PART 342—OFFERING OF UNITED STATES SAVINGS NOTES Authority: 31 U.S.C. 3103, 5 U.S.C. 301. Source: 57 FR 14282, Apr. 17, 1992, unless otherwise noted. § 342.0 Offering of notes. The Secretary of the Treasury offered for sale to the people of the United States, United States Savings Notes (also known as “Freedom Shares”, and generally referred to herein as “savings notes” or “notes”). The notes could be purchased only in combination with Series E savings bonds of the same or greater denomination. This offering was effective from May 1, 1967 until the close of business October 31, 1970 when the sale of savings notes was terminated by the Secretary of the Treasury. § 342.1 Definition of words and terms used in this part. (a) Payroll savings plan (b) Quarter § 342.2 Description of notes. (a) General. (b) Term. (c) Denominations and purchase prices. Denomination Purchase price $25 $20.25 50 40.50 75 60.75 100 81.00 Interest is paid as a part of the redemption value. A note increased in value one year after issue date and increases at the beginning of each half-year period thereafter until final maturity, at which time interest ceases to accrue. Interest on a note which is redeemed before maturity ceases to accrue at the end of the interest period next preceding the redemption date, except that if the note is redeemed on a date on which the redemption value increases, interest ceases to accrue on that date. (d) Inscription and issue. (1) Inscribed on the face of each note the name and address of the owner and the name of the beneficiary, if any, or the names of the coowner; (2) Entered the issue date in the right-hand portion of the note in the space provided for that purpose; and (3) Imprinted thereunder, by use of the agent's validation indicia for the issue of Series E savings bonds, the date the note was actually inscribed. A note is valid only if an authorized issuing agent received payment therefor and duly inscribed, dated, imprinted validation indicia on the note and delivered it. § 342.3 Extended terms and yields for outstanding notes. (a) Extended maturity periods. extended maturity period second extended maturity period third extended maturity period Issue dates—1st day of Previous maturities Previous maturity dates—1st day of yrs. mos. May 1967-Oct. 1970 24 6 Nov. 1991-Apr. 1995. Issue dates—1st day of Additional extended maturity period Life of notes—yrs. yrs. mos. May 1967-Oct. 1970 5 6 30 Issue dates—1st day of Final maturity dates—1st day of May 1967-Oct. 1970 May 1997-Oct. 2000 (b) Guaranteed minimum investment yield General. (i) For savings notes in extended maturity periods prior to November 1, 1982, the guaranteed minimum investment yield was 8.5 percent per annum, compounded semiannually, effective for the period from the first semiannual interest accrual date on or after May 1, 1981, through their next extended maturity dates on or after November 1, 1982. (ii) For savings notes that entered extended maturity periods during the period of November 1, 1982, through October 1, 1986, the guaranteed minimum investment yield was 7.5 percent per annum, compounded semiannually, for such periods, including notes that entered into an extended maturity period, as shown below: Issue dates—1st day of— Extension Entered—1st day of May 1968-Oct. 1970 2nd Nov. 1982-Apr. 1985. (iii) For savings notes that entered into extended maturity periods during the period of November 1, 1986, through February 1, 1993, the guaranteed minimum investment yield is 6 percent per annum, compounded semiannually, for such periods, including notes that entered into an extended maturity period, as shown below: Issue dates—1st day of— Extension Entered—1st day of May 1967-Aug. 1968 3rd (final) Nov. 1991-Feb. 1993. (iv) For savings notes that entered or enter extended maturity periods on or after March 1, 1993, the guaranteed minimum investment yield is 4 percent per annum, compounded semiannually, for such periods, or the investment yield in effect at the beginning of such periods, including notes that enter into an extended maturity period, as shown below: Issue dates—1st day of— Extension Entered—1st day of Sep. 1968-Oct. 1970 3rd (final) Mar. 1993-Apr. 1995. (2) Eleven-year bonus. (c) Market-based variable investment yield. (1) For each 6-month period, starting with the period beginning May 1, 1982, the average market yield on outstanding marketable Treasury securities with a remaining term to maturity of approximately 5 years during such period as determined. Such determination by the Secretary of the Treasury or his or her delegate shall be final and conclusive. (2) For notes which entered an extended maturity period prior to May 1, 1989, the market-based variable investment yield from the first semiannual interest accrual date occurring on or after November 1, 1982 to each semiannual interest accrual date occuring on or after November 1, 1987, will be 85 percent, rounded to the nearest one-fourth of one percent, of the arithmetic average of the market yield averages, as determined in accordance with paragraph (c)(1) of this section, for the appropriate number of 6-month periods involved, starting with the period beginning May 1, 1982. (3) For notes which entered an extended maturity period on or after May 1, 1989, the market-based variable investment yield from the first semiannual interest accrual date occurring on or after November 1, 1982 to each semiannual interest accrual date occurring on or after November 1, 1989, will be 85 percent, rounded to the nearest one-hundredth of one percent, of the arithmetic average of the market yield averages, as determined in accordance with paragraph (c)(1) of this section for the appropriate number of 6-month periods involved, starting with the period beginning May 1, 1982. (d) Determination of redemption values during any extended maturity period. (1) Guaranteed minimum investment yield and resulting values during an extended maturity period. 1 1 (2) Market-based variable investment yield and resulting values during and extended maturity period. (e) Market-based variable investment yields and tables of redemption values. [57 FR 14282, Apr. 17, 1992, as amended at 58 FR 60937, 60938, Nov. 18, 1993] § 342.4 Purchase—registration. (a) Purchase. (b) Registration. (1) They were limited to registration in the name of a natural person (whether adult or minor), alone, or with another natural person as coowner or beneficiary, and (2) They had to be identical in registration to the Series E bond purchased in combination therewith. § 342.5 Limitations. (a) Purchases Payroll savings plans. (2) Others. (b) Holdings. § 342.6 Taxation. (a) General. (b) Federal income tax on notes. (1) Defer reporting of the increase to the year of final maturity, actual redemption, or other disposition, whichever is earlier; or (2) Elect to report the increase for the year in which it accrues, in which case the election applies to all savings notes then owned and those subsequently acquired, as well as to any other similar obligations purchased on a discount basis. If the method in paragraph (b)(1) of this section is used, the taxpayer may change to the method in paragraph (b)(2) of this section without obtaining permission from the Internal Revenue Service. However, once the election to use the method in paragraph (b)(2) of this section is made, the taxpayer may not change the method of reporting without permission from the Internal Revenue Service. For further information on Federal income taxes, the Service Center Director or District Director, Internal Revenue Service, of the taxpayer's district should be contacted. § 342.7 Payment or redemption. (a) General. (b) Judgment creditors. [57 FR 14282, Apr. 17, 1992, as amended at 59 FR 10540, Mar. 4, 1994] § 342.8 Governing regulations. Savings notes are subject to the regulations of the Department of the Treasury, now or hereafter prescribed, governing United States Savings Bonds, contained in 31 CFR part 315, also published as Department of the Treasury Circular No. 530, current revision, except as otherwise specifically provided herein. § 342.9 Fiscal agents. (a) Federal Reserve Banks and Branches referred to below, as fiscal agents of the United States, are authorized to perform such services as may be requested of them by the Secretary of the Treasury, or his or her delegate, in connection with the issue, redemption and payment of savings notes. (b)(1) The following Federal Reserve Offices have been designated to provide savings bond services: Servicing office Reserve districts served Geographic area served Federal Reserve Bank, Buffalo Branch, P.O. Box 961, Buffalo, NY 14240 New York, Boston CT, MA, ME, NH, NJ (northern half), NY (City & State), RI, VT, Puerto Rico and Virgin Islands. Federal Reserve Bank, Pittsburgh Branch, P.O. Box 867, Pittsburgh, PA 15230 Cleveland, Philadelphia DE, KY (eastern half), NJ (southern half), OH, PA, WV (northern panhandle). Federal Reserve Bank of Richmond, P.O. Box 27622, Richmond, VA 23261 Richmond, Atlanta AL, DC, FL, LA (southern half), MD, MS (southern half), NC, SC, TN (eastern half), VA, WV (except northern panhandle). Federal Reserve Bank of Minneapolis, 250 Marquette Avenue, Minneapolis, MN 55480 Minneapolis, Chicago IA, IL (northern half), IN (northern half), MN, MT, ND, SD, WI. Federal Reserve Bank of Kansas City, 925 Grand Avenue, Kansas City, MO 64198 Dallas, San Francisco, Kansas City, St. Louis AK, AR, AZ, CA, CO, HI, ID, IL (southern half), IN (southern half), KS, KY (western half), LA (northern half), MO, MS (northern half), NE, NM, NV, OK, OR, TN (western half), TX, WA, WY, UT and GU. (2) Until March 1, 1996, other Federal Reserve Offices may continue to provide some savings bond services, but such services will be phased out over the period prior to that date. [59 FR 10540, Mar. 4, 1994] § 342.10 Reservations. (a) Issue of notes. (b) Terms.