Word: cds
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...newspapers by Citibank last week, is among a growing number of signs that the battle for consumers' savings is heating up again. Starting in October, federal regulators will let U.S. banks and savings and loans pay whatever interest they want on certificates of deposit. The yield on most CDs is now tied to U.S. Treasury bill rates; a six-month certificate, for example, currently pays about...
Removal of the interest-rate ceiling on CDs represents one of the last major steps in the deregulation of consumers savings deposits. Previous moves have led to innovations like the popular bank and S and L money-market accounts, which pay attractive rates that typically rise or fall weekly. The average yield on such accounts was about 9% last week. The so-called SuperNow accounts, introduced last January, currently pay about 7%, but savers can write an unlimited number of checks against their deposits...
...latest regulatory easing permits several new CD features in addition to the higher rates. Banks and thrifts will be free to set any minimum balance on the certificates they choose. Most CDs, like SuperNow and money-market accounts, currently require minimum deposits of at least $2,500. The changes will also enable institutions to offer certificates that mature in virtually any period of time greater than 31 days and will relax the penalties for cashing in certificates before they come...
Some experts assert that the high-yielding certificates will further befuddle savers, who already face a bewildering range of choices over where to put their cash. "With all the NOWs, money-market accounts and CDs, consumers are shell-shocked and totally confused," says Richard Bove, a leading banking analyst for Shearson/ American Express. Nevertheless, bankers and savings and loan executives are expected to push the deregulated certificates, if only to keep customers from taking their business to competitors across the street...
...Digital CDs have several important advantages over conventional records. For one thing, there is no surface noise, since the laser reads only the numbers, not any dust or grime on the disc's laminated surface. Because nothing touches the disc, there is no wear. Digital records lack the distortion customarily found on LPs in loud passages and near the end of a side, when the sound is unnaturally compressed. The new players are designed to plug into conventional component systems, and the discs will be compatible with any player on the market...