The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-12-03
MAY PUT IT. IN REAL ESTATE.
LOWER INTEREST MAY LEAD
BANK DEPosITORs TO INVEST.

savings Banks Expected to Reduce
the Rate to 3 Per Cent. on Jan. /.
The Trend of Interest Is Down
ward, and They Cannot Use Saw
ings NJ Profit and Pay More
would Prefer That Large Deposit
"rs Put Their Savings in Property
Or Securities and SO Stimulate
business.
Jan. / will probably see a reduction In
the rate of interest paid by Savannah saw
ings banks to 3 per cent. At present the
rate is S1a and per cent. An agreement
is expected under which all of these in
stitutions will pay the same rate and that
lower than the interest allowed up to this
time.
Even at 8 per cent, it is said the Sa-
yannahians fortunate enough to have
funds on deposit will be getting one-half
to 1 per cent. more than is now being paid
by many of the leading savings funds of
the North. But that will be small conso-
lation TO the depositors, many of whom
win probably feel that the proposed in
terest is a rather small return on their
money.
According to those interested in the saw
iugs banks it has been evident for some
time that a reduction would have to be
made on the rate of interest allowed to
depositors. 1t has become almost impossi-
bic to use the money to advantage and
nay such a rate of interest as in the past
Everywhere the trend of interest has been
downward. Up to the last year or two it
has been possible to pay per cent, and
still derive a reasonable profit from the
l.se of the deposits. But that time has
passed and as plain matter of business
il has become necessary to take the step
proposed.
1--WE have frequently urgedlparties hav-
ing large deposits in our savings depart
ment to take out their money and other
wise invest it," was the statement that
two bank officers made in discussing the
matter. 1--WE have pointed out to them that
II was an error of judgment on their part
not to put it in good securities or in real
estate, but as long as the rate of interest
was comparatively high they declined to
act on the advice. The probable effect of
IKE decrease in the rate will be to lead
TO Withdrawals and investments in this
way. This is certainly a desirable result,
as its tendency win be TO stimulate bust
ness Whether they do this or not, though,
pay the present interest.
Parties who havestwo or three thousand
dollars in savings banks" said another Of
hcer, would certainly find it to their
financial advantage to put ii in real estate,
from which, if properly managed they
should get at least a net income of five
per cent. The idea of savings banks is not
for persons to let large sums of money ac-
cumulate in them. AS a rule they win not
take on deposit more than a certain
amount, say 5000. from one individual de-
postor, and frequently smaller rates of in
terest are paid as the amount on deposit
grows larger. These institutions are in
tended TO encourage the savings habit in
persons, to get them to put aside small
amounts until they have an aggregate suf-
tcient TO utilize in the purchase of a home
or other good tuvestment. If the amount
that any one person is allowed to have on
deposit and draw interest on were reduced
it would probably have good effect in
forcing investments outside. Real estate is
safe and I anticipate that there will be
heavier investments in it than in securi-
tics as most persons having savings on de-
post do not know much about stocks and
bonds and are averse to putting their
money in Them