[Federal Register Volume 73, Number 214 (Tuesday, November 4, 2008)]
[Rules and Regulations]
[Pages 65543-65544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26173]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 359


Offering of United States Savings Bonds, Series I

AGENCY: Bureau of the Public Debt, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: A Series I savings bond accrues interest based on both a fixed 
rate of return and a semiannual inflation rate. A single, annual 
interest rate called the composite rate reflects the combined effects 
of the fixed rate and the semiannual inflation rate. This amendment 
clarifies that the fixed rate of return and the composite rate will 
always be greater than or equal to 0%. This amendment is for 
clarification purposes only and makes no substantive change to the 
existing regulations.

DATES: Effective: November 4, 2008.

ADDRESSES: You can download this final rule at the following Internet 
addresses: http://www.publicdebt.treas.gov or http://www.gpoaccess.gov/ecfr.

FOR FURTHER INFORMATION CONTACT: Karthik Ramanathan, Director, Office 
of Debt Management, Domestic Finance, Departmental Offices, Department 
of the Treasury, at (202) 622-2042 or [email protected].
    Elisha Whipkey, Director, Division of Program Administration, 
Office of Retail Securities, Bureau of the Public Debt, at (304) 480-
6319 or [email protected].
    Dean Adams, Attorney-Adviser, Edward Gronseth, Deputy Chief 
Counsel, Office of the Chief Counsel, Bureau of the Public Debt, at 
(304) 480-8692 or [email protected].

SUPPLEMENTARY INFORMATION: A Series I savings bond accrues interest 
based on both a fixed rate of return and a semiannual inflation rate. 
The Secretary of the Treasury determines the fixed rate of return. The 
fixed rate is established for the life of the bond. This amendment 
clarifies that the fixed rate of return will always be greater than or 
equal to 0%. The Department of the Treasury issues these regulations 
pursuant to the authority contained in 5 U.S.C. 301 and 31 U.S.C. 3105.
    The composite rate is a single, annual interest rate that reflects 
the combined effects of the fixed rate and the semiannual inflation 
rate. The composite rate could possibly be less than the fixed rate in 
deflationary situations. This amendment clarifies that the composite 
rate will always be greater than or equal to 0%.
    This amendment makes no substantive change to the regulations but 
will benefit investors by clarifying that neither the fixed rate of 
return nor the composite rate will be negative under any market 
conditions.

Procedural Requirements:

    This final rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, a 
regulatory assessment is not required.
    Because this final rule relates to matters of public contract and 
procedures for United States securities, notice and public procedure 
and delayed effective date requirements are inapplicable, pursuant to 5 
U.S.C. 553(a)(2).
    As no notice of proposed rulemaking is required, the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) does not apply.
    We ask for no new collections of information in this final rule. 
Therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does not apply.

List of Subjects in 31 CFR Part 359

    Bonds, Federal Reserve system, Government securities, Securities.

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Accordingly, for the reasons set out in the preamble, 31 CFR Chapter 
II, Subchapter B, is amended as follows:

PART 359--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES I

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1. The authority citation for part 359 continues to read as follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105.

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2. Revise Sec.  359.10 to read as follows:


Sec.  359.10  What is the fixed rate of return?

    The Secretary, or the Secretary's designee, determines the fixed 
rate of return. The fixed rate is established for the life of the bond. 
The fixed rate will always be greater than or equal to

[[Page 65544]]

0.00%.\1\ The most recently announced fixed rate is only for bonds 
purchased during the six months following the announcement, or for any 
other period of time announced by the Secretary.
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    \1\ However, the fixed rate is not a guaranteed minimum rate. 
The composite rate is composed of both the fixed rate and a 
semiannual inflation rate, which could possibly be less than the 
fixed rate or negative in deflationary situations. In all cases, 
however, the composite rate will always be greater than or equal to 
0.00%.

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3. Revise Sec.  359.13 to read as follows:


Sec.  359.13  What are composite rates?

    Composite rates are single, annual interest rates that reflect the 
combined effects of the fixed rate and the semiannual inflation rate. 
The composite rate will always be greater than or equal to 0.00%.

    Dated: October 28, 2008.
Kenneth E. Carfine,
Fiscal Assistant Secretary.
 [FR Doc. E8-26173 Filed 10-29-08; 4:15 pm]
BILLING CODE 4810-39-P