Word: ls
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...pans last month received a new and different kind of bonus: high interest rates. Banks and savings and loan associations across the U.S. unleashed massive advertising campaigns to induce customers to sign up early for the new All Savers Certificates. The A.s.C.s were devised to help ailing S and Ls attract business by offering higher interest rates than those given on passbook accounts and a partial tax exemption on yields. Banks and S and Ls have been promising depositors annual interest rates of 20%, 30% and even 50% until Oct. 1, when the All Savers accounts officially start...
...Internal Revenue Service ruled last week that the big cash bonuses in most cases nullified the tax-free status of the savings certificates. Moneymen were outraged by the ruling, while consumers were left more bewildered than ever by the jabberwocky of interest rates given by banks and S and Ls. In recent weeks financial institutions have paid between 5.25% and 50% annual interest on various deposits...
...origin of last week's IRS action was a congressional measure earlier this year designed to make it easier for the S and Ls to get deposits that could be used for mortgages. During the first seven months of 1981, S and Ls and savings banks lost upwards of $25 billion in funds. Some lending institutions have now virtually stopped making mortgage loans because they no longer have money available. Much of the missing investment is going into money-market funds, which gained $75.7 billion in the past eight months...
...bailout plan for S and Ls...
...savers certificate would allow savings banks and S and Ls (in one version, commercial banks as well) to pay an interest rate equal to 70% of the going twelve-month Treasury bill rate. The certificates would become available for one year beginning Oct. 1, after which Congress would decide whether or not to renew the program. By some estimates, sales of certificates could reach $200 billion...