Savers Flock To Md., Va.; Get More for The Money: Md., Va. S&Ls Lure Savers
Savings and loan associations in Maryland and Virginia are paying some of the highest interest rates in the nation on savings accounts, using their premium rates to attract millions of dollars of new deposits.</br></br>Advertising in national publications to reach savers far beyond their local markets, financial institutions in the two states are offering as much as 2 percentage points more on some accounts than prevailing rates in other parts of the country.</br></br>Rate-monitoring services report that local institutions are paying the highest interest anywhere on intermediate and long-term savings accounts, and their rates for all categories of accounts are consistently among the nationÛªs highest.</br></br>The high rates are one reason the Maryland General Assembly has formed a special savings task force that is scheduled to meet for the first time tomorrow.</br></br>The panel has not yet publicly stated the object of its inquiry, but its chairman, Sen. Howard A. Denis (R-Dist. 16), recently suggested one concern: fear that the state is being used as a conduit for what is known in the industry as ÛÏhot money.Û ÛÏHot moneyÛ refers to potentially unstable deposits, drawn by high interest rates, that could be pulled out at any time, possibly causing a shortage of funds for the institution.