business

A Money Market Grabber Midlantic's Off er Analyzed

By JOSKPII It. ZKI.MK Shades of early 1983! Those were Ihe days, you'll remember, when financing institutions were offering 10. 12. even 20 per cent interest rates for brief periods to attract in vesments to the new money market savings accounts That era passed fairly quickly, after drawing billions of dollars out of the private money market funds.

But interest rates have been falling and those new money market accounts — limited to six transactions, j three deposits and three checks, a month — are all clustered around 7 percent. \ trailing the money market fund rate which averaged 7.12 percent last week SO ALONG COM KS Midlantic, with six offices ; in Cape May County, plus two Heritage Bank offices, offering 10.5 percent for 30 days to "hungry savers."

Why'' "To attract new money." explained Ed Benham. vice president. Customer Relations. for Midlantic National Bank/Union Trust in Wildwood. "It's an attention grabber." added Keith Pilkington, vice president. Marketing, for Midlantic in Edison. "From a strategic standpoint, we believe the money market investor account is a very important source of core deposits for Midlantic Many people out there still have money in monev market funds." IIOW'S TIIE BOM'S of fer doing'' "Better than expected" as far as Midlantic/Union Trust, said Benham. "Very well. It's tracking with our projections." said Pilkington. referring to the statewide organization which has assets of more than $9.5 billion. There's not much doubt thousands of county residents with millions sitting in money market accounts are less than thrilled with interest rates ranging from 6.32 to 7 percent (see chart at the end of this column!. People who rely on investments as a key source of income are hur ting with an account that is only 1.5 percent better than the old standby passbook savings account, which is paying either 5.25 or 5.5 percent . TIIE MIDLANTIC "bonus rate" should appeal to those investors. But it should be kept in mind that the 10.5 percent applies for 30 days, and then reverts to Midlantic's normal money market rate. Its advertising calls that regular rate "one of the highest money market rates among New Jersey banks " In fact, this week it is paying 6 6 percent, tied with two other banks for 12th lowest of the 15 financial institutions in the county Seven are paying 7 per cent, and the highest rate. 7 I percent, is paid by Collective Federal's money market passbook That rate, as with the money market investment accounts. drops to 5.5 percent if your balance drops under $1,000 MIIH.ANTIC A LSD points out that it will begin paying that 10.5 percent

rate only after the checks you deposit have cleared. Its advertising says that is "generally one to four banking days." But for Midlantic/Union Trust, it takes five days. One can beat those five days without interest by depositing cash, of course With those factors in mind, the Midlantic bonus rate still means more money for that one-month period. If one moved $10,000 from a 7 percent account to Midlantic's 10.5 percent, for example, and if that rate applied for 25 days, the net gain would be just under $25. One banker (not Midlantic. of course) raised his eyebrows at the thought people would go to the trouble of closing and opening accounts to make $25. But his wife probably clips 25-cents-off coupons in the grocery ads. Certainly many county residents do. HERE'S A RUNDOWN of the county's 15 financial institutions, in alphabetical order, and last week's money market interest rate and Super Now interest rate, an account that permits unlimited checking but usually pays a lower rate: Anchor Svings & l^oan, 7. 5.75. Cape May County Savings & Loan. 7. 6.5. Collective Federal Savings & Ix>an. 7. 6.3. Crest Savings & Loan. 7. 6. First Fidelity Bank/South. 6.6. no Super Now. First Jersey National Bank/South. GMMA. 6.7: GIA. 6.55 First National Bank of Toms River. 6.79. 6.04. First Savings & Loan. 7. 6 Heritage Bank. 6.6. 5.3. Marine National Bank. 6 5. 5.75. Midlontic/Union Trust. 6 6. 5.3 New Jersey National Bank. 6 32. 6.32 Ocean City Home Savings & Loan. 7. 5.8 Security Savings & lawn. 6 7. 6.5. Sturdy Savings & Loan. 7. no Super Now -,-t. II..-.II. .I l.. l|. .11 • •■ItllllC I" III! Xtlll'l li .til f !•-.«« I \- .1 ••—■ill •'.!• !■ \ •'.II .11.

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