Lifting the Lid

Banks go after money funds

Bankers and savings and loan officers have long cast envious eyes at money-market mutual funds. Reason: the lofty interest that the funds pay, which currently averages about 9%, has attracted some $230 billion in cash. But federal guidelines announced last week will allow banks and thrifts to challenge the funds on an equal footing beginning Dec. 14. The new rules permit the institutions to offer money-market accounts of their own without any interest ceiling.

The new investments will have a large competitive plus but also several minuses. On the positive side, the accounts will be federally...

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