NEW YORK, May 30 (Reuters) - The yield on benchmark U.S. 10-year Treasury notes fell to its lowest level in at least 60 years on Wednesday as contagion worries about the Spanish banking system intensified bids for U.S. government debt and other low-risk investments. The 10-year Treasury yield last traded at 1.658 percent, at least a 60-year low based on monthly figures gathered by Reuters. The yield on 30-year Treasury bonds was at 2.75 percent, the lowest since October 2011 according to Tradeweb. U.S. and German government yields declined as the yield on 10-year Spanish sovereign debt rose to six-month highs on concerns over how Spanish banks will obtain capital to stay afloat. "The fundamental question is where the money is going to come from to support the Spanish banks and on what terms," said Jim Vogel, interest rate strategist with FTN Financial in Memphis, Tennessee. On Wednesday, the European Commission advocated direct aid from a euro zone rescue fund to recapitalize distressed banks in an effort that could eventually help Spain.