BANKING: The Non-Check Check

They look like checks and work like checks. They cannot be called checks because mutual savings banks in New York, as in ten other states, are not allowed to offer checking accounts. Still, seven New York savings banks are now advertising "payment orders" in a new effort to woo customers away from commercial banks. One of the lures: it is possible to vise a payment-order account in such a way as to earn interest on funds that are eventually needed to pay bills.

The plan works this way: a customer opens a special account at a savings bank with, say, a...

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