The new insured money market deposit accounts at banks and savings institutions continued their explosive growth, reaching $183 billion last week, an increse of $24.3 billion over the week ending Jan. 12, the Federal Reserve reported yesterday.
Super NOW accounts, which pay market rates and allow unlimited checking, grew to $15.5 billion from $11.5 billion in their first week, ending Jan. 12. The increase is slower than that shown by the less-complicated money market accounts.
At the same time, assets of money market mutual funds fell for the eighth consecutive week by another $2.6 billion to $199.2 billion, according to the Investment Company Institute. Since Dec. 1, they have diminished by $33 billion. Wall Street economist Henry Kaufman last Thursday reversed his earlier forecast that money funds would continue to grow this year and predicted they would drop by about $50 billion.
In the same period, commercial bank savings other than money market accounts have slipped by $44 billion. Three-quarters of that amount represents certificates of deposit under $100,000. Because these certificates were purchased when interest rates were higher, banks would come out equal or slightly ahead on the amount of interest they would be paying if all that money went into the new accounts. The other quarter is from 5 1/4 percent passbook accounts.
The Federal Home Loan Bank Board issued statistics this week showing that $38.8 billion went into money market accounts at savings and loans out of a total of $87.6 billion reported during December by the Fed. That gives the S&Ls a 44 percent share of the market.
The bank board estimated that $7.6 billion, or 19 1/2 percent, came from outside sources. However, during that period, $8.2 billion was withdrawn from passbook accounts paying 5 1/2 percent. If all that money went into the new accounts, the cost of funds for S&LS would have increased.
Thanks to the money market account, savings and loans once again began attracting deposits in December after almost a year of outflows. That month's influx was sufficient to reverse the trend and make the year positive as a whole.