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Hrrald & L-inlem 22 lunc '83

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First Savings Still High 1st National, Guarantee Money Market Rates Dip

By JOK ZEI.NIK Two financial institutions with Cape May County of fices arc paying lower in terest rates on insured money market accounts because they changed their method of setting those rates First National State Bank of South Jersey wWit from its orgiinal method of adding 3/8 of I percent ( 37&) to the weekly 91 day Treasury Bill rate, to an in ternal. management decision Thus, First National was paying 8 percent last week Under the former

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method, it would have paid 9 I percent (the T-bill was at 8.73 last week > Guarantee Bank went from its original commitment of paying a rate "equal to or more than the T bill" to a rate set by its investment committee It last week paid 8.35, compared to at least 8 73 under the former method First Savings & I^oan Assn of Sea Isle City continues to pay the county's highest rate on the money market accounts: 9.23 per cent last week based on the T-bill plus 5 First Savings officials said they were "having a ball" by being able to con tmue offering higher rates than their competitors, a fact they credit to construe tion and property sales in Sea Isle City which the bank is financing with 13 percent (plus two points) mortgages Some bank officials conceded that savings and loans, more active in home mortgages, were better able to offer higher savings rates, but one warned "the spreads aren't there anymore; the banks had better be careful or they'll wind up getting hurt " Some also cited lack of industrial growth and a soft housing market for a lack of money making loans in South Jersey William Carlos. Guarentce's marketing director, pointed out that its money market interest rate is "above the national average" and said the bank also has reduced interest rates to borrowers He said Guarantee had 13 percent. 30-year mortgage money and had dropped the interest rale on auto and home equity loans from 13 to 12 percent. Neither First National nor Guarantee went out of its way to inform customers that it had adjusted its interestcalculating system in a way likely to reduce rates First National acted June 1. but repeated calls

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to its marketing department failed to reach anyone wh6 would comment on what it was doing to inform custom^s. Guarantee, whior^changed its system JunjL 14. on June 18 mailed customers an "update on our full range of investment instruments and how the rates are set." according to Carlos, but the pamphlet did not specifically state that the system for setting money market interest rates had been changed First National Vice President William Townsend said it had "moved our rates more in line with the regular money markets. It is not pegged to anything, except as we perceive market conditions." A Guarantee Bank internal memo said that there was "a slight change in the way our rates are established They will continue to be competitive, but not tied to the T-bill ” These new accounts started in mid-December and are largely responsible for a consistent drain from money market mutual funds But the decline has been getting smaller as the difference between the private, non-insured accounts and the banking in dusthes’ insured accounts narrowed Last week, for example, funds in the general pur pose money market ac counts actually increased by $6 4 million It was a $404 million drop in institutional funds that cut the private funds' totals According to Donoghue's Money Fund Repprt. the private money market average yield increased to 7 85 percent. The interest range of Cape May County financial institutions was 7.85 to 9 23 Treasury bill rates have been rising slowly and the financial institutions that tie their rates to the T-bill have been forced to pay higher rates accordingly Eight in the county were linked to the T-bill. The First National and Guarantee changes reduced that to six Most of the others set their rates by management decision with an eye on the competition. The financial institutions can change the rates on these insured money market accounts as often as they wish and pay whatever they like. Most change their rates weekly, on Tuesdays The rates are available in most cases by visiting or calling the bank Many of the monthly statertrents issued on the money market accounts do not explain what interest rate was paid. In addition to the money market accounts, which permit a maximum of six transactions, three of them checks, there are so-called "Super Now" accounts with unlimited checking, but lower interest rates Guarantee Bank has no specific Super Now. but its computer will "sweep" checking accounts daily and put anything above a designated amount into its higher-paying insured money market account

Following list of the 15 financial institutions with county offices, in alphabetical order, gives the insured money market account interest rate followed by the Super Now interest rate: Anchor Savings & Loan, 8.73, 7.73. Cape May County Savings & Loan. 8.55, 6.5. Citizens United Bank, 8. 6.5. Collective Federal Savings & Loan, 8.5, 8. Crest Savings & Loan, 8 73. 7.73. First Jersey National Bank, South. 8.10, 6.67. First National State Bank of South Jersey. 8, 7. First Savings & Loan, 9.23, 8.23. Guarantee Bank. 8.35, no Super Now. Heritage Bank. 8. 6.8. Marine National Bank, 7.85, 6.5. Ocean City Home Savings & Loan, 9.105, 7.73. Security Savings & Loan, 8.15. 7 Sturdy Savings & Loan, 8.98, no Super Now Union Trust Co. of Wildwood. 8 35. 6.5.

Heart Assn. Honors DJ WILDWOOD - Mike Walczak. WCMC DJ. has been named 1983 Volunteer of the Year for the South Jersey Shore Council of the American Heart Assocation Southern New Jersey Chapter. The award was presented at the chapter's annual dinner meeting recently. WALCZAK WAS coor dinator of WCMC's "Operation Heartbeat" radiothon last February which raised funds to support the Heart Association’s programs in South Jersey. A Philadelphia native and Wildwood resident. Walczak has been wjth the station for two yeai^s and has been public affairs director since December, 1982 Meaney Earns Mutual Award GREEN CREEK - E James Meaney. 144 Paula La., local representative of Mutual of Omaha's life in surance affiliate United of Omaha, was recently awarded a Certificate of Proficiency for successful completion of an intensive course of military life insurance underwriting

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