Super-NOW

Super-NOW The savings-checking account

Just as bankers were gearing up last week to launch the new money-market accounts that pay high interest, federal regulators authorized financial institutions to offer yet another option beginning Jan. 5 that will almost totally blur the distinction between savings and checking deposits. The account will require a minimum balance of $2,500, but it will have no interest ceiling, and depositors will be able to write an unlimited number of checks. Similar to so-called NOW checking accounts that currently have an interest lid of 5 1/4%, this latest innovation has already been dubbed the Super-NOW.

Bankers and savings and loan officers are both excited and apprehensive about the Super-NOW. They hope this new weapon in their arsenal will help them recover a large part of the $230 billion in deposits that has been captured by money-market mutual funds. But the banks and S and Ls will also be in the unsettling position of competing fiercely with each other as well as with the money funds. Many a bank official will be working overtime during the Christmas season trying to figure out how much interest to pay on the Super-NOW. Says a concerned Walter Wriston, chairman of New York's Citibank: "The critical question is how banks will price their services. Will we go the airline route, charging $99 and giving a steak dinner to fly across the country?" Savers will soon find out.

This file is automatically generated by a robot program, so viewer discretion is required.