ANNAPOLIS -- Search under the sofa cushions, check those old coat pockets and break open the kids' piggy banks if you have to, because Maryland is about to launch its second annual sale of "minibonds."
At one-tenth the face value of the state's normal general obligation bonds, the $500 small-denomination bonds are aimed at the small investor looking for a little tax savings and a way to invest in Maryland, according to state Treasurer Lucille Maurer.
Tomorrow morning, the Board of Public Works -- made up of Mrs. Maurer, Gov. William Donald Schaefer and Comptroller Louis L. Goldstein -- is expected to approve the sale of the second round of minibonds.
"This encourages saving. It also develops a sense of investing," Mrs. Maurer said in an interview yesterday. "It also lets people share in Maryland's triple-A bond rating."
That bond rating from the major New York rating houses is the highest issued, and it allows Maryland to pay as low an interest rate on its debt obligations as any other state. Only eight others have triple-A ratings.
Because interest rates in general are lower this year than last, the mini-bonds likely will pay about 0.5 percent less than last year, when the yield was 6.1 percent on both the five-year maturity bonds and the 10-year maturity bonds, Mrs. Maurer said.
The final rates won't be set until tomorrow morning's meeting.
At this year's expected rates, a $500 bond maturing June 1, 1996, would pay about $660, and one that matures in 2001 would pay about $910. There will be a $25 penalty for early redemption, and, to encourage people to save, the bonds will pay less interest in the first years and more in later years.
All the interest paid is free from federal, state and local taxes, but the minibonds will be sold only to Marylanders.
She said the state will act as sole underwriter for the bonds -- saving investors the cost of sales commissions. About $10 million of bonds will be approved for sale, but the Board of Public Works board could authorize more if the interest is there, as it was last year.
Individuals will be restricted to buying $2,500 worth of bonds on their own or $5,000 jointly, half of last year's limits.
The sale will take place May 27 through May 31, but Mrs. Maurer urged citizens to get their applications to her office well in advance.