Slightly more than $1 billion went into the new money market certificates during the first week they went on sale after June 1, according to a survey by the Federal Home Loan Bank Board.
Chairman Robert McKinney called the initial response "substantial" and said it indicated savings and loan associations were quick to use the new instrument to provent funds from being invested elsewhere. Of 250 large associations surveyed, 93 percent offered the certificates. The week's sales represented 0.7 percent of total savings, up from a normal monthly activity this year of 0.5 percent of savings balances.
Somewhat less than half of the $1 billion deposited during the first week represented new money, funds that were not transferred from low interest paying accounts in the same institutions. The median range was 40 to 45 percent new money. But McKinney predicted the percentage would grow later after the transfer of funds from existing accounts is largely completed.
The new money market certificates are sold in minimum denominations of $10,000 and bear an interest rate 1/4 of one percent above the average weekly discount rate for 26-week Treasury bills. Banks can also sell them at the Treasury rate.