The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
federal reserve bank of DALLAS, TE X A S D allas 75222 Circular No. 83-48 March 25, 1983 BOOKLET UNITED STATES TREASURY SECURITIES: BASIC INFORMATION TO ALL DEPOSITORY INSTITUTIONS IN THE ELEVENTH FEDERAL RESERVE DISTRICT: Enclosed is a copy of a new booklet, "United States Treasury Securities: Basic Information", which was published by the Federal Reserve Bank of Dallas. This booklet was designed to assist members of the public interested in investing in U.S. Treasury bills, notes, or bonds, and contains descriptive information, application and purchase procedures, and telephone numbers and addresses to c ontact for additional information. Single additional copies of the booklet or this circular will be furnished upon request to the Public Affairs Departm ent, Extension 6289. Sincerely yours, William H. Wallace First Vice President Enclosure B a n k s a n d o t h e r s ar e e n c o u r a g e d to use th e fo llo w in g in c o m in g W A T S n u m b e r s in c o n t a c t in g th is Bank: 1-800-442-7 140 ( in tr a s t a te ) a n d 1-8 00-527 -9 20 0 (in te r s ta te ). Fo r c a lls p l a c e d lo cally, p le a s e us e 651 p lu s th e e x t e n s io n refe rred to ab ove. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) UJNFITT] STATl TREA SECU BASIC INF< The information in this pamphlet is designed to assist the public interested in investing in United States Treasury bills, notes or bonds. DESCRIPTION ________ BILLS_________ _______ NO TES________ _______ BO NDS________ Treasury bills are always bookentry. Treasury notes may be either bookentry or definitive. Treasury bonds may be either bookentry or definitive. Book-entry bills are obtained through the Treasury, a Federal Reserve Bank, or a financial institution. These securities are handled by Reserve Banks but are ultimately transferred to the Treasury. Book-entry notes are obtained only through a financial institution. Book-entry bonds are obtained only through a financial institution. Definitive registered notes are obtained through the Treasury, a Federal Reserve Bank or a financial institution. Definitive registered bonds are obtained through the Treasury, a Federal Reserve Bank or a financial institution. Always discounted. The face value is paid at purchase. A check for the discount as set by the auction is sent immediately and the face value is returned at maturity. Usually discounted. The face value is paid at purchase. Periodic interest payments as set by the auction are paid semi-annually during the life of the note and the face value is returned at maturity. Usually discounted. The face value is paid at purchase. Periodic interest payments as set by the auction are paid semi-annually during the life of the bond and the face value is returned at maturity. 1 DENOM INATION BILLS $10,000 minimum, thereafter in multiples of $5,000. 2 NOTES BONDS $1,000, $5,000, $10,000, $100,000 and $1 million denominations. Mini mum varies with each issue. $1,000, $5,000, $10,000, $100,000 and $1 million denominations. Mini m um varies with each issue. BILLS 3 months (13 weeks). 6 months (26 weeks). 1 year (52 weeks). NOTES 2-10 years. Varies with each issue. MATURITY BONDS Over 10 years. Varies with each issue. 3 SOLD OR AUCTIONED ________ BILLS________ _______ N O T E S_______ _______ B O N D S ____ Every Monday, for 3-month and 6-month bills. If Monday is a holi day, then they are auctioned the previous Friday or the following Tuesday. One-year bills are usually auctioned every 4 weeks on a Thursday. Usually once a month or whenever the Treasury's needs arise. Quarter ly financing occurs in February, May, August and November. Several times a year, usually in February, May, August and November. Orders or tenders may be submitted until 12:30 PM Central Time on the day of the auction. Orders or tenders may be submitted until 12:30 PM Central Time on the day of the auction. Orders or tenders may be submitted until 12:30 PM Central Time on the day of the auction. 4 INTEREST ________ BILLS________ _______ N O T E S________ _______ B O N D S ________ The price and the discount rate are not known prior to the auction since they are determined by competitive bidding. The price and the coupon rate are not known prior to the auction since they are determined by competitive bidding. The price and the coupon rate are not known prior to the auction since they are determined by competitive bidding. Paid semi-annually. The method of payment depends on the type of security. Paid semi-annually. The method of payment depends on the type of security. Book-entry: Interest paid by the Federal Reserve Bank or financial institution holding the book-entry account. Book-entry: Interest paid by the Federal Reserve Bank or financial institution holding the book-entry account. Definitive: Semi-annual interest check is mailed automatically from the Treasury. Definitive: Semi-annual interest check is mailed automatically from the Treasury. Income considered earned each year. Income considered earned each year. Refund (discount) check will be mailed on the issue date, usually the Thursday following a Monday auction. If purchased directly through the Treasury, the Treasury will mail the check. If purchased through a Federal Reserve Bank, the Federal Reserve Bank will mail the check. If purchased through a financial institution or brokerage firm, the payment method will be determined by that institution. Income not considered earned until the bill has matured or unless it's sold prior to maturity. 5 TAXES BILLS NOTES BONDS Exempt from state and local. Exempt from state and local. Exempt from state and local. Must pay federal. Must pay federal. Must pay federal. 6 TENDER FORMS N EED ED FOR PURCHASE BILLS 3 months (13 weeks)—PD 4632-3. 6 months (26 weeks)—PD 4632-2. 1 year (52 weeks)—PD 4632-1. NOTES BONDS Forms provided for each new issue. Forms provided for each new issue. 7 LETTER AS APPLICATION FOR PURCHASE BILLS NOTES BONDS If a tender form is not obtained, a letter containing the following infor mation may be used as a purchase application. 1) Identify the type of security: 3-month, 6-month, 1-year. 2) Dollar amount. 3) Name(s)-please print. There is a two-name limit. 4) Social security number(s). 5) Address. 6) Telephone numbers: business and home. 7) Signature. 8) Include check. If a tender form is not obtained, a letter containing the following infor mation may be used as a purchase application. 1) Identify the series of the note being purchased. 2) Dollar amount. 3) Name(s)-please print. 4) Social security number(s). 5) Address. 6) Telephone numbers: business and home. 7) Signature. 8) Include check. If a tender form is not obtained, a letter containing the following infor mation may be used as a purchase application. 1) Identify the bond being purchased. 2) Dollar amount. 3) Name(s)-please print. 4) Social security number(s). 5) Address. 6) Telephone numbers: business and home. 7) Signature. 8) Include check. 8 PAYMENT ________ BILLS________ _______ N O TES________ _______ B O N D S ________ Full payment for the face value of the bill must accompany the tender if purchased through a Federal Reserve Bank. Full payment for the face value of the note plus accrued interest, if any, must accompany the tender if purchased through a Federal Reserve Bank. Full payment for the face value of the bond plus accrued interest, if any, must accompany the tender if purchased through a Federal Reserve Bank. Payment can be made in U.S. currency, matured Treasury securi ties, or by check. Checks issued by a commercial bank, savings and loan association, savings bank, or credit union are acceptable. Payment can be made in U.S. currency, matured Treasury securi ties, or by check. Checks issued by a commercial bank, savings and loan association, savings bank, or credit union are acceptable. Payment can be made in U.S. currency, matured Treasury securi ties, or by check. Checks issued by a commercial bank, savings and loan association, savings bank, or credit union are acceptable. Personal checks are n ot acceptable unless certified. A U. S. Treasury check which was issued in payment for a maturing security may be used. Personal checks are acceptable. A U.S. Treasury check which was issued in payment for a maturing security may be used. Personal checks are acceptable. A U.S. Treasury check which was issued in payment for a maturing security may be used. Checks must be made payable to the Federal Reserve Bank. They cannot be endorsed over to the Federal Reserve Bank. Checks must be made payable to the Federal Reserve Bank. They cannot be endorsed over to the Federal Reserve Bank. Checks must be made payable to the Federal Reserve Bank. They cannot be endorsed over to the Federal Reserve Bank. Checks must be drawn on an insti tution in the Eleventh Federal Reserve District. Checks must be drawn on an insti tution in the Eleventh Federal Reserve District. Checks must be drawn on an insti tution in the Eleventh Federal Reserve District. 9 FORMS OF OW NERSHIP OR RECORDATION BILLS NOTES BONDS Financial institutions can record the transaction through their book-entry account at a Federal Reserve Bank for their customer's accounts or their own account. Book-entry: Financial institutions can record the transaction through their book-entry account at a Federal Reserve Bank for their customer's accounts or their own account. Book-entry: Financial institutions can record the transaction through their book-entry account at a Federal Reserve Bank for their customer's accounts or their own account. Individuals can keep book-entry accounts with the Department of the Treasury by submitting an application to a Federal Reserve Bank. Definitive: Individuals and financial institutions can purchase registered securities at a Federal Reserve Bank. Definitive: Individuals and financial institutions can purchase registered securities at a Federal Reserve Bank. Acceptable recordations: Acceptable registrations: Acceptable registrations: One name: John A. Doe, social security number and address. One name: John A. Doe, social security number and address. One name: John A. Doe, social security number and address. (C ontinued on page 111 10 FORMS OF OW NERSHIP OR RECORDATION (Cont.) BILLS NOTES BONDS Two names: John A. Doe, social security number and address; or Mary B. Doe and social security number. Two names: John A. Doe, social security number and address; or Mary B. Doe and social security number. Two names: John A. Doe, social security number and address; or Mary B. Doe and social security number. Only one social security number is required, and that person will assume the responsibility for taxes. Only one social security number is required, and that person will assume the responsibility for taxes. Only one social security num ber is required, and that person will assume the responsibility for taxes. Other recordations such as trusts, partnerships, corporations, pension funds, etc. are acceptable. Other registrations such as trusts, partnerships, corporations, pension funds, etc. are acceptable. Other registrations such as trusts, partnerships, corporations, pension funds, etc. are acceptable. 11 SELLING BEFORE MATURITY ________ BILLS ________ _______ NO TES_____ _______ B O N D S ______ If purchased through a financial institution, contact financial institution regarding sale or transfer. All notes must be sold through a broker or a financial institution that handles securities. All bonds must be sold through a broker or a financial institution that handles securities. If purchased through the Federal Reserve Bank or Treasury Depart ment, the account must be trans ferred to an account maintained by a financial institution before sale can take place. 12 LOST OR STOLEN BILLS NOTES BONDS Ownership of book-entry securities cannot be lost even if the statement is lost or stolen. Notification of lost registered notes should be communicated directly to the Treasury Department. Interest checks will continue from the Treasury Department. Notification of lost registered bonds should be communicated directly to the Treasury Department. Interest checks will continue from the Treasury Department. 13 REINVESTMENT OR ROLLOVER ________ BILLS________ _______ NO TES_______ _______ B O N D S________ Arrangements for reinvestment or rollover of bills held in a Treasury book-entry account may be made on the tender form at the time of initial purchase. Maturing notes may be used to pur chase new securities. They must be submitted with a letter of intent or an appropriate application prior to the auction date of the security being purchased. Maturing bonds may be used to pur chase new securities. They must be submitted with a letter of intent or an appropriate application prior to the auction date of the security being purchased. If the Treasury is instructed to roll over the bills at the time of initial purchase, this instruction will apply only to the first rollover of these bills. Supplemental instructions to the Treasury are required for subsequent rollover requests. If reinvestment is not indicated at the time of purchase, the Treasury will supply a card (Form PD 4633-2) which should be returned 20 business days prior to maturity to reinvest. (C ontin ued on page 15) 14 REINVESTMENT OR ROLLOVER ________ BILLS_________ _______ NO TES________ (Cont.) _______ BONDS If reinvestment or redemption is indicated at the time of initial purchase and subsequently needs to be revoked, a notarized Form PD 4633 should be submitted to the Treasury. If no instructions are given, the bill will automatically be redeemed at maturity and a redemption check will be mailed from the Treasury by the maturity date. 15 REDEM PTION ________ BILLS________ _______ NO TES________ _______ B O N D S ________ Bills will automatically be redeemed by the Treasury at maturity and a check for the proceeds will be mailed unless reinvestment instructions are given at time of purchase or sent to the Treasury at least 20 business days prior to maturity. Maturing notes may be delivered in person or sent to the Federal Reserve Bank by registered insured mail 10 days before maturity. Maturing bonds may be delivered in person or sent to the Federal Reserve Bank by registered insured mail 10 days before maturity. All Treasury notes must be redeemed by a Federal Reserve Bank; however, they may be presented for payment through a financial institution. All Treasury bonds must be re deemed by a Federal Reserve Bank; however, they may be presented for payment through a financial institution. Registered securities presented one year or more after the maturity date require a certificate of ownership (Form PD 1071) certified by an authorized officer of a financial insti tution or notary public. Registered securities presented one year or more after the maturity date require a certificate of ownership (Form PD 1071) certified by an authorized officer of a financial insti tution or notary public. 16 RECORDED MESSAGES Information on current rates: (214) 651-6177 Dallas (214) 263-1093 Metro number (Dallas/Fort Worth area) 1 (800) 442-7390 Toll-free Intrastate WATS number (in Texas,but outside Dallas/Fort Worth area) 1 (800) 527-9208 Toll-free Interstate WATS number (outside of Texas) Current Treasury offerings of notes and bonds: (214) 651-6384 Dallas 17 TELEPHONE NUM BERS Forms (bills, notes, bonds) and related information: (214) 651-6362 Federal Reserve Bank of Dallas Problems with receiving statement of account, interest checks, etc.: (202) 287-4113 Department of the Treasury, Washington, D.C. New offerings of notes and bonds: (202) 287-4113 Department of the Treasury, Washington, D.C. Information regarding securities can be obtained from Federal Reserve branch offices by dialing the main numbers listed below and asking for the Marketable Issues Division. El Paso (915) 544-4730 (800) 351-1012 (Intrastate incoming WATS) (800) 392-1631 (Interstate incoming WATS) Houston (713) 659-4433 San Antonio (512) 224-2141 18 ADDRESSES BILLS NOTES BONDS Problems with receiving statement of accounts, etc.: Problems with receiving interest checks, etc.: Problems with receiving interest checks, etc.: Bureau of the Public Debt Department X Washington, D.C. 20226 Bureau of the Public Debt Department A Washington, D.C. 20226 Bureau of the Public Debt Registered Securities U.S. Treasury Dept. Washington, D.C. 20226 A letter of application or tender form to purchase securities should be sent to the appropriate address listed below. Dallas office: Tender for Securities Securities Department Federal Reserve Bank of Dallas Station K Dallas, Texas 75222 Houston Branch office: Tender for Securities Fiscal Agency Department Houston Branch Federal Reserve Bank of Dallas P.O. Box 2578 Houston, Texas 77252 (C ontin ued on page 20) 19 ADDRESSES 20 (Cont.) El Paso Branch office: Tender for Securities Cash/Fiscal Agency Department El Paso Branch Federal Reserve Bank of Dallas P.O. Box 100 El Paso, Texas 79999 San Antonio Branch office: Tender for Securities Cash/Fiscal Agency Department San Antonio Branch Federal Reserve Bank of Dallas P.O. Box 1471 San Antonio, Texas 78295 & - i* & i 4