DoTreas. Circular 1-80

7/31/2019 DoTreas. Circular 1-80

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Fiscal Service, Bureau of the Public Debt

Department of the

Treasury

31 CFR Part 351 - Offering of United States Savings Bonds,

Series EE

Departmentof the Treasury CircularPublic Debt Series No. 1-80, as Revised and Amended

As of July 2010

Amendment August 26, 2010


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52459Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010/ Rules and Regulations

DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 317, 351, 353, and 359

Regulations Governing Agencies forIssue of United States Savings Bonds;Offering of United States SavingsBonds, Series EE; RegulationsGoverning Definitive United StatesSavings Bonds, Series EE and HH;Offering of United States SavingsBonds, Series I

AGENCY: Bureau of the Public Debt,

Fiscal Service, Treasury.ACTION: Final rule.

SUMMARY: Treasury is discontinuing theissuance of definitive (paper) savings

bonds through payroll savings plans.

DATES: Effective Date:The amendmentsto 31 CFR 351.47 and 31 CFR 359.35 areeffective on October 1, 2010; all otheramendments are effective on January 1,2011.

ADDRESSES: You can download thisFinal Rule at the following Internetaddresses: http://www.publicdebt.treas.gov,http://

www.gpo.gov, or http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:Elisha Whipkey, Director, Division ofProgram Administration, Office of RetailSecurities, Bureau of the Public Debt, at(304) 4806319 [email protected].

Ann Fowler, Attorney-Adviser, SusanSharp, Attorney-Adviser, Dean Adams,Assistant Chief Counsel, EdwardGronseth, Deputy Chief Counsel, Officeof the Chief Counsel, Bureau of the

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52460 Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010/ Rules and Regulations

Public Debt, at (304) 4808692 [email protected].

SUPPLEMENTARY INFORMATION: UnitedStates Savings Bonds are non-marketable Treasury securities whichhave been sold continuously sinceMarch 1935. Savings bonds wereintroduced as a means of encouraging

broad public participation ingovernment financing by makingTreasury securities available in smalldenominations specially tailored to thesmall investor. Today, savings bondscontinue to be an important savings andinvestment tool for individuals, andTreasury is committed to offeringsavings bonds to the public asefficiently as possible.

In order to reduce costs, to increasethe reliability and security oftransactions by moving from paper toelectronics, and to minimize theTreasurys impact on the environment,Treasury is discontinuing the issuance

of definitive (paper) savings bondsthrough payroll savings plans. Treasurywill eliminate the option to purchasepaper savings bonds through payrolldeductions for United Statesgovernment employees on October 1,2010, and for all other employees on

January 1, 2011. This policy covers onlypaper savings bonds purchased throughpayroll sales; individuals will still beable to purchase paper savings bonds atfinancial institutions for themselves andas gifts. Payroll savers will beencouraged to continue their purchasesthrough TreasuryDirect, a web-based

system that allows investors to buy andhold electronic savings bonds.Transitioning employees to electronicpayroll purchases saves employersadministrative costs and allowsemployees to manage their own savings

bond accounts.

Procedural Requirements

Executive Order 12866. This rule isnot a significant regulatory actionpursuant to Executive Order 12866.

Administrative Procedure Act (APA).Because this rule relates to UnitedStates securities, which are contracts

between Treasury and the owner of thesecurity, this rule falls within thecontract exception to the APA, 5 U.S.C.553(a)(2). As a result, the notice, publiccomment, and delayed effective dateprovisions of the APA are inapplicableto this rule.

Regulatory Flexibility Act. Theprovisions of the Regulatory FlexibilityAct, 5 U.S.C. 601 et seq., do not applyto this rule because, pursuant to 5U.S.C. 553(a)(2), it is not required to beissued with notice and opportunity forpublic comment.

Paperwork Reduction Act (PRA).There is no new collection ofinformation contained in this final rulethat would be subject to the PRA, 44U.S.C. 3501 et seq. Under the PRA, anagency may not conduct or sponsor, anda person is not required to respond to,a collection of information unless itdisplays a valid Office of Management

and Budget control number. The Officeof Management and Budget already hasapproved all collections of informationin 31 CFR Part 353 (OMB No. 15350009, 15350023, 15350063) and Part359 (OMB No. 15350111).

Congressional Review Act (CRA). Thisrule is not a major rule pursuant to theCRA, 5 U.S.C. 801 et seq.,because it isa minor amendment that is expected todecrease costs for taxpayers and foremployers; therefore, this rule is notexpected to lead to any of the resultslisted in 5 U.S.C. 804(2). This rule maytake immediate effect after we submit a

copy of it to Congress and theComptroller General.

List of Subjects

31 CFR Part 317

Bonds, Electronic funds transfers,Federal Reserve System, Governmentsecurities, Securities.

31 CFR Part 351

Bonds, Federal Reserve System,Government securities.

31 CFR Part 353

Banks and banking, Governmentsecurities, Federal Reserve system.

31 CFR Part 359

Bonds, Federal Reserve system,Government securities, Securities.

Accordingly, for the reasons set out inthe preamble, 31 CFR Chapter II,Subchapter B, is amended as follows:

PART 317REGULATIONSGOVERNING AGENCIES FOR ISSUEOF UNITED STATES SAVINGS BONDS.

1. Revise the authority citation for part317 to read as follows:

Authority: 5 U.S.C. 301; 12 U.S.C. 391; 12U.S.C. 1767; and 31 U.S.C. 3105.

2. Amend 317.1 by revisingparagraph (c)(2) to read as follows:

317.1 Definitions.

* * * * *

(c) * * *

(2) Each organization that isauthorized to inscribe bonds sold over-the-counter.

* * * * *

317.2 [Amended]

3. Amend 317.2 by removingparagraph (c), and redesignatingparagraph (d) as paragraph (c).

4. Amend 317.3(a) by revising thesecond sentence to read as follows:

317.3 Procedure for qualifying andserving as issuing agent.

(a) * * * However, if an organizationseeks qualification under 317.2(c), itshall make application directly to theBureau of the Public Debt for approval

by the Commissioner of the Bureau ofthe Public Debt. * * *

* * * * *

5. Amend 317.7 by revising the firstsentence to read as follows:

317.7 Obtaining and accounting for bondstock.

An issuing agent that is authorized toinscribe bonds sold over-the-countermay obtain bond stock from the

designated Federal Reserve Bank. * * *

317.8 [Amended]

6. In 317.8, remove the Appendix to 317.8.

PART 351OFFERING OF UNITEDSTATES SAVINGS BONDS, SERIES EE

7. The authority citation for part 351continues to read as follows:

Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31U.S.C. 3105.

351.46 [Amended]

8. Amend 351.46 by removingfootnote 2. 9. Revise 351.47 to read as follows:

351.47 May I purchase definitive SeriesEE savings bonds through a payrollsavings plan?

Treasury discontinued the issuance ofdefinitive Series EE savings bondsthrough a payroll savings plan:

(a) Effective October 1, 2010, forUnited States government employees,and

(b) Effective January 1, 2011, for allother employees.

351.70 [Amended]

10. Amend 351.70 by redesignatingfootnote 3 as footnote 2.

PART 353REGULATIONSGOVERNING DEFINITIVE UNITEDSTATES SAVINGS BONDS, SERIES EEAND HH


Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31U.S.C. 3105, 3125.

12. Amend 353.6 by:

mailto:[email protected]:[email protected]:[email protected]


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52461Federal Register / Vol. 75, No. 165 / Thursday, August 26, 2010/ Rules and Regulations

a. Redesignating paragraph (d) asparagraph (e);

b. Redesignating paragraph (c) asparagraph (d);

c. Redesignating paragraph (b)(4) asparagraph (c) and revising it to read asfollows:

353.6 Restrictions on registration.* * * * *

(c) Nonresident aliens. A nonresidentalien may be designated co-owner or

beneficiary or, on authorized reissue,owner, unless the nonresident alien is aresident of an area with respect towhich the Department of the Treasuryrestricts or regulates the delivery ofchecks drawn against funds of theUnited States or its agencies orinstrumentalities. See Department of theTreasury Circular No. 655, currentrevision (31 CFR part 211). Registrationis not permitted in any form whichincludes the name of any alien who isa resident of any restricted area.

* * * * *

PART 359OFFERING OF UNITEDSTATES SAVINGS BONDS, SERIES I


Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31U.S.C. 3105.

359.34 [Amended]

14. Amend 359.34 by removingfootnote 4.

15. Revise 359.35 to read as follows:

359.35 May I purchase definitive Series Isavings bonds through a payroll savingsplan?

Treasury discontinued the issuance ofdefinitive Series I savings bondsthrough a payroll savings plan:

(a) Effective October 1, 2010, forUnited States government employees,and

(b) Effective January 1, 2011, for all

other employees. 359.55 [Amended]

16. Amend 359.55 by redesignatingfootnote 5 as footnote 4.

Richard L. Gregg,

Fiscal Assistant Secretary.

[FR Doc. 201021197 Filed 82510; 8:45 am]

BILLING CODE 481039P

http://www.regulations.gov/mailto:[email protected]


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Fiscal Service, Bureau of the Public Debt

Department of the

Treasury

31 CFR Part 351 - Offering of United States Savings Bonds,

Series EE

Departmentof the Treasury CircularPublic Debt Series No. 1-80

As of July 2010


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Fiscal Service, Treasury Pt. 351

PART 351OFFERING OF UNITEDSTATES SAVINGS BONDS, SERIES EE

Sec.

Subpart AGeneral Information

351.0 What does this part cover?351.1 What regulations govern Series EE

savings bonds?351.2 How do I contact Public Debt?351.3 What special terms do I need to know

to understand this part?351.4 In what form are Series EE savings

bonds issued?

Subpart BMaturities, Redemption Values,and Investment Yields of Series EE Sav-ings Bonds

GENERAL PROVISIONS

351.5 What is the maturity period of a Se-ries EE savings bond?

351.6 When may I redeem my Series EE sav-ings bond?

351.7 May Series EE savings bonds be calledfor redemption prior to final maturity?

351.8 When is interest payable on Series EEsavings bonds?

351.9 When will I receive the redemptionvalue of my Series EE savings bonds?

351.10 What do I need to know about market

yields, or market bid yields, to under-stand redemption value calculations in

this subpart?351.11 What do I need to know about the

short-term savings bond rate, to under-stand redemption value calculations inthis subpart?

351.12 What do I need to know about thelong-term savings bond rate, to under-stand redemption value calculations inthis subpart?

351.13 What do I need to know about thesavings bond rate to understand redemp-tion value calculations in this subpart?

351.14 When are rate announcements appli-cable to Series EE savings bonds an-nounced?

351.15 Is the determination of the Secretaryon rates and values final?

351.16 What do I need to know about thebase denomination for redemption value

calculations?351.17351.18 [Reserved]

SERIES EE SAVINGS BONDS WITH ISSUE DATESPRIOR TO MAY 1, 1995

351.19 What are maturity periods of SeriesEE savings bonds with issue dates priorto May 1, 1995?

351.20 What is the investment yield (inter-est) during the original maturity periodof Series EE savings bonds with issue

dates January 1, 1980, through April 1,

1995?

351.21 How are redemption values deter-

mined during any extended maturity pe-

riod of Series EE savings bonds with

issue dates prior to May 1, 1995?351.22 When does the redemption value in-

crease for bonds issued prior to May 1,

1995?351.23 Are tables of redemption values avail-

able for bonds issued prior to May 1, 1995?

SERIES EE SAVINGS BONDS WITH ISSUE DATESFROM MAY 1, 1995, THROUGH APRIL 1, 1997

351.24 What are the maturity periods of

bonds with issue dates from May 1, 1995,

through April 1, 1997?351.25 What were the interest rates and re-

demption values for bonds with issue

dates from May 1, 1995, through April 1,

1997, during semiannual rate periods in

the first 5 years after issue date?351.26 What are the interest rates and re-


dates from May 1, 1995 through April 1,

1997, during semiannual rate periods that

begin 5 years or more after issue date?351.27 What are the interest rates and re-


dates from May 1, 1995 through April 1,

1997, during an extended maturity pe-

riod?351.28 How are redemption values calculated

for bonds with issue dates from May 1,

1995, through April 1, 1997?

SERIES EE SAVINGS BONDS WITH ISSUE DATES

OF MAY 1, 1997, THROUGH APRIL 1, 2005

351.29 What are the maturity periods of

bonds with issue dates of May 1, 1997,

through April 1, 2005?351.30 What are interest rates and monthly

accruals for Series EE bonds with issue

dates of May 1, 1997, through April 1,2005, during the original maturity pe-

riod?351.31 What is the interest penalty for Se-

ries EE bonds with issue dates of May 1,

1997, through April 1, 2005, that are re-

deemed less than 5 years after the issue

date?351.32 How are redemption values calculated

for Series EE bonds with issue dates of

May 1, 1997, through April 1, 2005?351.33 What are interest rates and redemp-

tion values for Series EE bonds issued

May 1, 1997, through April 1, 2005, duringan extended maturity period?

SERIES EE SAVINGS BONDS WITH ISSUE DATESOF MAY 1, 2005, OR THEREAFTER

351.34 What are the maturity periods of Se-

ries EE bonds with issue dates of May 1,

2005, or thereafter?351.35 What do I need to know about inter-

est rates, penalties, and redemption val-

ues for Series EE bonds with issue dates

of May 1, 2005, or thereafter?

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31 CFR Ch. II (7110 Edition) 351.0

351.36351.39 [Reserved]

Subpart CDefinitive Series EE SavingsBonds

351.40 What are the denominations and

prices of definitive Series EE savingsbonds?

351.41 When are definitive Series EE savings

bonds validly issued?351.42 What is the issue date of a definitive

Series EE savings bond?351.43 Are taxpayer identification numbers

(TINs) required for the registration of a

definitive Series EE savings bond?351.44 What amount of definitive Series EE

savings bonds may I purchase per year?351.45 What happens if I purchase definitive

Series EE savings bonds in excess of the

maximum annual amount?351.46 May I purchase definitive Series EE

savings bonds over-the-counter?351.47 May I purchase definitive Series EE

savings bonds through a payroll savings

plan?351.48 May I purchase definitive Series EE

savings bonds through employee thrift,

savings, vacation, and similar plans?351.49 How are definitive Series EE savings

bonds delivered?351.50 How is payment made when definitive

Series EE savings bonds are redeemed?

351.51 How can I find out what my definitive

Series EE savings bonds are worth?351.52351.59 [Reserved]

Subpart D BookEntry Series EE SavingsBonds

351.60 How are book-entry Series EE sav-

ings bonds purchased and held?351.61 What are the denominations and

prices of book-entry Series EE savings

bonds?351.62 How is payment made for purchases

of book-entry Series EE savings bonds?351.63 How are redemption payments made

for my redeemed book-entry Series EE

savings bonds?351.64 What is the issue date of a book-entry

Series EE savings bond?351.65 What amount of book-entry Series

EE savings bonds may I acquire per year?

351.66 What book-entry Series EE savings

bonds are included in the computation?351.67 What happens if any person purchases

book-entry Series EE savings bonds in

excess of the maximum annual amount?351.68 Are taxpayer identification numbers

(TINs) required for registration of book-

entry Series EE savings bonds?351.69 When is a book-entry Series EE sav-

ings bond validly issued?351.70 How are redemption values calculated

for book-entry Series EE savings bonds?351.71 How can I find out what my book-

entry Series EE savings bonds are worth?

351.72351.80 [Reserved]

Subpart EMiscellaneous Provisions

351.81 Is the Education Savings Bond Pro-gram available for Series EE savings

bonds?351.82 Does Public Debt prohibit the

issuance of Series EE savings bonds in a

chain letter scheme?351.83 May Public Debt issue Series EE sav-

ings bonds only in book-entry form?351.84 Does Public Debt make any reserva-

tions as to issue of Series EE savingsbonds?

351.85 May Public Debt waive any provision

in this part?351.86 What is the role of Federal Reserve

Banks and Branches?351.87 May Public Debt revise, supplement

or amend the terms of this offering?

APPENDIX TO PART 351TAX CONSIDERATIONS

AUTHORITY: 5 U.S.C. 301; 12 U.S.C. 391; 31

U.S.C. 3105.

SOURCE: 68 FR 24796, May 8, 2003, unlessotherwise noted.

Subpart AGeneral Information

351.0 What does this part cover?

This part is the offering of UnitedStates Savings Bonds of Series EE (re-ferred to as Series EE bonds or bonds)

for sale to the people of the UnitedStates by the Secretary of the Treas-ury (Secretary). Series EE bonds havebeen offered since 1980. The currentoffer was effective May 1, 2005, and willcontinue until terminated by the Sec-retary.

[68 FR 24796, May 8, 2003, as amended at 70

FR 17288, Apr. 5, 2005]

351.1 What regulations govern SeriesEE savings bonds?

(a) The regulations in 31 CFR part 353apply to definitive (paper) Series EEsavings bonds that have not been con-verted to book-entry bonds throughNew Treasury Direct.

(b) The regulations in 31 CFR part 363apply to:

(1) book-entry Series EE savingsbonds that were originally issued asbook-entry bonds in New Treasury Di-rect; and

(2) definitive Series EE savings bondsthat have been converted to book-entrybonds through New Treasury Direct.

(c) The regulations in 31 CFR part 370apply to transactions for the purchase



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Fiscal Service, Treasury 351.3

of savings bonds issued through the Bu-reau of the Public Debt, but do notapply to transactions purchasedthrough issuing agents generally.

(d) We expressly disclaim any rep-resentations or warranties regardingSeries EE savings bonds that in anyway conflict with these regulations andother applicable law.

[68 FR 24796, May 8, 2003, as amended at 70FR 14941, Mar. 23, 2005]

351.2 How do I contact Public Debt?

You may contact Public Debt by e-mail at [email protected], or bywriting to the following address: Bu-reau of the Public Debt, Parkersburg,West Virginia 261061328. Our websiteaddress is www.savingsbonds.gov.

351.3 What special terms do I need toknow to understand this part?

Accrual date is the first day of anymonth on which earnings on a SeriesEE bond accrue. The redemption valueof a bond does not change betweenthese accrual dates.

Automated Clearing House (ACH)means a funds transfer system gov-erned by the Rules of the NationalAutomated Clearing House Association

(NACHA). NACHA provides for theinterbank clearing of electronic entriesfor participating financial institutions.

Bank account means your account ata United States depository financial in-stitution (whether a bank or other fi-nancial institution) to which you havedirected that ACH debits and paymentsbe made.

Beneficiary refers to the second indi-vidual named in the registration of asecurity held in definitive form reg-istered John Doe SSN 123456789 POD(payable on death to) Joseph Doe. Inthe New Treasury Direct system, bene-ficiary refers to the second individualnamed in the registration of a security

registered John Doe SSN 123456789POD (payable on death to) Joseph DoeSSN 987654321. In these examples,Joseph Doe is the beneficiary.

Book-entry bond means a Series EEsavings bond maintained by Treasurysolely as a computer record.

Converted bond means a savings bondoriginally issued as a definitive bondthat has been surrendered to us andconverted to a book-entry savings bond

to be maintained by Treasury solely asa computer record.

Coowner means either the first or thesecond individual named in the reg-istration of a definitive Series EE sav-ings bond registered John Doe SSN123456789 or Joseph Doe. In this ex-ample, John Doe and Joseph Doe arecoowners.

Definitive bond means a Series EEsavings bond issued in paper form.

Extended maturity period, second ex-tended maturity period, and extended ma-turity refer to periods after the originalmaturity dates of the bonds duringwhich owners may retain them andcontinue to earn interest.

Face amount refers to the nominalamount of a Series EE savings bond.The face amount of a definitive SeriesEE bond is imprinted on the front ofthe bond. The face amount of a book-entry Series EE bond is the amount ofthe original investment. (See principalamount.)

Fiduciary means the court-appointedor otherwise qualified person, regard-less of title, who is legally authorizedto act for another. Fiduciary does notinclude an attorney-in-fact.

Final maturity refers to the date thata bond ceases to earn interest.

Individual means a natural person.Individual does not mean an organiza-tion, representative, or fiduciary.

Inscription means the informationthat is printed on the face of the bond.

Interest, as used in this part, is thedifference between the principalamount and the redemption value ofthe bond.

Issue date is the first day of themonth in which an authorized issuingagent receives payment of the issueprice of the bond.

Issuing agent means an organizationthat has been qualified under 31 CFR

part 317, and any other entity that isotherwise authorized to issue bonds.

New Treasury Direct system (NewTreasury Direct) is an online accountsystem in which you may hold and con-duct transactions in eligible book-entry Treasury securities.

Original maturity period or original ma-turity refers to the initial maturity pe-riod of a bond prior to any extensionsof maturity; this period varies from 8



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to 20 years, depending on the issue dateof the bond.

Owner is either a single owner, thefirst individual named in the registra-tion of a bond held in the owner withbeneficiary form of registration, or theprimary owner of a book-entry bondheld in the primary owner with sec-ondary owner form of registration.

Par means the face amount of a Se-ries EE savings bond.

Paying agent means a financial insti-tution that has been qualified under 31CFR part 321.

Person means an entity including anindividual, trust, estate, corporation,government entity, association, part-nership, and any other similar organi-zation. Person does not mean a FederalReserve Bank.

Primary owner means the first indi-vidual named in the registration of abook-entry bond held in New TreasuryDirect registered John Doe SSN 123456789 with Joseph Doe SSN 987654321. In this example, John Doe is theprimary owner.

Principal amount means the amountof the original investment. Principalamount does not include any interestearned.

Redemption of a book-entry Series EEsavings bond refers to payment of prin-cipal and accrued interest on the bondat final maturity, or, at the option ofthe owner, prior to final maturity. Theowner of a book-entry savings bondheld in New Treasury Direct may re-deem all principal and interest or aportion of the principal and the propor-tionate amount of interest.

Redemption of a definitive Series EEsavings bond refers to the payment ofprincipal and accrued interest whenthe owner presents the bond for pay-ment.

Redemption value means principalplus accrued interest of a Series EE

savings bond, as of the date of poten-tial or actual redemption. In the caseof a book-entry Series EE savingsbond, it also refers to a portion of theprincipal amount plus a proportionateamount of accrued interest of a bond,as of the date of potential or actual re-demption.

Registration means that the names ofall persons named on the bond and thetaxpayer identification number (TIN)

of the owner, first-named coowner, or

purchaser of a gift bond are maintained

on our records.

Secondary owner means the second in-dividual named in the registration of abook-entry bond held in New Treasury

Direct registered John Doe SSN 123

456789 with Joseph Doe SSN 98765

4321. In this example, Joseph Doe is

the secondary owner.

Semiannual rate periods or semiannualearnings periods are the six-month peri-ods beginning on the issue date and on

each semiannual anniversary of theissue date to final maturity.

Series EE savings bond is an accrual-type savings bond, offered at a dis-

count, either in definitive (paper) form

or in book-entry form, that pays inter-est on the principal based on rates de-

termined by Treasury.

Single owner means the person namedin the registration of a savings bond

without a coowner, beneficiary or sec-

ondary owner.

Taxpayer identification number (TIN)

means the identifying number required

on tax returns and other documentssubmitted to the Internal Revenue

Service; for example, an individuals

social security account number (SSN)or an employer identification number

(EIN). A SSN is composed of nine digitsseparated by two hyphens, for example,

123456789. An EIN is composed of nine

digits separated by one hyphen, for ex-

ample, 123456789. The hyphens are an

essential part of the numbers.

We, us, or our refers to the agency,the Bureau of the Public Debt. Theterm extends to the Secretary of the

Treasury and the Secretarys delegatesat the Treasury Department and Bu-reau of the Public Debt. The term alsoextends to any fiscal or financial agentwe designate to act on behalf of the

United States.You or your refers to an owner of aSeries EE savings bond.


FR 14941, Mar. 23, 2005; 71 FR 46857, Aug. 15,

2006]

351.4 In what form are Series EE sav-ings bonds issued?

Series EE savings bonds are issued ineither book-entry or definitive form.



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Subpart BMaturities, RedemptionValues, and Investment Yieldsof Series EE Savings Bonds

GENERAL PROVISIONS

351.5 What is the maturity period ofa Series EE savings bond?

Series EE savings bonds have a total

maturity period of 30 years from the

issue date, consisting of an original

maturity period and one or two periods

of extended maturity, which vary de-

pending on the issue date of the bond.The interest on an outstanding bond

ceases to accrue 30 years after its issue

date.

351.6 When may I redeem my SeriesEE savings bond?

(a) Bonds with issue dates on or before

January 1, 2003. You may redeem your

Series EE savings bond at any time be-

ginning six months after its issue date.

(b) Bonds with issue dates on or after

February 1, 2003. You may redeem your

Series EE savings bond at any time be-

ginning twelve months after its issue

date.

351.7 May Series EE savings bondsbe called for redemption prior tofinal maturity?

The Secretary of the Treasury may

not call Series EE bonds for redemp-

tion prior to final maturity.

351.8 When is interest payable on Se-ries EE savings bonds?

Interest on a bond accrues and be-

comes part of the redemption value. In-

terest earnings are payable upon re-

demption.

351.9 When will I receive the redemp-tion value of my Series EE savings

bonds?

(a) You will be paid the redemption

value of your definitive bond when you

surrender the bond for payment as pro-

vided in these regulations and in 31

CFR part 353.

(b) You will be paid the redemption

value of your book-entry bond when it

reaches final maturity, if you have not

redeemed the bond previously.

351.10 What do I need to know aboutmarket yields, or market bid yields,to understand redemption valuecalculations in this subpart?

We use market yields, or market bid

yields, derived from Treasury bills,

notes, and bonds, to create a yieldcurve based on the most actively trad-

ed Treasury securities. This curve re-

lates the yield on a security to its time

to maturity. Yields at particularpoints on the curve are referred to as

constant maturity yields and are de-

termined by the Treasury from thisdaily yield curve. Six-month and 5-year

Treasury securities rates are derivedfrom these yield curves.

351.11 What do I need to know aboutthe short-term savings bond rate, tounderstand redemption value cal-culations in this subpart?

We determine this rate by compiling

6-month Treasury securities rates as ofthe close of business for each day of the

previous three months and calculating

the monthly average for each month,

rounding each monthly average to the

nearest one-hundredth of one percent.We then determine the short-term sav-

ings bond rate by taking 85 percent ofthe three-month average and rounding

the result to the nearest one-hundredth

of one percent. For bonds entitled tointerest accruals at the short-term sav-

ings bond rate, that rate applies to thebonds first full semiannual interest ac-crual period following each announce-ment of the rate.

351.12 What do I need to know aboutthe long-term savings bond rate, tounderstand redemption value cal-culations in this subpart?

We determine this rate by compiling5-year Treasury securities rates as ofthe close of business for each day of the

previous six months and calculatingthe monthly average for each month,rounding each monthly average to thenearest one-hundredth of one percent.We then determine the long-term sav-ings bond rate by taking 85 percent ofthe 6-month average and rounding the

result to the nearest one-hundredth ofone percent. For bonds entitled to in-terest accruals at the long-term sav-ings bond rate, that rate applies to the



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bonds first full semiannual interest ac-crual period following each announce-ment of the rate.

351.13 What do I need to know aboutthe savings bond rate to under-stand redemption value calcula-tions in this subpart?

We determine the savings bond rateby compiling 5-year Treasury securi-

ties yields as of the close of businessfor each day of the previous six monthsand calculating the monthly average tothe nearest one-hundredth of one per-

cent. We then determine the savingsbonds rate by taking 90 percent of the6-month average and rounding the re-sult to the nearest one-hundredth ofone percent.

351.14 When are rate announcementsthat apply to Series EE savingsbonds announced?

(a) The Secretary will furnish ratesthat apply to Series EE savings bondsin announcements published each May1 and November 1.

(b) If the regularly scheduled date forthe announcement is a day when weare not open for business, then the Sec-retary will make the announcement on

the next business day. However, the ef-fective date of the rate remains thefirst day of the month of the announce-ment.

(c) The Secretary may announcerates at any other time.

351.15 Is the determination of theSecretary on rates and values final?

The Secretarys determination ofrates of return and savings bond re-demption values is final and conclu-sive.

351.16 What do I need to know aboutthe base denomination for redemp-tion value calculations?

We base all calculations of interest

on a unit with a principal amount of

$12.50. We use this unit value to deter-

mine the value of bonds in higher de-

nominations. The effect of rounding off

the value of the $12.50 unit increases at

higher denominations. This can work

to your slight advantage or disadvan-

tage, depending on whether the value is

rounded up or down.

Example. The following hypothetical exam-

ple illustrates the calculation: A rate of

3.25% will result in a newly purchased $12.50

unit increasing in value after six months to

$12.70, when rounded to the nearest cent.

Therefore, a $5,000 definitive Series EE bond

(with a principal amount of $2,500) will be

worth $2,540 after six months ([$2,500 divided

by $12.50] $12.70 = $2,540.) In contrast, if ap-

plied directly to a $2,500 principal amount,

the rate would render a value of $2,540.63

after six months, a difference of 63 cents.

(This example does not account for any in-

terest penalty that might apply if you re-

deem a bond less than five years after its

issue date.)

351.17351.18 [Reserved]

SERIES EE SAVINGS BONDS WITH ISSUE

DATES PRIOR TO MAY 1, 1995

351.19 What are maturity periods ofSeries EE savings bonds with issuedates prior to May 1, 1995?

Bonds with issue dates from January

1, 1980, through May 1, 1995 have an

original maturity period and two ex-

tended maturity periods, as shown by

the following table:

Issue dates1st day ofOriginal term

(in years)

First extendedterm

(in years)

Second ex-tended term

(in years)Final maturity dates

Jan. 1980Oct. 1980 ............................... 11 10 9 Jan. 2010Oct. 2010.Nov. 1980Apr . 1981 ... .. .. .. .. .. .. .. .. .. .. .. .. .. . 9 10 11 Nov. 2010Apr . 2011.

May 1981Oct. 1982 ... .. .. .. .. .. .. .. .. .. .. .. .. .. .. 8 10 12 May 2011Oct. 2012.

Nov. 1982Oct. 1986 ... .. .. .. .. .. .. .. .. .. .. .. .. .. . 10 10 10 Nov. 2012Oct. 2016.

Nov. 1986Feb. 1993 ... .. .. .. .. .. .. .. .. .. .. .. .. .. 12 10 8 Nov. 2016Feb. 2023.

Mar . 1993Apr. 1995 ... .. .. .. .. .. .. .. .. .. .. .. .. .. . 18 10 2 Mar . 2023Apr. 2025.



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351.20 What is the investment yield(interest) during the original matu-rity period of Series EE savingsbonds with issue dates from Janu-ary 1, 1980, through April 1, 1995?

The redemption value of a bond on agiven interest accrual date duringoriginal maturity will be the higher ofthe value produced using the applicableguaranteed minimum investment yieldor the value produced using the appro-priate market-based variable invest-ment yield.

(a) Guaranteed minimum investment

yield(1) Bonds bearing issue dates priorto November 1, 1982. You may obtain theguaranteed minimum investmentyields on bonds bearing issue datesprior to November 1, 1982, bydownloading from our website atwww.savingsbonds.gov, contacting us byemail at [email protected], or bywriting us at the following address: Bu-reau of the Public Debt, Parkersburg,West Virginia 261061328.

(2) Bonds bearing issue dates of Novem-ber 1, 1982, through April 1, 1995(i)Prior to 5 years from issue date. You maydownload the guaranteed minimum in-vestment yields prior to 5 years fromissue date at our website at

www.savingsbonds.gov, by contacting usby email at [email protected], orwriting to the following address: Bu-reau of the Public Debt, Parkersburg,West Virginia 261061328.

(ii) On or after 5 years from issue date.The guaranteed minimum investmentyield of a bond from its issue date toeach semiannual interest accrual dateoccurring on or after 5 years from issueup to original maturity will be as fol-lows, compounded semiannually:

Issue dates of bonds Percent

Nov. 1, 1982October 1, 1986 ............................ 7.5Nov. 1, 1986Feb. 1, 1993 ................................. 6Mar. 1, 1993Apr. 1, 1995 .................................. 4

(b) Market-based variable investmentyield. If a bond is held for a period of 5years after its first semiannual inter-est accrual period, occurring on orafter November 1, 1982, or its issuedate, whichever is later, its market-based variable investment yield forsuch period, and to each successivesemiannual interest accrual date up toits original maturity, will be deter-mined as follows:

(1) For each 6-month period, startingwith the period beginning on May 1,1982, we will determine the averagemarket yield on outstanding market-able Treasury securities with a remain-ing term to maturity of approximately5 years during such period.

(2) For bonds bearing an issue dateprior to May 1, 1989, the market-basedvariable investment yield from its firstsemiannual interest accrual date oc-curring on or after November 1, 1982, orits issue date, whichever is later, to itsfirst semiannual interest accrual date 5

years thereafter will be 85 percent,rounded to the nearest one-fourth of 1percent, of the arithmetic average ofthe market yield averages for the ten6-month periods starting with the 6-month period that most recently endedbefore such issue date, whichever islater.

(3) For bonds bearing issue dates ofMay 1, 1989, through April 1, 1995, themarket-based variable investmentyield from the issue date to the semi-annual interest accrual date 5 yearsthereafter will be 85 percent, roundedto the nearest one-hundredth of 1 per-cent, of the arithmetic average of themarket yield averages for the ten 6-

month periods starting with the 6-month period that most recently endedbefore such issue date.

(4) In determining the market-basedvariable investment yield for a bondfrom its first semiannual interest ac-crual date occurring on or after No-vember 1, 1982, or its issue date, which-ever is later, to each successive semi-annual interest accrual date occurringafter 5 years from issue up to originalmaturity, the average market yield foreach additional 6-month period will beincluded in the computation.

351.21 How are redemption valuesdetermined during any extended

maturity period of Series EE sav-ings bonds with issue dates prior toMay 1, 1995?

The redemption value of a bond on agiven interest accrual date during anextended maturity period or periodswill be the higher of the values pro-duced using either the applicable guar-anteed minimum investment yield orthe appropriate market-based variableinvestment yield. The calculation of



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these yields and the resulting redemp-tion values are described below:

(a) Guaranteed minimum investmentyield and resulting values during an ex-tended maturity period. A bond may besubject to one guaranteed minimum in-vestment yield during its original ma-turity period and to another such yieldduring each of its extended maturityperiods.

(1) Bonds entering an extended matu-rity period from May 1, 1989, through Feb-ruary 1, 1993. Bonds that entered an ex-tended maturity period from May 1,

1989, through February 1, 1993, had aguaranteed minimum investment yieldof 6 percent per annum, compoundedsemiannually, during that extendedmaturity period.

(2) Bonds entering an extended matu-rity period on or after March 1, 1993.Bonds that entered or enter an ex-tended maturity period on or afterMarch 1, 1993, have a guaranteed min-imum investment yield of 4 percent perannum, compounded semiannually,during that extended maturity period,or the guaranteed minimum invest-ment yield in effect at the beginning ofthat period.

(3) Determination of values for a bond

during extended maturity periods. Inorder to determine values for a bondduring its first extended maturity pe-riod, we determine the value of thebond at the end of its original maturityperiod using the guaranteed minimuminvestment yield applicable to that pe-riod. This value is then used as thebase upon which interest accrues dur-ing the first extended maturity periodat the applicable guaranteed minimuminvestment yield for that period. Weuse the value thus attained at first ex-tended maturity as the base uponwhich interest accrues during the sec-ond extended maturity period at theapplicable guaranteed minimum in-

vestment yield for that period. We thencompare the resulting semiannual val-ues with the corresponding values de-termined using only the applicablemarket-based variable investmentyields.

(b) Market-based variable investmentyield and resulting values during an ex-tended maturity period. For a bond be-ginning an extended maturity period,the market-based variable investment

yield from its first semiannual interestaccrual date occurring on or after No-vember 1, 1982, or its issue date, which-ever is later, to each semiannual inter-est accrual date occurring on or afterNovember 1, 1989, will be 85 percent,rounded to the nearest one-hundredthof one percent, of the arithmetic aver-age of the market yield averages forthe appropriate number of 6-month pe-riods involved, beginning with the pe-riod from May 1, 1982, or the 6-monthperiod that most recently ended beforethe issue date, whichever period occurs

later. We use the value of a bond on itsfirst semiannual interest accrual dateoccurring on or after November 1, 1982,or its issue date, whichever is later, asthe base upon which interest accruesduring the extended maturity period atthe applicable market-based variableinvestment yield. As described above,the bond will receive the higher of thetwo values: One value produced usingthe applicable market-based variableinvestment yield; and, the other valueproduced using the guaranteed min-imum investment yield.

351.22 When does the redemptionvalue increase for bonds issued

prior to May 1, 1995?(a) Bonds with issue dates from Janu-

ary 1, 1980, through October 1, 1980. Forbonds with issue dates from January 1,1980, through October 1, 1980, the re-demption value increases on the firstday of each month from the thirdthrough the thirtieth month afterissue, and thereafter on the first day ofeach successive 6-month period.

(b) Bonds with issue dates from Novem-ber 1, 1980, through October 1, 1986. Forbonds with issue dates from November1, 1980, through October 1, 1986, the re-demption value increases on the firstday of each month from the thirdthrough the eighteenth month after

issue, and thereafter on the first day ofeach successive 6-month period.

(c) Bonds with issue dates from Novem-ber 1, 1986, through February 1, 1993. Forbonds with issue dates from November1, 1986, through February 1, 1993, the re-demption values increase on the firstday of each month from the thirdthrough the thirtieth month afterissue, and thereafter on the first day ofeach successive 6-month period.



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(d) Bonds with issue dates of March 1,1993, through April 1, 1995. For bondswith issue dates of March 1, 1993,through April 1, 1995, the redemptionvalues increase on the first day of eachmonth from the third through the six-tieth month after issue, and thereaftereither on the first day of each monthor on the first day of each successive 6-month period, whichever accrual sched-ule ensures that the actual yield fromissue date to redemption date is in nocase less than 4 percent per annum,compounded semiannually.

351.23 Are tables of redemption val-ues available for bonds issued priorto May 1, 1995?

You may obtain the appropriateyields and tables by downloading fromour website at www.savingsbonds.gov,contacting us by email [email protected], or by writingus at the following address: Bureau ofthe Public Debt, Parkersburg, WestVirginia 261061328.

SERIES EE SAVINGS BONDS WITH ISSUEDATES FROM MAY 1, 1995, THROUGHAPRIL 1, 1997

351.24 What are the maturity periodsof bonds with issue dates from May1, 1995, through April 1, 1997?

(a) Original maturity. Bonds reachoriginal maturity at 17 years afterissue date.

(b) Final maturity. Series EE savingsbonds have an extended maturity pe-riod of 13 years, and reach final matu-rity at 30 years after the issue date.Bonds cease to earn interest at finalmaturity.

351.25 What were the interest ratesand redemption values for bondswith issue dates from May 1, 1995,through April 1, 1997, during semi-annual rate periods in the first 5

years after issue date?(a) Interest rates. The interest rate for

a Series EE bond bearing an issue dateof May 1, 1995, through April 1, 1997, forsemiannual earning periods during thefirst 5 years from issue date, was theshort-term savings bond rate (see 351.11 for a description of the short-term savings bond rate.)

(b) Redemption values. Redemptionvalues for semiannual accrual dates oc-

curring on or before 5 years from issuedate are calculated in accordance with 351.28.

351.26 What are the interest ratesand redemption values for bondswith issue dates from May 1, 1995through April 1, 1997, during semi-annual rate periods that begin 5years or more after issue date?

(a) Interest rates. The interest rate fora Series EE bond bearing an issue dateof May 1, 1995, through April 1, 1997, forsemiannual earning periods beginning 5

years from issue date through originalmaturity, is the long-term savingsbond rate as defined in 351.12.

(b) Redemption values. We calculateredemption values for semiannual ac-crual dates occurring after 5 yearsfrom issue date, through original ma-turity, in accordance with 351.28, ex-cept that the redemption value at thedate of original maturity shall not beless than the denomination (faceamount or face value).

351.27 What are the interest ratesand redemption values for bondswith issue dates from May 1, 1995,through April 1, 1997, during an ex-tended maturity period?

During an extended maturity periodthe bond will be subject to the termsand conditions in effect when it isissued, and will continue to earn inter-est as described in paragraph 351.26,unless the terms and conditions appli-cable to an extended maturity periodare expressly amended prior to the be-ginning of such period.

351.28 How are redemption valuescalculated for bonds with issuedates from May 1, 1995, through

April 1, 1997?

We determine the redemption valueof a bond on the accrual date imme-diately following each semiannual

earning period as follows:(a) We convert the applicable long-

term or short-term savings bond ratefor the semiannual earning period todecimal form by dividing by 100, andadjust it to a semiannual rate by divid-ing by 2.

(b) Using redemption values for thebase denomination, as defined in 351.16, we then multiply this rate bythe redemption value of the bond at



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the beginning of the semiannual earn-ing period.

(c) We add the resulting interestamount, rounded to the nearest cent,to the redemption value of the bond atthe beginning of the earning period toproduce the redemption value at thenext semiannual accrual date. The re-demption value of a bond remains con-stant between accrual dates.

SERIES EE SAVINGS BONDS WITH ISSUEDATES OF MAY 1, 1997, THROUGH APRIL1, 2005

351.29 What are the maturity periodsof bonds with issue dates of May 1,1997, through April 1, 2005?

(a) Original maturity(1) Bonds withissue dates from May 1, 1997, to May 1,2003. Bonds reach original maturity at17 years after issue date.

(2) Bonds with issue dates of June 1,2003, through April 1, 2005. Bonds reachoriginal maturity at 20 years afterissue date.

(b) Final maturity. Bonds reach finalmaturity at 30 years after the issuedate. Bonds cease to earn interest atfinal maturity.


FR 17288, Apr. 5, 2005]

351.30 What are interest rates andmonthly accruals for Series EEbonds with issue dates of May 1,1997, through April 1, 2005, duringthe original maturity period?

Savings bond rates (defined in

351.13) apply to earnings during the

first semiannual rate period beginning

on or after the effective date of the

rate. Interest is credited on the first

day of each month and compounded

semiannually. Interest accrues begin-

ning with the fourth month from the

issue date. For example, a bond issuedin January has interest first credited

on May 1, which represents one month

of interest because of the 3-month in-

terest penalty. The following table

shows, for any given month of issue

with rates announced each May and

November, the months making up the

semiannual rate period during which

interest is earned at the announced

rate (disregarding the penalty for

bonds redeemed prior to 5 years after

the issue date) and the months in

which the bonds increase in value. This

rate is an annual rate compounded

semiannually.

If issue month isAnd rate announce-ment/effective dateis

Then, semiannual rate periods inwhich interest is earned includemonths of

And bonds increase in valueon 1st day of months of

Jan. or Jul ....................................... May 1 ...................... Jul. through Dec ............................ Aug. through Jan.Feb. or Aug ..................................... May 1 ...................... Aug. through Jan ........................... Sep. through Feb.Mar. or Sep ..................................... May 1 ...................... Sep. through Feb ........................... Oct. through Mar.Apr. or Oct ....................................... May 1 ...................... Oct. through Mar ............................ Nov. through Apr.May or Nov ...................................... May 1 ...................... May through Oct ............................ Jun. through Nov.Jun. or Dec ...................................... May 1 ...................... Jun. through Nov ........................... Jul. through Dec.Jan. or Jul ....................................... Nov. 1 ...................... Jan. through Jun ............................ Feb. through Jul.Feb. or Aug ..................................... Nov. 1 ...................... Feb. through Jul ............................. Mar. through Aug.Mar. or Sep ..................................... Nov. 1 ...................... Mar. through Aug ........................... Apr. through Sep.Apr. or Oct ....................................... Nov. 1 ...................... Apr. through Sep ........................... May through Oct.May or Nov ...................................... Nov. 1 ...................... Nov. through Apr ........................... Dec. through May.Jun. or Dec ...................................... Nov. 1 ...................... Dec. through May .......................... Jan. through Jun.

351.31 What is the interest penalty

for Series EE bonds with issuedates of May 1, 1997, through April1, 2005, that are redeemed less than5 years after the issue date?

If you redeem a Series EE savingsbond with an issue date of May 1, 1997,through April 1, 2005, less than fiveyears following the issue date, we re-duce the overall earning period fromthe issue date by three months. For ex-ample, if you redeem a bond issued

January 1, 1998, 9 months later on Oc-

tober 1, 1998, we will determine the re-demption value by applying the re-

demption value calculation formula de-

scribed in 351.32 and the savings bonds

rate for that bond at 6 months after the

issue date on July 1, 1998. The redemp-

tion value of a bond subject to the 3-



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1The following hypothetical example illus-

trates how this formula is applied:Example, assume a hypothetical savings

bonds rate of 5.00% effective May 1, 2002, for

a bond denominated at $25, with an issue

date of September 1, 1997 and a redemption

value of $16.00 as of September 1, 2002. The

February 1, 2003, redemption value is cal-

culated as follows: Bonds issue dated in Sep-

tember have semiannual rate periods begin-

ning each March 1 and September 1. The first

semiannual rate period to begin on or after

the effective date of the May 1, 2002, rate

would be the period beginning September 1,

2002. PV, the present value, would be the

value of the bond at the beginning of the

semiannual rate period, on September 1, 2002.

The savings bonds rate of 5.00% converted to

a decimal would be 0.05. The number of

months, m, is 5 since 5 full calendar months

(September through January) have lapsedsince the beginning of the rate period. FV is

then the result of the formula:

FV = $16.00 {[1 + (0.05 2)] (5/6)} = $16.33

after rounding to the nearest cent.

Using the example, the FV of a savings

bond with a $50 or larger denomination can

be determined by applying the appropriate

multiple, for example: $16.33 ($50.00/$25.00)

for a bond with a $50.00 face amount; or $16.33

($100.00/$25.00) for a bond with a $100.00 face

amount.

month interest penalty shall not be re-duced below the issue price. This pen-alty does not apply to bonds redeemed5 years or more after the issue date.

[68 FR 24796, May 8, 2003, as amended at 70FR 17288, Apr. 5, 2005]

351.32 How are redemption valuescalculated for Series EE bonds withissue dates of May 1, 1997, through

April 1, 2005?

(a) Formula for redemption value. Wedetermine the redemption value of abond for the accrual date (the first day

of each month beginning with thefourth month from the issue date) inaccordance with this section and thefollowing formula:

FV = PV {[1+(i 2)] (m/6)}

where

FV (future value) = redemption value on re-demption date rounded to the nearest cent.

PV (present value) = redemption value at thebeginning of the semiannual rate period

i = savings bonds rate converted to decimalform by dividing by 100.

m = number of full calendar months out-

standing during the semiannual rate pe-

riod. 1

(b) Value of bonds at original matu-rity(1) Definitive bond. At original ma-turity, the redemption value of a defin-itive bond shall not be less than theface amount/denomination of the bond.

(2) Book-entry bond. At original matu-rity, the redemption value of a book-entry bond shall not be less than dou-ble the purchase price of the bond.

351.33 What are interest rates and re-demption values for Series EEbonds issued May 1, 1997, through

April 1, 2005, during an extendedmaturity period?

During an extended maturity periodthe bond will be subject to the termsand conditions in effect when it isissued and will continue to earn inter-est as described in 351.30, unless theterms and conditions applicable to anextended maturity period are expresslyamended prior to the beginning of suchperiod.

SERIES EE SAVINGS BONDS WITH ISSUEDATES OF MAY 1, 2005, OR THEREAFTER

351.34 What are the maturity periodsof Series EE bonds with issue datesof May 1, 2005, or thereafter?

(a) Original maturity. Bonds reach

original maturity at 20 years after theissue date.

(b) Final maturity. Bonds reach finalmaturity at 30 years after the issuedate. Bonds cease to earn interest atfinal maturity.

[70 FR 17288, Apr. 9, 2005]

351.35 What do I need to know aboutinterest rates, penalties, and re-demption values for Series EEbonds with issue dates of May 1,2005, or thereafter?

(a) Fixed rate or fixed rate of interest.Fixed rate or fixed rate of interestmeans the rate of interest for a SeriesEE savings bond with an issue date of

May 1, 2005, or thereafter, establishedby the Secretary or the Secretarysdesignee.

(b) Determination of fixed rate of inter-est. (1) The Secretary or the Sec-retarys designee determines the fixedrate of interest, which is establishedfor the life of the bond, including theextended maturity period, unless, priorto the beginning of such maturity pe-riod, the Secretary either announces a



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31 CFR Ch. II (7110 Edition) 351.36351.39

different fixed rate applicable to theextended maturity period, or we ex-pressly amend the terms and condi-tions applicable to the extended matu-rity period.

(2) The Secretarys determination ofrates of interest and savings bond re-

demption values is final and conclu-sive.

(c) Announcement of fixed rate. (1) TheSecretary or the Secretarys designeewill furnish a fixed rate of interest inannouncements published each May 1and November 1. The effective date ofthe rates will be the first day of themonth of the announcement.

(2) If the regularly scheduled date forthe announcement is a day when the

Treasury is not open for business, thenthe Secretary will make the announce-ment on the next business day; how-ever, the effective date of the rates re-mains the first day of the month of theannouncement.

(3) The Secretary may announcerates at any other time.

(4) The most recently announcedfixed rate applies only to bonds pur-chased during the six months followingthe announcement, or for any other pe-

riod of time announced by the Sec-retary.

(d) Monthly accruals. Interest accrueson the first day of each month; that is,we add the interest earned on a bondduring any given month to its value atthe beginning of the following month.The accrued interest compounds semi-annually.

(e) Interest penalty for Series EE bondsredeemed less than 5 years after issuedate. If you redeem a bond with anissue date of May 1, 2005, or thereafter,less than five years following the issuedate, we reduce the overall earning pe-riod from the issue date by threemonths. However, the redemption

value of a bond subject to the 3-monthinterest penalty shall not be reducedbelow the issue price. This penalty doesnot apply to bonds redeemed 5 years ormore after the issue date.

(f) Redemption value of Series EE bondsat original maturity(1) Definitive bond.At original maturity, the redemptionvalue of a definitive bond shall not beless than the face amount/denomina-tion of the bond.

(2) Book-entry bond. At original matu-rity, the redemption value of a book-entry bond shall not be less than dou-ble the purchase price of the bond.

[70 FR 17289, Apr. 9, 2005]

351.36351.39 [Reserved]

Subpart CDefinitive Series EESavings Bonds

351.40 What are the denominationsand prices of definitive Series EEsavings bonds?

We issue definitive bonds in denomi-nations of $50, $75, $100, $200, $500,$1,000, $5,000, and $10,000. The purchaseprice is one-half the amount of the de-nomination.

351.41 When are definitive Series EEsavings bonds validly issued?

A definitive bond is validly issuedwhen it is registered as provided in 31CFR part 353, and when it bears anissue date and the validation indicia ofan authorized issuing agent.

351.42 What is the issue date of a de-finitive Series EE savings bond?

The issue date of a definitive bond is

the first day of the month in which anauthorized issuing agent receives pay-ment of the issue price.

351.43 Are taxpayer identificationnumbers (TINs) required for theregistration of a definitive SeriesEE savings bond?

The registration of a definitive Se-ries EE savings bond must include theTIN of the owner or first-named co-owner. The TIN of the second-namedcoowner or beneficiary is not requiredbut its inclusion is desirable. If thebond is being purchased as a gift oraward and the owners TIN is notknown, the TIN of the purchaser must

be included in the registration of thebond.

[71 FR 46857, Aug. 15, 2006]

351.44 What amount of definitive Se-ries EE savings bonds may I pur-chase per year?

The principal amount of definitiveSeries EE savings bonds that may bepurchased in the name and TIN of anyperson in any calendar year is limited



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2However, an organization serving as an

issuing agent because of its status as an em-

ployer or an organization operating an em-

ployers payroll savings plan under 317.2(c)

may sell bonds only through payroll savings

plans.

to $5,000. See 31 CFR 353.10 and 353.11 of

this Chapter for rules governing the

computation of amounts and the spe-

cial limitation for employee plans.


FR 67853, Dec. 3, 2007]

351.45 What happens if I purchasedefinitive Series EE savings bondsin excess of the maximum annualamount?

If you have bonds issued during any

one calendar year in excess of the pre-

scribed maximum annual amount, wereserve the right to take any action we

deem necessary to adjust the excess.

You should obtain instructions for ad-

justment of the excess from us at the

following address: email at

[email protected], or writing to

Bureau of the Public Debt, Parkers-

burg, WV 261061328.

351.46 May I purchase definitive Se-ries EE savings bonds over-the-counter?

You may purchase definitive bonds

over-the-counter through any issuing

agent qualified under 31 CFR part 317.2

To purchase over-the-counter, youmust submit a purchase application,

along with payment in the amount of

the issue price to an issuing agent. You

may use any means of payment accept-

able to the issuing agent. You may au-

thorize purchases on a recurring basis

in your application. The issuing agent

bears the burden of collection and the

risk of loss for non-collection or return

of the payment.

351.47 May I purchase definitive Se-ries EE savings bonds through apayroll savings plan?

You may purchase definitive bonds in

denominations of $100 or higher

through deductions from your pay ifyour employer maintains a payroll sav-

ings plan. An authorized issuing agent

must issue the bonds.

351.48 May I purchase definitive Se-ries EE savings bonds through em-ployee thrift, savings, vacation, andsimilar plans?

You may purchase bonds registeredin the names of trustees of employeeplans in book-entry form in multiplesof $100 through a designated FederalReserve Bank, after we have approvedthe plan as eligible for the special limi-tation under 353.13 of this chapter.

351.49 How are definitive Series EEsavings bonds delivered?

We deliver definitive bonds by mailto your address. If your address is with-in the United States, its territories orpossessions, or the Commonwealth ofPuerto Rico, we will deliver bonds atour risk. Bonds delivered elsewherewill be delivered at your risk; however,at our discretion, we may require deliv-ery to an address within the UnitedStates, or refuse delivery to addressesin countries referred to in part 211 of

this chapter.

351.50 How is payment made whendefinitive Series EE savings bondsare redeemed?

(a) Payment in general. A financial in-stitution qualified as a paying agentunder the provisions of 31 CFR part 321will pay the current redemption valueof a definitive Series EE bond pre-sented for payment. The bond mustmeet the requirements for paymentspecified in 31 CFR part 353. You must

establish your identity and entitle-ment to redemption to the satisfactionof the agent, in accordance with our in-structions and identification guide-lines, and must sign and complete therequest for payment.

(b) Payment to beneficiary or legal rep-resentative. A paying agent may, but isnot required to, pay the current re-

demption value of a definitive SeriesEE savings bond upon the request of abeneficiary if he or she survives theowner, or a legal representative des-ignated in the bond registration byname and capacity, or a court-ap-pointed legal representative of thelast-deceased registrants estate pro-vided:

(1) The bond is in order for payment;and



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(2) The presenter establishes his or

her identity to the satisfaction of the

agent in accordance with our instruc-

tions and identification guidelines, and

signs and completes the request for

payment.

351.51 How can I find out what mydefinitive Series EE savings bondsare worth?

(a) Redemption values. We make re-

demption values available for defini-

tive bonds in various formats and

media.(1) You may determine the redemp-

tion value for definitive bonds on the

Internet at .

(2) You may download savings bond

calculators from the Internet at .

(3) You may obtain paper tables from

the Bureau of the Public Debt, Par-

kersburg, West Virginia 261061328. We

reserve the right to cease making

paper tables of redemption values

available.

(b) Redemption penalty. For bonds

issued after May 1, 1997, redemption

values published in the tables reflectthe three-month interest penalty ap-

plied to bonds redeemed prior to five

years from the issue date.

351.52351.59 [Reserved]

Subpart DBook-Entry Series EESavings Bonds

351.60 How are book-entry Series EEsavings bonds purchased and held?

Book-entry bonds must be purchased

and held online through your New

Treasury Direct account. We provide

instructions for opening an account on-

line at .

351.61 What are the denominationsand prices of book-entry Series EEsavings bonds?

Book-entry bonds are issued in a

minimum amount of $25, with addi-

tional increments of one cent.

351.62 How is payment made for pur-chases of book-entry Series EE sav-ings bonds?

You may only purchase book-entrySeries EE savings bonds online throughyour New Treasury Direct account.You may pay for your securitiesthrough a debit to your designated ac-count at a United States depository fi-nancial institution, or by applying theredemption proceeds of a certificate ofindebtedness held in your New Treas-ury Direct account.

[69 FR 50308, Aug. 16, 2004]

351.63 How are redemption paymentsmade for my redeemed book-entrySeries EE savings bonds?

We will make payments electroni-cally by direct deposit, using the ACHmethod, to your designated account ata United States depository financial in-stitution. You may also direct that apayment be used to purchase a certifi-cate of indebtedness to be held in yourNew Treasury Direct account.

[69 FR 50308, Aug. 16, 2004]

351.64 What is the issue date of abook-entry Series EE savings bond?

The issue date of a book-entry SeriesEE savings bond is the first day of themonth in which the security posts tothe current holdings of the accountowner.

[69 FR 50308, Aug. 16, 2004]

351.65 What amount of book-entrySeries EE savings bonds may I ac-quire per year?

The principal amount of book-entrySeries EE savings bonds that you mayacquire in your name and TIN per cal-endar year is limited to $5,000.

[72 FR 67853, Dec. 3, 2007]

351.66 What book-entry Series EE

savings bonds are included in thecomputation?

(a) We include all bonds that you pur-chased in that calendar year.

(b) Bonds purchased as gifts or in afiduciary capacity are not included inthe computation for the purchaser.

(c) Bonds transferred or deliveredfrom one New Treasury Direct accountto another New Treasury Direct ac-count are included in the computation



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3Example: Calculated value of $25.044

rounds to $25.04; calculated value of $25.045

rounds to $25.05.

for the recipient, unless the recipienthas become entitled to the transferredbonds due to the death of the reg-istered owner.

351.67 What happens if any personpurchases book-entry Series EEsavings bonds in excess of the max-imum annual amount?

We reserve the right to take any ac-tion we deem necessary to adjust theexcess, including the right to removethe excess bonds from your New Treas-ury Direct account and refund the pay-

ment price to your bank account ofrecord using the ACH method of pay-ment.

351.68 Are taxpayer identificationnumbers (TINs) required for reg-istration of book-entry Series EEsavings bonds?

The TIN of each person named in theregistration is required to purchase abook-entry bond.

351.69 When is a book-entry SeriesEE savings bond validly issued?

A book-entry bond is validly issuedwhen it is posted to your New TreasuryDirect account.

351.70 How are redemption valuescalculated for book-entry Series EEsavings bonds?

We base current redemption values(CRV) for book-entry Series EE savingsbonds on the definitive savings bondCRV. We use the CRV for a $100 prin-cipal amount as calculated in 351.16 tocalculate a CRV prorated to the book-entry principal investment amount forthe corresponding issue and redemp-tion dates. Calculated book-entry CRVwill be rounded to the nearest onecent. 3 The formula is as follows:

[Book-entry principal investment $100] [CRV value for $100 principal

amount].

351.71 How can I find out what mybook-entry Series EE savings bondsare worth?

(a) Redemption values. You may ac-cess redemption values for your book-

entry bonds through your New Treas-

ury Direct account.

(b) Redemption penalty. Redemption

values shown in your New Treasury Di-

rect account for bonds that are within

5 years from issue date reflect the

three-month interest penalty applied

to bonds redeemed prior to five years

from the issue date.

351.72351.80 [Reserved]

Subpart EMiscellaneous

Provisions 351.81 Is the Education Savings Bond

Program available for Series EEsavings bonds?

You may be able to exclude from in-

come for Federal income tax purposes

all or part of the interest received on

the redemption of qualified bonds dur-

ing the year. To qualify for the pro-

gram, you or the coowner (in the case

of definitive savings bonds) must have

paid qualified higher education ex-

penses during the same year. You also

must have satisfied certain other con-

ditions. This exclusion is known as the

Education Savings Bond Program. In-formation about the program can be

found in Internal Revenue Service Pub-

lications. (For example, see Publica-

tion 17, Your Federal Income Tax,

Publication 550, Investment Income

and Expenses, and Publication 970,

Tax Benefits for Higher Education.)

These publications are available on the

IRS Web site at http://www.irs.gov.

351.82 Does Public Debt prohibit theissuance of Series EE savings bondsin a chain letter scheme?

We do not permit bonds to be issued

in a chain letter or pyramid scheme.

We authorize an issuing agent to refuse

to issue a bond or accept a purchaseorder if there is reason to believe that

a purchase is connected with a chain

letter. The agents decision is final.

351.83 May Public Debt issue SeriesEE savings bonds only in book-entry form?

We reserve the right to issue bonds

only in book-entry form.



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351.84 Does Public Debt make anyreservations as to issue of Series EEsavings bonds?

We may reject any application forSeries EE bonds, in whole or in part.We may refuse to issue, or permit to beissued, any bonds in any case or classof cases, if we deem the action to be inthe public interest. Our action in anysuch respect is final.

351.85 May Public Debt waive anyprovision in this part?

We may waive or modify any provi-

sion of this part in any particular caseor class of cases for the convenience ofthe United States or in order to relieveany person or persons of unnecessaryhardship:

(a) If such action would not be incon-sistent with law or equity;

(b) If it does not impair any material

existing rights; and

(c) If we are satisfied that such ac-

tion would not subject the United

States to any substantial expense or li-

ability.

351.86 What is the role of Federal Re-serve Banks and Branches?

(a) Federal Reserve Banks and

Branches are fiscal agents of the

United States. They are authorized to

perform such services as we may re-

quest of them, in connection with theissue, servicing and redemption of Se-

ries EE bonds.

(b) We have currently designated the

following Federal Reserve Offices to

provide savings bond services:

Servicing site Reserve district served Geographic area served

Federal Reserve Bank, Buffalo Branch, 160 Dela-ware Avenue, Buffalo, NY 14202.

New York, Boston ......... Connecticut, Maine, Massachusetts, New Hamp-shire, New Jersey (northern half), New York,Rhode Island, Vermont, Puerto Rico, Virgin Is-lands.

Federal Reserve Bank, Pittsburgh Branch, 717Grant Street, Pittsburgh, PA 15219.

Cleveland, Philadelphia Delaware, Kentucky (eastern half), New Jersey,(southern half), Ohio, Pennsylvania, West Vir-ginia (northern panhandle only).

Federal Reserve Bank of Richmond, 701 EastByrd Street, Richmond, VA 23219.

Richmond, Atlanta ......... Alabama, District of Columbia, Florida, Georgia,Louisiana (southern half), Maryland, Mis-sissippi (southern half), North Carolina, South

Carolina, Tennessee (eastern half), Virginia,West Virginia (except northern panhandle).

Federal Reserve Bank of Minneapolis, 90 Hen-nepin Avenue, Minneapolis, MN 55401.

Minneapolis, Chicago. ... Illinois (northern half), Indiana (northern half),Iowa, Michigan, Minnesota, Montana, NorthDakota, South Dakota, Wisconsin.

Federal Reserve Bank of Kansas City, 925 GrandBoulevard, Kansas City, MO 64106.

Dallas, San Francisco,Kansas City, St. Louis.

Alaska, Arizona, Arkansas, California, Colorado,Hawaii, Idaho, Illinois (southern half), Indiana(southern half), Indiana (southern half), Kan-sas, Kentucky (western half), Louisiana (north-ern half), Mississippi (northern half), Missouri,Nebraska, Nevada, New Mexico, Oklahoma,Oregon, Tennessee (western half), Texas,Utah, Washington, Wyoming, Guam.

351.87 May Public Debt revise, sup-plement or amend the terms of thisoffering?

We may revise, supplement or amend

the terms of this offering at any time.

APPENDIX TO PART 351TAX

CONSIDERATIONS

1. What are some general tax considerations?

General. Interest on savings bonds is sub-

ject to taxes imposed under the Internal

Revenue Code of 1986, as amended. The bonds

are exempt from taxation by any State or

political subdivision of a State, except for

estate or inheritance taxes. (See 31 U.S.C.

3124.)

2. What reporting methods are available for

savings bonds?

(a)Reporting methods.

You may use either

of the following two methods for reporting

the increase in the redemption value of the

bond for Federal income tax purposes:

(1) Cash basis method. You may defer re-

porting the increase to the year of final ma-

turity, redemption, or other disposition,

whichever is earliest; or

(2) Accrual basis method. You may elect to

report the increase each year, in which case

the election applies to all Series EE bonds



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Fiscal Service, Treasury

that you then own, those subsequently ac-

quired, and to any other obligations pur-

chased on a discount basis.(b) Changing methods. If you use the cash

basis method, you may change to the accrual

basis method without obtaining permission

from the Internal Revenue Service. However,

once you elect to use the accrual basis meth-

od in paragraph (a)(2), you may change the

method of reporting the increase only by fol-

lowing the specific procedures prescribed by

the Internal Revenue Service for making a

method change. For further information, you

may contact the Internal Revenue Service

director for your area, or the Internal Rev-

enue Service, Washington, DC 20224.

3. What transactions have potential tax con-sequences?

The following types of transactions, among

others, may have potential tax con-

sequences:(a) A reissue that affects the rights of any

of the persons named on a definitive Series

EE savings bond may have tax consequences

for the owner.(b) The transfer of a book-entry Series EE

savings bond from one owner to another may

have tax consequences for the transferor.(c) The redemption of a book-entry Series

EE savings bond by the secondary owner

may have tax consequences for the primary

owner.

(d) The purchase of a Series EE savings

bond as a gift may have gift tax con-sequences.

DoTreas. Circular 1-80

Documents

Transcript of DoTreas. Circular 1-80