Magazine article American Banker

Tampa Banks to Eliminate Fixed Rates on Passbook Savings, NOW Accounts

Magazine article American Banker

Tampa Banks to Eliminate Fixed Rates on Passbook Savings, NOW Accounts

Article excerpt

Tampa Banks to Eliminate Fixed Rates On Passbook Savings, NOW Accounts

Bankers here said they planned to end the days of fixed-rate interest on passbook savings accounts.

The initial rates probably will be lower than the 5.5% currently offered on most of the savings accounts. Some local bankers said the rate could fall to as low as 5%.

Also affected will be the rates paid on NOW checking accounts. Those eventually will go to a variable-rate plan as well, the bankers said.

For decades, passbook or regular savings accounts remained firm. Regardless of how high other interest rates soared, depositors received a flat rate of interest.

While none of the banks contacted said they would immediately lower their rates, all indicated they are taking "hard looks' and would probably switch to variable rates in the near future. Most of the banks already offer variable rates on their other accounts.

"We are looking at it, no doubt about it,' said Kevin Barris of NCNB National Bank of Florida, Tampa, a $7 billion subsidiary of NCNB Corp., Charlotte, N.C.

Mr. Barris said the steady declines in interest rates have "changed the way we look at it.'

Like most Florida financial institutions, NCNB prices its variable-rate accounts weekly, Mr. Barris said.

"Some we change, some we don't,' he said of those accounts.

While Mr. Barris said that NCNB doesn't plan to make any immediate changes, he said the bank has put a notice in the lobby saying that as of Aug. …

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