(5) Errors on stubs. If an error is on the stub only and the bond is correct, or if an inscription needs explaining (as when a feminine owner's given name is one generally accepted as masculine), an explanation shall be made on the stub. The postmaster or a designated supervisory official must initial the notation If the address or date is omitted from a stub, the postmaster must find out from the purchaser whether the bond is complete and, if the bond is complete, insert the missing data on the stub. If the bond is not complete, the address or date must be filled in on the bond and stub. The addition shall not be initialed.

(e) Undeliverable bonds. Bonds issued and mailed by other agents, which are undeliverable by mail, shall be handled in the following manner:

(1) Bond shall be forwarded to the addressee if change of address is on file. If no change of address is on file or if addressee is deceased, bonds shall be returned to issuing agent without further action.

(2) Bonds that cannot be delivered or returned to issuing agent and unclaimed bonds found loose in the mail shall be held for 60 days. After 60 days, they shall be sent to the Treasury Department, Division of Loans and Currency, 536 South Clark Street, Chicago 5, Ill.

(f) Examination of stock of bonds. Clerks who issue bonds shall check each bond and stub to see that the denomination and serial number agree. If the stubs are attached to the wrong bonds, they must be reassembled so that the two parts of each assembly agree. The postmaster shall hold bonds that cannot be reassembled, report the discrepancy to the regional controller, and await instructions.

(g) Certification for payment—(1) What to certify. Postmasters shall not cash savings bonds but will certify them for payment if sufficient identification is furnished and if the bonds are to be forwarded by the owner to a Federal Reserve bank or to the Treasurer of the United States for payment. The certification may be made on the bond itself or on a detached request for payment, Treasury Department Form TD 1522. Bonds that are to be presented to banks or trust companies for payment shall not be certified.

(2) How to certify. The certifying officer must require positive identification that the person presenting the bond

is the person whose name is inscribed on the bond and must be sure there is no alteration or erasure on the bond. If the registered owner signs by mark, his mark must be witnessed by at least one disinterested person besides the certifying officer. All certificates must be in the name and title of the postmaster, followed by the certifying officer's signature and official title. The specially designated clerk or carrier must sign as "designated clerk" or "designated carrier".

(3) Who may certify. The following persons may certify to requests for payment on bonds: postmaster; assistant postmaster; any postal inspector; supervisor; or clerk temporarily in charge of the office, branch, or station; or any clerk or carrier specially designated by the postmaster.

(h) Payroll savings plan—(1) Object. The plan permits employees of the Postal Service to authorize withholding of salary deductions for the purchase of savings bonds. The availability of the payroll savings plan shall be made known to all employees.

(2) Authorization. Treasury Department Form 2254, "Authorization for Purchase of United States Savings Bonds", shall be used by employees who wish to authorize deductions from pay each pay period. The form shall be completed in detail by the employee and forwarded by the Postmaster or other official to the regional controller. The minimum deduction is $3.75 each payday. Larger allotments in multiples of $1.25 may be made.

(3) Issuance of bond. The regional controller will issue bond and deliver to purchaser when deductions are sufficient to pay for it. If 5 or more deductions are necessary and the bond is of the $50 or higher denomination, the issue date will be shown as the month in which one-half of the purchase price was accumulated.

(4) Changes in authorization. Form 1476, "Notice of Change-Authorization for Purchase of U.S. Savings Bonds", shall be used by an employee to authorize any change desired in deductions or bonds. The completed form shall be forwarded by the postmaster or other official to the regional controller.

(5) Refund of deductions. The regional controller will refund withheld deductions insufficient to purchase a bond if the employee is separated from

The Postal Savings System was established to provide facilities for the deposit of savings at interest with the security of the United States Government for repayment. The Postmaster General selects and designates post offices that are to be postal savings depositories.

§ 173.2 Opening accounts.

(a) Who may open-(1) Individuals. Any person 10 years of age or over may open a postal savings account in his or her own name. Accounts are opened in the names of individuals only. No person is permitted by law to have more than one postal savings account at the same time in his own right. A married woman may open an account in her own name, and free from any control or interference by her husband. Joint accounts may not be opened nor may a beneficiary be named.

(2) Officials in charge of bankrupt funds. Officers and agents in charge of bankrupt funds may deposit them without limit in postal savings depositories in cases where local banks are unable or unwilling to give the required security.

(b) How to open an account-(1) In person or by representative. (i) To open an account, the applicant should apply in person at a depository post office. If,

because of infirmity or for other reason, an applicant is unable to appear in person, he may apply through a representative.

"

(ii) The depositor shall fill out Form PS 600, "Record of Postal Savings Account," using his complete name, as "John B. Jones" or "Mrs. Mary A. Jones,' or the depositor's representative shall take Form PS 600 to the depositor to fill out and return. The postal clerk shall check Form PS 600 for completeness and legibility, and have it signed in his presence if depositor applies in person. patron's copy is not satisfactory, the clerk must prepare a Form PS 600 in proper form. Accounts shall be numbered consecutively. The depositor or the representative shall be given Form PS 301, "Certificate Envelope," and at large offices, Form PS 301-A, "Depositor's Numerical Reference Card."

If

(2) By mail. (i) In a community where there is no postal savings depository, an application to open an account may be submitted by mail to a depository post office. The money to be deposited must accompany the application, preferably by money orders, but if in cash by registered mail. The depository postmaster will issue certificates in the amount requested and mail them to the applicant.

(ii) The applicant shall complete Form PS 300-B, "Application to Open an Account by Mail." If applicant appears at a nondepository office, the postmaster shall get Form PS 300-B from the most. convenient depository office. The postmaster shall certify to the identity of the applicant on the form and tell the applicant to send the completed form and the deposit, in multiples of $5, by money order or check to the depository office. Depository office shall open the account, write the name of the originating office in place of signature on Form PS 600, attach Form PS 300-B to Form PS 600, and issue and mail the certificates to the depositor. If Form PS 300-B is incorrectly filled out, the depository office will send it and the certificates to originating postmaster for correction by the depositor. The originating postmaster shall return Form PS 300-B to the depository office when corrected and then deliver the certificates to the depositor.

(3) By agent for bankrupt organization. Accounts may be opened in the name of a bankrupt corporation, association, or individual and certificates may be issued if the agent or officer gives

the post office a statement that local banks will not give the required security for bankruptcy funds.

(c) Identification data and signature. Information for identifying the holder when the certificates are presented for payment must be furnished. Fingerprints may be required. When the applicant usually signs his given name or names by initials, his full name must be written on the form and the application signed twice, first using the full name and then the initials or initial in the manner in which the account is to be maintained and certificates issued.

(d) Record of accounts-(1) Form. When an account is opened, a card record is established, a number assigned the account, and the record maintained as the official record of the account at the office where opened.

(2) Name. The applicant's name is entered on the account card in the manner in which the account is to be maintained and certificates issued.

(3) Change in name. A woman who marries after opening an account, or a depositor whose name is changed by court order, should so inform the postmaster and present all outstanding postal savings certificates to him. The depositor will be required to sign the new name on the record of the account, and the postmaster will annotate the certificates to show the new name. Until the depositor presents his or her certificates for proper notation, the postmaster, if aware of the change of name by marriage or by court order, will receive no further deposits for the account nor make any partial or interest payments but will make full payment to close the account if satisfied as to the depositor's identity.

(4) Entries. The amount of each deposit, the amount of each withdrawal and the balance on deposit are entered on the record.

payment in accordance with such determination operates as a full and complete discharge of the United States from any further claim. An authenticated copy of the court determination must be submitted to the post office.

(c) Privacy of accounts. Postmasters and postal employees shall not disclose the name of any postal savings depositor nor give any information concerning a particular account to any person other than the depositor himself without specific authority, except that the balance on deposit may be given in the following circumstances:

(1) When a depositor is deceased or has been adjudged mentally incompetent, the information may be furnished to the duly appointed legal representative or next of kin.

(2) On the request of any State or county supervisor of old-age or unemployment assistance established pursuant to the Social Security Act of August 14, 1935, as amended, if the supervisor states he believes the applicant may have a postal savings account.

(3) When an applicant for relief has given written permission to representatives of relief agencies not connected with the Social Security Act of August 14, 1935, as amended, if the relief supervisor states he believes the applicant may have a postal savings account.

(4) On request of an Internal Revenue agent investigating a tax deficiency, if the agent has reason to believe the person may have a postal savings account. § 173.4 Deposits.

(a) Amount―(1) Individual deposits. Deposits must be made in multiples of $5.

(2) Maximum balance. The maximum balance permitted, exclusive of accrued interest, is $2,500, except for deposits of bankruptcy funds, where there is no limit.

(b) Interest-(1) Rate. Interest is payable at 2 percent per year.

(2) Start. Deposits begin to earn interest on the first day of the month following the date of deposit.

(3) Compound interest. Interest is compounded annually on whole dollar amounts on certificates issued on or after September 1, 1954.

(4) Simple interest. Certificates surrendered between annual periods, or for periods of less than 1 year, earn simple interest computed quarterly. Deposits made before September 1, 1954, earn

simple interest until the certificates are surrendered or exchanged.

(5) Collection. The interest that accrues during any quarter is payable on or after the first day of the next quarter and may be collected by surrendering the certificate at the office of issue. However, the interest date for the certificate evidencing the redeposit will be the first day of the following month.

(6) Taxation. Interest credited to postal savings accounts on moneys deposited on and after March 1, 1941, is not exempt from Federal income taxes, but interest credited to postal savings accounts on moneys deposited prior to March 1, 1941, is wholly exempt from Federal income tax.

(c) Acceptance of funds. Funds shall be accepted the same as for money orders. (See § 171.1(b) (3) of this chapter.) A temporary stop payment notice shall be put on depositor's account card if a check is accepted. The depositor must return the certificates if the check fails to clear. Uncanceled savings stamps or old series postal savings stamps may be accepted. Funds shall be treated as postal funds.

(d) Issuance of certificates—(1) As evidence of deposits. Nontransferable and nonnegotiable certificates of deposit, in fixed denominations of $5, $10, $20, $50, $100, $200, $500, $1,000, and $2,500, are issued as evidence of deposits. Certificates are delivered to depositors when issued, and postmasters are not authorized to accept them after issue for safekeeping. The postal clerk shall:

(i) Verify account of individual kept on Form PS 600. Then enter depositor's name and account number on the certificate, and stamp the certificates with special postal savings stamp.

(ii) Issue certificates in consecutive numbers.

(iii) Record account number and date of issue on certificate book cover, and initial.

(2) Errors on certificates. If an error is found in a certificate after delivery to the depositor, the certificate should be returned to the issuing postmaster. The postmaster shall proceed as follows to correct errors on certificates:

(i) Discovered during accounting period of issue. Stamp certificates spoiled and write spoiled on cover page of certificate book opposite its serial number. Write the serial number of spoiled certificates on the daily Form 713 or Form 708, "Postal Savings Certificate Trans

actions Daily Summary" and on accounting period Form 704, or 714, "Postal Savings Certificate Transactions." Correct records if necessary. Send spoiled certificates with Forms 704 or 714 to the regional controller at the end of each accounting period.

(ii) Discovered after accounting period of issue. Make a receipt in duplicate, Form PS 305, "Depositor's Receipt for Certificates Surrendered Without Payment." (The supply of this form must be kept by the postmaster or a designated employee and delivered to the window in quantities estimated as a week's supply. Before being turned over to the window, the forms must be numbered in duplicate.) Give the original to the depositor, and file the copy with the depositor's card. Send the certificate and explanation of error to the regional controller. The regional controller will issue a new certificate with original serial number or correct the certificate and return it. Exchange the new or corrected certificate for the receipt held by the depositor. Correct the entries on the depositor's account, Form PS 600, if necessary. Match the receipt Form PS 305 returned by the depositor with the copy held with the depositor's card. Staple the two copies together, and hold both Forms PS 305 until audit by the station examiner of postal inspector.

(a) On demand at office of issue. All or any part of funds deposited at the office of issue may be withdrawn on demand. Immediate payment will be made, unless the amount is large and the postmaster has to obtain the necessary funds. If a withdrawal is made within 1 month from the date of issue as shown on the certificate, a service charge of 20 cents will be made for each certificate regardless of denomination.

(b) In person. The certificates will be paid at the office of issue if the postmaster is satisfied as to the identity of the holder. The postmaster must

(1) Identify the depositor with the information shown on his account Form PS 600. Compare fingerprints if equipment is available.

(2) Compute interest and enter the (Use amount due on certificate. monthly interest tables, Schedule 100-B for 1939 or earlier series, and Schedule 100-C for 1954 series.)

(3) Have the depositor sign the certificates in the postmaster's presence.

(4) If the certificate is less than 1 month old, collect a 20-cent service charge and stick a 20-cent postage stamp near the right border, just above the word "thereon".

(5) Pay from postal funds, or use Treasury (symbol 0001) check where authorized.

(6) If any payment is questioned, give the depositor a receipt on Form PS 305 for the certificates, and send the account, certificates, and a statement to the regional controller.

(c) Through a representative—(1) Designated on Form 304 When personal appearance is not possible, the holder of the account may designate a representative to make a withdrawal. When it has been shown to the postmaster's satisfaction that the holder cannot appear in person, the postmaster will give the representative Form 304, "Authorization to Pay Postal Savings Through a Depositor's Representative", for the depositor to fill out and sign. When the executed order and endorsed certificates are presented to the postmaster, he shall compare signature and other identification data on Form 304 with that on the Form PS 600; satisfy himself as to the identity of the applicant and of the representative and that the depositor wishes to withdraw funds; and complete transaction as stated in paragraph (b) of this section.

(2) Powers of attorney. Powers of attorney will be accepted only when executed by members of the Armed Forces of the United States serving abroad and must be accompanied with a statement from the attorney-in-fact that the depositor is still living and is stationed outside the United States. The papers will be submitted by the postmaster to the Department for approval and no payment will be made until he has received approval.

(d) By mail. Withdrawals may be made by mail, using Form 315, "Depositor's Application to Withdraw Postal Savings by Mail", which will be furnished by the postmaster. A postmaster must witness the signing of the Form 315. The depositor must mail Form 315 and the signed certificates to the office where his account is held (depository office). If the postmaster at the depository office is satisfied as to the applicant's identity, he will follow directions and instructions on Form 315, pay by

check or money order, and send payment by registered mail, if requested, to the depositor-deducting any money order or registry fees. The depository office will file Form 315 with the depositor's account card, Form PS 600.

(e) Withdrawal of bankruptcy funds. Certificates must be endorsed by the depositing officer or agent (or his successor, whose appointment must be evidenced by a court order) and, in addition, may be countersigned by another individual in his representative court capacity if it is the requirement of the referee having jurisdiction over the funds in question.

(f) By nonresident aliens (1) Definition. A nonresident alien is a depositor who sends an application for withdrawal from a location outside of the continental United States, or its possessions or military establishments. Withdrawal may be made by mail or through a representative. See paragraphs (c) and (d) of this section.

(2) Interest on deposits. The interest on deposits made after March 1, 1941, is subject to withholding tax if the postmaster does not have information that the depositor is a citizen of the United States.

(3) Method of payment. Instructions on Form 304 or 315 shall be followed. A Treasury check, drawn to the order of the Board of Trustees, Postal Savings System, for the full amount of principal and interest due, shall be sent to the Bureau of Finance (Postal Savings), together with a completed Form PS 320, "Letter Transmitting Postal Savings Payments by Mail," name and address of depositor and of representative, if any, and any new certificates. If no checking credit has been granted, the regional distributing postmaster should be asked to draw a check in favor of the Board of Trustees, Postal Savings System, and to send it to the Bureau of Finance (Postal Funds Division). The Bureau of Finance will deduct the tax and mail the payment to the depositor or representative.

(g) By levy for deficiency in federal income tax. (1) A postmaster served with notice of levy by Internal Revenue agent shall

(1) Put stop payment on account and notify depositor in writing of the levy served and request surrender of all or sufficient number of certificates to satisfy tax deficiency. Have depositor endorse certificates. Pay Internal Reve