issue from June 1.
The bank re-launched its savings bonds programme this morning in its executive dining room, where Governor Dr DeLisle Worrell acknowledged that the effort would mean direct competition for the banks but pointed out these investment instruments were around since the 1980s.
When the savings bond issue opens next month it will have two major administrative changes, senior operations officer, banking and investments Linel Franklin announced. Individuals and benevolent organisations will be able to purchase bonds worth up to $100 000, while joint purchasers can go as high as $200 000. The previous limit for all investors was $50 000.
The bank is also introducing a single certificate system, replacing the previous practice of issuing certificates of different denominations, but this will not prevent bond holders from cashing in their investments during the five year maturity period of the bonds, which will yield 5.5 per cent return, tax-free, after five years.
“The savings bond has long been one of the best kept secrets of our financial system. In my view every Barbadian should have savings bonds because everyone should have a little savings set aside to cover life’s contingencies. There is no better vehicle for such rainy day savings than the savings bond,” Worrell said.
“If nothing unexpected turns up and you hold your bonds for the full five years, you will earn $100 for an investment of $76.24. However, if you do need cash in the period before the bond matures you can cash the whole bond or any portion thereof at any time.”