Appeal No. 2005-2642
Reexamination Control No. 90/005,841
(2) Withdrawals were not permitted during the first year;
(3) The fixed interest paid on the account balance was 1 to 1½ percentage
points below that paid for normal deposits; and
(4) They did not share the tax exemption enjoyed by ordinary savings accounts.
Mukherjee at 51, 2d full para.
Furthermore, the indexing feature operated in a stepped, discontinuous manner
rather than a continuous manner:
Once the cost-of-living index (October 1951 = 100) had risen 2 points
above 104, the capital was increased by as many as 2 full per cents as the
index had risen between deposit and withdrawal. The figures used were
the averages (to the nearest whole number) of the index values for the
three months before deposit and withdrawal respectively. The system did
not work the other way; no reduction would take place if the index fell.
Id. at 51, 3d full para. In January 1957, a choice of two kinds of index-linked accounts
became available to the public: in addition to the above taxable accounts, thereafter
called ‘A’ accounts, ‘B’ accounts were offered which were tax-free (like normal,
nonindexed deposit accounts) but gave only 50 per cent index compensation. Id. at 52,
2d full para. The interest rates for the two types of accounts were as follows:
`A’ and ‘B’ accounts at first carried the same basic rate of interest of
4¾ per cent. In January 1957, when ‘B’ accounts started, the index
clause for ‘A’ accounts was made more sensitive. Compensation was
now to be paid for full 1 per cent changes in the cost-of-living index,
instead of full 2 per cents. ‘B’ accounts received exactly half the index-
related compensation rate paid on ‘A’ accounts.
Id. at 54, 4th full para. We agree with the examiner that the phrase “basic rate of
interest” in the foregoing passage refers to a fixed rate of interest. Final Action at 4, ll.
1-3. Appellant does not contend otherwise.
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