BANKING & FINANCE - May 2, 1992

Interest Rate on Savings Bonds Drops: The interest rate on U.S. savings bonds dropped to 5.58%, the lowest since the Treasury Department began selling variable-rate bonds in 1982. The new rate, in effect from May through October, is down from the 6.38% in effect during the previous six months. The previous record low was 5.84%, from May through October of 1987. A new rate is set every May 1 and Nov. 1 to reflect changes in market-based rates. The interest earned on a five-year bond is an average of the semiannual rates. However, there is a guaranteed minimum of 6% annually when the bonds are held five years or more.