may consider necessary or advisable, (b) a bond of indemnity, with or without surety, in any case where he may consider such a bond necessary for the protection of the interests of the United States of America, and (c) without prior notice, that appropriate taxpayer identifying numbers be furnished for issue, reissue, or payment of any savings bond. § 315.92

Preservation of rights.

Nothing contained in these regulations shall be construed to limit or restrict existing rights which holders of savings bonds heretofore issued may have acquired under the circulars offering the bonds for sale or under the regulations in force at the time of purchase. § 315.93

Supplements, amendments, or

$75

$100.

$200

$500_.

$1,000

$10,000 1.

$100,000 1.

Purchase price

$18.75

37.50

56.25

75.00

150.00

375.00

750.00

7,500.00 75,000.00

1 The $10,000 and $100,000 denominations are available only for purchase by trustees of employees' savings and savings and vacation plans (see sec. 316.5 (b)).

(c) Inscription and issue. At the time of issue the issuing agent will (1) inscribe on the face of each bond the name and address of the owner, and the name of the beneficiary, if any, or the name and address of the first-named coowner and the name of the other coowner, (2) enter in the upper right-hand portion of the bond the issue date, and (3) imprint the agent's dating stamp in the lower righthand portion to show the date the bond is actually inscribed. A bond shall be valid only if an authorized issuing agent receives payment therefor and duly inscribes, dates, stamps, and delivers it in accordance with the purchaser's instructions. The Department of the Treasury may require, without prior notice, that the appropriate taxpayer identifying number be furnished for inclusion in the inscription.

2 The number required to be used on tax returns and other documents submitted to the Internal Revenue Service (an individual's social security account number or employer identification number). Until it becomes mandatory, issuing agents for Series E bonds under any payroll savings plan desiring to place taxpayer identifying numbers on bonds should obtain instructions from the Bureau of the Public Debt, Washington, D.C. 20220.

(d) Term. A Series E bond shall be dated as of the first day of the month in which payment of the purchase price is received by an agent authorized to issue the bonds. This date is the issue date and the bond will mature and be payable at the original maturity value, shown in table 1 hereof, 5 years and 10 months from the issue date. The bond may not be called for redemption by the Secretary of the Treasury prior to maturity or the end of any authorized extension period (see § 316.8(a)(1)). The bond may be redeemed at the owner's option at any time after 2 months from issue date at fixed redemption values. However, the Department of the Treasury may require reasonable notice of presentation for redemption prior to maturity or any extended maturity period.

(e) Investment yield (interest). The investment yield (interest) on a Series E bond will be approximately 52 percent per annum, compounded semiannually, if the bond is held to maturity, but the yield will be less if the bond is redeemed prior thereto. The interest will be paid as a part of the redemption value. For the first 6 months from issue date, the bond will be redeemable only at purchase price. Thereafter, its redemption value will increase at the beginning of each successive half-year period. The final interest accrual period is 4 months. See Table 1.

(f) Outstanding bonds with issue dates June 1, 1970, or thereafter. Outstanding Series E bonds with issue dates of June 1, 1970, or thereafter, are deemed to be Series E bonds issued under the terms of this amendment and the investment yield provided for in paragraph (e) of this section is applicable to such bonds. Stock for Series E bonds on sale prior to June 1, 1970, will be used until such time as new stock is printed and supplied to issuing agents. Such bonds have the new investment yield and all other privileges as fully as if expressly set forth in the text of the bonds. It will be unnecessary for owners to exchange bonds issued on old stock for bonds on new stock as all paying agents will redeem the bonds in accordance with the schedule of redemption values set forth in Table 1. However, when the new stock becomes available, issuance thereon may be obtained by presentation for that purpose of bonds issued on old stock to any Federal Reserve Bank or Branch, or to the Treas

(a) General. Generally, only residents of the United States, its territories and possessions, the Commonwealth of Puerto Rico, the Canal Zone, and citizens of the United States temporarily residing abroad are eligible to be named as owners of Series E bonds. The bonds may be registered in the names of natural persons in their own right as provided in paragraph (b) of this section, and in the names and titles or capacities of fiduciaries and organizations as provided in paragraph (c) of this section. Full information regarding authorized forms of registration and restrictions with respect thereto will be found in the governing regulations.

(b) Natural persons in their own right. The bonds may be registered in the names of natural persons (whether adults or minors) in their own right, in single ownership, coownership, and beneficiary forms.

(c) Others. The bonds may be registered in single ownership form in the names of fiduciaries and private and public organizations, as follows:

(1) Fiduciaries. In the names of and showing the titles or capacities of any persons or organizations, public or private, as fiduciaries (including trustees, legal guardians or similar representatives, and certain custodians), but not where the fiduciary would hold the bonds merely or principally as security for the performance of a duty, obligation, or service.

(2) Private and public organizations. In the names of private or public organizations (including private corporations, partnerships, and unincorporated associations, and States, counties, public

3 Copies may be obtained from any Federal Reserve Bank or Branch, or the Bureau of the Public Debt, Washington, D.C. 20220, or its Chicago Office, 536 South Clark Street, Chicago, Ill. 60605.

corporations, and other public bodies) in their own right, but not in the names of commercial banks."

§ 316.5

Limitation on holdings.

The amount of Series E bonds originally issued during any 1 calendar year that may be held by any one person, at any one time, computed in accordance with the governing regulations, is limited, as follows:

(a) General limitation. $5,000 (issue price) for the calendar year 1969 and each calendar year thereafter."

(b) Special limitation for employees' savings plans. $2,000 (face amount) multiplied by the highest number of participants in any employees' savings plan, as defined in subparagraph (1) of this paragraph, at any time during the year in which the bonds are issued."

(1) Definition of plan and conditions of eligibility. (i) The employees' savings plan must have been established by the employer for the exclusive and irrevocable benefit of his employees or their beneficiaries, afford employees the means of making regular savings from their wages through payroll deductions, and provide for employer contributions to be added to such savings.

(ii) The entire assets thereof must be credited to the individual accounts of participating employees and assets credited to the account of an employee may be distributed only to him or his beneficiary, except as otherwise provided herein.

• Commercial banks, as defined in § 315.7 (c) (1) of Department Circular No. 530, current revision, for this purpose are those accepting demand deposits.

5 Investors who purchased less than $5,000 (issue price) of the bonds prior to the effective date of these regulations will be entitled only to purchase enough to bring their total for the year to that amount. Investors who purchased more than that amount prior to the effective date will not be entitled to purchase additional bonds during the calendar year.

6 The proceeds of redemption of bonds of Series F, G, J, and K, all now matured, may be used by owners for the purchase of Series E bonds without regard to the limitation under the conditions and restrictions set forth in § 316.5(b) of the seventh revision of this circular.

'Savings and vacation plans may be eligible for this special limitation. Questions concerning eligibility of such plans should be addressed to the Bureau of Public Debt, Division of Loans and Currency Branch, 536 South Clark Street, Chicago, Ill. 60605.

(iii) Series E bonds may be purchased only with assets credited to the accounts of participating employees and only if the amount taken from any account at any time for that purpose is equal to the purchase price of a bond or bonds in an authorized denomination or denominations, and shares therein are credited to the accounts of the individuals from which the purchase price thereof was derived, in amounts corresponding with their shares. For example, if $37.50 credited to the account of John Jones is commingled with funds credited to the accounts of other employees to make a total of $7,500, with which a Series E bond in the denomination of $10,000 (face amount) is purchased in February 1966 and registered in the name and title of the trustee, the plan must provide, in effect, that John Jones' account shall be credited to show that he is the owner of a Series E bond in the denomination of $50 (face amount) bearing issue date of February 1, 1966.

employee

(iv) Each participating shall have an irrevocable right at any time to demand and receive from the trustee all assets credited to his account or the value thereof, if he so prefers, without regard to any condition other than the loss or suspension of the privilege of participating further in the plan. However, a plan will not be deemed to be inconsistent herewith if it limits or modifies the exercise of any such right by providing that the employer's contribution does not vest absolutely until the employee shall have made contributions under the plan in each of not more than 60 calendar months succeeding the month for which the employer's contribution is made.

(v) Upon the death of an employee, his beneficiary shall have the absolute and unconditional right to demand and receive from the trustee all assets credited to the account of the employee, or the value thereof, if he so prefers.

(vi) When settlement is made with an employee or his beneficiary with respect to any Series E bond registered in the name and title of the trustee in which the employee has a share (see subdivisions (ii) and (iii) of this subparagraph), the bond must be submitted for redemption or reissue to the extent of such share. If an employee or his beneficiary is to receive distribution in kind, bonds bearing the same issue dates as those credited to the employee's account

will be reissued in the name of the distributee to the extent to which he is entitled, in authorized denominations, in any authorized form of registration, upon the request and certification of the trustee in accordance with the governing regulations.

(2) Definition of terms used in this subsection-related provisions. (i) The term "savings plan" includes any regulations issued under the plan with regard to Series E bonds. A trustee desiring to purchase bonds in excess of the general limitation in any calendar year should submit to the Federal Reserve Bank of the District, a copy of (a) the plan, (b) any such regulations, and (c) the trust agreement, all certified to be true copies, in order to establish its eligibility.

(ii) The term "assets" means all funds, including the employees' contributions and employer's contributions and assets purchased therewith as well as accretions thereto, such as dividends on stock, the increment in value on bonds and all other income; but, notwithstanding any other provision of this subsection, the right to demand and receive "all assets" credited to the account of an employee shall not be construed to require the distribution of assets in kind when it would not be possible or practicable to make such distribution; for example, Series E bonds may not be reissued in unauthorized denominations, and fractional shares of stock are not readily distributable in kind.

(iii) The term "beneficiary" means the person or persons, if any, designated by the employee in accordance with the terms of the plan to receive the benefits of the trust upon his death or the estate of the employee, and the term "distributee" means the employee or his beneficiary.

Series E bonds may be purchased, as follows:

(a) Over-the-counter for cash—(1) Bonds registered in names of natural persons in their own right only. At such incorporated banks, trust companies, and other agencies as have been duly qualified as issuing agents and at selected United States post offices.

(2) Bonds registered in names of trustees of employees' savings plans. At such incorporated bank, trust company, or other agency, duly qualified as an issuing agent, provided the agent is trustee of an approved employees' savings plan

eligible for the special limitation in § 316.5(b) and prior approval to issue the bonds is obtained from the Federal Reserve Bank of the agent's district.

(3) Bonds registered in all authorized forms. At Federal Reserve Banks and Branches and at the Office of the Treasurer of the United States, Securities Division, Washington, D.C. 20220.

(b) On mail order. By mail upon application to any Federal Reserve Bank or Branch or to the Office of the Treasurer of the United States, Securities Division, Washington, D.C. 20220, accompanied by a remittance to cover the issue price. Any form of exchange, including personal checks, will be accepted subject to collection. Checks or other forms of exchange should be drawn to the order of the Federal Reserve Bank or the Treasurer of the United States, as the case may be. Checks payable by endorsement are not acceptable. Any depositary qualified pursuant to the provisions of Treasury Department Circular No. 92, current revision (Part 203 of this chapter), will be permitted to make payment by credit for bonds applied for on behalf of its customers up to any amount for which it shall be qualified in excess of existing deposits, when so notified by the Federal Reserve Bank of its district.

(c) Savings stamps. The sale of U.S. Savings Stamps was terminated effective June 30, 1970. However, outstanding stamps affixed in fully or partially completed albums may be used to purchase Series E bonds at banks or other financial institutions authorized to issue such bonds. Otherwise, the stamps may be redeemed for cash at post offices.

[35 F.R. 703, Jan. 17, 1970, as amended at 35 F.R. 17602, Nov. 14, 1970]

§ 316.7 Delivery of bonds by mail.

Issuing agents are authorized to deliver Series E bonds by mail at the risk and expense of the United States, at the address given by the purchaser, but only within the United States, its territories and possessions, the Commonwealth of Puerto Rico, and the Canal Zone. No mail deliveries elsewhere will be made. If purchased by citizens of the United States temporarily residing abroad, the bonds will be delivered at such address in the United States as the purchaser directs. § 316.8 Extended terms and improved yields for outstanding bonds.

(a) Extended maturity periods—(1) General. The terms "extended maturity

period," "second extended maturity period," and "third extended maturity period," when used herein, refer to the intervals after the original maturity dates during which owners may retain their bonds and continue to earn interest on the maturity values or the extended maturity values. No special action is required of owners desiring to take advantage of any extensions heretofore or herein granted."

(2) Bonds with issue dates May 1, 1941, through April 1, 1952. Owners of Series E bonds with issue dates of May 1, 1941, through April 1, 1952, may retain their bonds for a third and final extended maturity period of 10 years.

(3) Bonds with issue dates May 1, 1952, through January 1, 1957. Owners of Series E bonds with issue dates of May 1, 1952, through January 1, 1957, may retain their bonds for a second extended maturity period of 10 years.

(4) Bonds with issue dates of February 1, 1957, or thereafter. Owners of Series E bonds with issue dates of February 1, 1957, or thereafter, may retain their bonds for an extended maturity period of 10 years.

(b) Improved yields 10(1) Outstanding bonds. The investment yield on all outstanding Series E bonds is hereby increased as follows:

(i) Bonds in original maturity period on June 1, 1970. One-half of 1 percent per annum, compounded semiannually, for the remaining period to the maturity date, but only if the bonds are held to that date. The increase will be calculated beginning with the first 6-month interest accrual period starting on or after June 1, 1970. Interim redemption values remain unchanged.

(ii) Bonds entering extended maturity period between June 1, 1970, and December 1, 1971, inclusive. To 52 percent per annum, compounded semiannually, for the extended maturity period.

8 The redemption value of any bond at the maturity date, the extended maturity date or the second extended maturity date is the base, in each instance, upon which interest will accrue during the period following.

'The tables incorporated herein, arranged according to issue dates, show current redemption values and investment yields.

10 See Appendix for summary of investment yields to maturity, extended maturity and second extended maturity dates under regulations heretofore and herein prescribed.

(iii) Bonds in an extended maturity period on June 1, 1970. One-half of 1 percent per annum, compounded semiannually, for the remaining period to next maturity. The increase will begin with the first interest accrual period starting on or after June 1, 1970.

(iv) Bonds with issue dates May 1, 1941, through May 1, 1949. For the remaining period to the second extended maturity date.

(2) Bonds entering third extended maturity period. The investment yield (interest) for the third extended maturity period for all outstanding bonds entering this period will be at the rate prevailing for Series E bonds being issued at the time the extension begins. Tables showing the yields and the redemption values will be published prior to or as the bonds enter the extension. The yields shown in Tables 2-A and 3-A hereof apply to bonds with issue dates May 1, 1941, and June 1, 1941. Table 3-A will also apply to bonds with issue dates of July 1, 1941, through November 1, 1941, inclusive, unless tables showing different yields are published prior to or as these bonds enter the third extended maturity period.

(3) Presently authorized extensions. The investment yield for any presentlyauthorized extension period for which tables of redemption values and investment yields are not announced and published herein will be at the rate in effect for Series E bonds being currently issued on the maturity date or extended maturity date, as the case may be.

[35 F.R. 703, Jan. 17, 1970, as amended at 35 F.R. 17602, Nov. 14, 1970; 36 F.R. 9866, May 29, 1971]

(a) General. For the purpose of determining taxes and tax exemptions, the increment in value represented by the difference between the price paid for Series E bonds (which are issued on a discount basis) and the redemption value received therefor shall be considered as interest. Such interest is subject to all taxes imposed under the Internal Revenue Code of 1954. The bonds are subject to estate, inheritance, gift, or other excise taxes, whether Federal or State, but are exempt from all taxation now or hereafter imposed on the principal or interest thereof by any State, or any of the possessions of the United States, or by any local taxing authority.