For 16 years, the top interest which New York banks were allowed to pay on savings deposits was 2%. But when all other interest rates edged up, savings banks began to clamor for an increase. Though their earnings were up, so were operating expenses, and a corporate federal income tax was imposed on them last year. Banks were also losing business to savings & loan associations, which generally pay 3% or more. Last week the State Banking Board permitted the banks to pay 2½%. By week's end banks in New Jersey were raising rates too.
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