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Wall Street has become enthusiastic about the industry, which consists of both S and Ls and savings banks. Prices of some S-and-L stocks have more than tripled in the past year. The big gainers include a pair of Beverly Hills thrifts: Great Western Financial Corp. (assets: $12.8 billion), whose shares have climbed 172% since May, and First Charter Financial Corp. (assets: $9.4 billion), up 233% during the same period...
Fighting to attract customers to these new accounts, S and Ls and banks are offering a bewildering array of double-digit interest rates, bonuses and prizes. The competition may threaten the survival of hundreds of small institutions that cannot afford to match the come-ons of their rivals. Says Robert Lackovic, executive vice president president of the San Francisco-based 1st Nationwide Savings: "It's going to be a real dogfight. The one thing regulation did was to produce a system in which the consumer knew he could walk in anywhere and get the same product. That...
...expected to yield at least 1% less on average than money-market accounts. One reason: federal regulations require that banks put aside 12% of their checking-account funds, including Super NOW money, as reserves that cannot be used to make loans. As a result, banks and S and Ls will earn less and thus pay less on Super NOW accounts than they will on money-market deposits...
...scramble began with the introduction of the money-market accounts on Dec. 14. Congress authorized these savings plans to help banks and S and Ls recover a part of the $231 billion that had been diverted to money-market funds operated by mutual-fund management companies and brokerage houses. The new money-market savings accounts offer high interest, allow unlimited withdrawals and even permit depositors to write up to three checks a month. Moreover, the deposits are federally insured, unlike the shares in a money-market mutual fund...
...entice customers, banks and S and Ls have offered introductory-and temporary-interest rates far higher than the 8¼% now being paid by the typical money-market fund. In the Atlanta area, the banks practically went berserk, guaranteeing rates of 20% or more for the first month. The First DeKalb Bank there, which dangled 25% interest and an E.T. doll, took in $7 million the first day, an amount that increased the bank's total deposits by 17%. Elsewhere, rates have been more realistic, generally ranging from 9% to 11%. But money has hardly been the only lure...