The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F E D E R A L RESER VE BAN K O F N E W Y OR K Fiscal Agent of the United States f Circular No. 6 5 9 9 1 L September 1, 1970 J Treasury Announces x/2 Percent Bonus on Savings Bonds Effective June 1, 1970 To Issu in g and P a yin g A g e n ts fo r U n ited S ta te s S avin gs B onds in the Second F ederal R eserve D is tr ic t: Following is the text of a statement issued August 25 by the Treasury Department: S e c re ta ry of th e T re a su ry D a v id M. K ennedy, a c tin g to im plem ent a law signed la st n ig h t by P re sid e n t N ixon, an n o u n ced t h a t a y2 p e rc e n t bonus w ill be ad d ed to the in te re st ra te p a id to lo nger-term holders of U n ite d S ta te s S av in g s B onds. T his bonus w ill raise th e effective in te re st ra te on new B onds, w hen held to m a tu rity , fro m 5 to 5 y2 percen t. T he increase, w hich is re tro a c tiv e to J u n e 1, 1970, w ill also re su lt in im proved yields on o u tsta n d in g S eries E a n d S eries H Bonds. The m illions of A m erican s who own S avings B onds— in clu d in g those 10 m illion persons who p u rchase th em re g u la rly th ro u g h p a y ro ll savings p la n s— w ill now have an e x tra incentive to hold on to them . F o r those who have n o t y e t p u rc h a se d S avings Bonds, th e increase provides the ad d ed a ttra c tio n of a bonus on th e ir savings, sav in g s th a t m ake an im p o rta n t c o n trib u tio n to the sound financing o f o u r n a tio n ’s govern m ent, S e c re ta ry K en n ed y said. T he S e c re ta ry n o ted th a t th e bonus provides a m eans of increasin g th e r e tu r n to lo n g er-term savers a t a tim e of g en erally h ig h in te re s t rates. W hile th e T re a su ry w ill re ta in flexibility to m odify the bonus on fu tu r e sales a n d extentions, S e c re ta ry K en n ed y em phasized th a t all B onds now held or new ly p u rch ase d are assu red of receiving th e fu ll y2 p e rc e n t bonus th ro u g h th e ir n e x t m a tu rity . Printed below is an explanation by the Treasury Department of the application of the bonus to both new and outstanding issues of Series E and Series H Bonds. Additional copies of this circular will be furnished upon request. A lfr ed H ayes, President. United States Savings Bonds Improvements in Yield Retroactive to June 1, 1970 Series E Series H 1. S eries E B onds p u rc h a se d on o r a f te r J u n e 1, 1970 w hen h eld to m a tu r ity w ill receive a n e x tra y2 p ercen t, p ay ab le a t m a tu rity , ra isin g th e y ie ld to 5 y2 p e rc e n t fro m d ate o f issue to d a te of m a tu rity . 1. Series H B onds p u rch a sed on or a f te r J u n e 1, 1970 w ill yield a p p ro x im ate ly 5.12 p e rce n t fo r th e first 5 y e a rs a n d 6 p erc en t fo r the rem a in in g 5 y ears to m a tu rity , p ro v id in g an over-all yield o f 5 y2 p e rce n t from d ate of issue to d ate of m a tu rity . 2. O u tsta n d in g E B onds th a t have n o t reach ed th e ir first m a tu r ity w ill receive a y2 p e rc e n t in crease in yield fo r sem ian n u al in te re s t p erio d s b eg in n in g on or a f te r J u n e 1, 1970, p ay ab le as a bonus a t m a tu rity . 2. O u tsta n d in g I I B onds th a t have been held fo r less th a n 5 y ears w ill receive a y2 p e rc e n t increase in y ield fo r sem iannual in te re st periods b eg inning on or a f te r J u n e 1, 1970, p a y ab le as a bonus in th e form of increased sem ian n u al in te re st pay m en ts d u rin g th e second 5 y e a rs to m a tu rity . 3. O u tsta n d in g E B onds th a t have reach ed first m a tu rity , or a re ex ten d ed beyond first m a tu r ity w hile th e bonus is in effect, w ill have th e % p e rc e n t c red ited a t th e end o f each sem ian n u al in te re s t p erio d b egin n in g on o r a f te r J u n e 1, 1970, th ro u g h th e ir n e x t m a tu rity . The bonus is p ay ab le w henever th e bonds are redeem ed. 3. H B onds th a t have been held 5 years, o r are ex ten d ed while the bonus is in effect, w ill receive a y2 p e rc en t increase in yield fo r sem iannual in te re st p e ri ods b e g in n in g on or a fte r J u n e 1, 1970. The bonus w ill be added to sem iannual in te re st checks th ro u g h n ex t m a tu rity .
@FedFRASER