Source: https://regulations.vlex.com/vid/notes-january-later-redemption-months-26861392
Timestamp: 2019-12-07 12:23:09
Document Index: 659443044

Matched Legal Cases: ['art 321', 'arts 321', 'art 321', 'art 321', 'art 321', 'art 351', 'ART 352', 'ART 353', 'art 351', 'art 359', 'ART 360', 'art 360']

Bonds and notes, U.S. Treasury: Series EE and I savings bonds issued January 2003 or later; redemption eligibility period extended from 6 to 12 months, - January 17, 2003 - Regulations - VLEX 26861392
Bonds and notes, U.S. Treasury: Series EE and I savings bonds issued January 2003 or later; redemption eligibility period extended from 6 to 12 months,
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[DOCID:fr17ja03-11]
[[Page 2665]]
31 CFR Part 321 et al.
United States Savings Bonds; Extension of Holding Period; Final Rule
[[Page 2666]]
31 CFR Parts 321, 351, 352, 353, 359, and 360
SUMMARY: The purpose of this final rule is to amend regulations offering and governing United States Savings Bonds to require that owners hold their bonds 12 months before they are eligible for redemption instead of 6 months. This change affects Series EE and I United States Savings Bonds issued January 2003 or later. This change is being made to discourage investing in savings bonds for short terms, and to better align the effective return on savings bonds with short- term marketable Treasury security yields.
EFFECTIVE DATE: Effective February 1, 2003.
ADDRESSES: You can download this final rule and correction at the following Internet address: http://www.publicdebt.treas.gov.
SUPPLEMENTARY INFORMATION: Currently, investors must hold their Series EE and I United States Savings Bonds for 6 months before they can be redeemed. This Final Rule increases the holding period for U.S. Savings Bonds from 6 months to 12 months. This change affects Series EE and I United States Savings Bonds issued January 2003 or later. When EE and I bonds were introduced and first offered in January 1980 and September 1998, respectively, offering and governing regulations prohibited owners from redeeming these bonds before they were 6 months old. While owners have always been able to cash their savings bonds prior to original maturity at the option of the owner or other person entitled to redemption, regulations have always prohibited redemption during an initial holding period to encourage retention and discourage the use of savings bonds as a short-term investment. The change will also address the anomaly that has resulted in yields for EE and I bonds redeemed six months after issue being greater than prevailing six-month Treasury security yields.
This final rule does not meet the criteria for a ``significant regulatory action'' as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply.
Banks, Banking, Bonds.
Bonds, Electronic funds transfers, Government securities.
The authority citation for part 321 continues to read as follows:
Section 321.8 is amended by redesignating paragraphs (a)(2) as paragraph (a)(3), revising paragraph (a)(1) and adding paragraph (a)(2) to read as follows:
Sec. 321.8 Redemption-exchange of Series E and EE savings bonds and savings notes.
(2) Series EE bonds bearing issue dates of February 1, 2003, or thereafter, presented no earlier than 12 months from their issue dates; and * * * * *
Revise Sec. 321.9(a) to read as follows:
Sec. 321.9 Specific limitations on payment authority.
(2) If it is a Series EE bond or a Series I bond issued on February 1, 2003, or thereafter, presented for payment prior to 12 months from its issue date. * * * * *
Appendix to Part 321 [Amended]
Amend the Appendix to part 321 section (8)(a), by revising the second sentence to read as follows: * * * * *
(a) General. * * * Securities eligible for exchange are: (1) Series EE bonds issued December 1, 2002, or earlier, presented no earlier than six months from their issue dates; (2) Series EE bonds issued February 1, 2003, or thereafter, presented no earlier than 12 months from their issue dates; and (3) Series E bonds and savings notes presented no later than one year from the month in which they reached final maturity. * * * * * * * *
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The authority citation for part 351 continues to read as follows:
Amend Sec. 351.2(d) by revising the first sentence and adding a new sentence after the first sentence to read as follows:
Sec. 351.2 Description of bonds.
PART 352--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES HH
Amend Sec. 352.7(a) by revising the last sentence and adding a new sentence to read as follows:
Sec. 352.7 Issues on exchange.
(a) * * * Series EE bonds issued on December 1, 2002, or earlier, become eligible for exchange six months after their issue dates. Series EE bonds issued on February 1, 2003, or thereafter, become eligible for exchange 12 months after their issue dates. * * * * *
PART 353--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES EE AND HH
Revise Sec. 353.35(b) to read as follows:
Sec. 353.35 Payment (redemption).
(b) A Series EE bond issued on December 1, 2002, or earlier, will be paid at any time after 6 months from its issue date. A Series EE bond issued on February 1, 2003, or thereafter, will be paid at any time after 12 months from its issue date. Bonds will be paid at the current redemption value shown in Department of the Treasury Circular, Public Debt Series No. 1-80 (31 CFR part 351). * * * * *
The authority citation for part 359 continues to read as follows:
Revise Sec. 359.6 to read as follows:
Sec. 359.6 When may I redeem my Series I bond?
PART 360--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES I
The authority citation for part 360 continues to read as follows:
Revise Sec. 360.35(b) to read as follows:
Sec. 360.35 Payment (redemption).
Dated: December 19, 2003. Donald V. Hammond, Fiscal Assistant Secretary.