(2/16/99)

How much more could you be earning by changing the way you save money? Millions of American savers could collect billions more in interest each year, with no added risk. So says a study released in Washington today. Charles Sherrill explains in this report from our Washington bureau.

Americans have about $1.5 trillion on deposit in savings and checking accounts. They'd be almost as well off with their money under the mattress for what little interest they're earning.

Stephen Brobeck, of the Consumer Federation of America says, "We found that rates paid by banks on interest checking and traditional savings accounts have never been lower."

Brobeck says higher interest is available just for the asking. "If consumers were to shift the well over $1-trillion they keep in traditional savings accounts into c.d.s just at the same institutions, they would earn an additional $20-billion annually in interest."

That averages out to about $400 per family per year. "This is really a no-brainer," Brobeck says. "People ought to be doing it."

How much difference can a couple of percentage points really make in the amount of interest you earn? "On a $10,000 c.d. held for 20 years, a two percentage point interest difference represents about $10,000 either lost or gained."

So don't expect the bank to bring it up if you have money there that should and could be earning more. "They do not feel as if consumers are demanding higher rates. Consumers should demand higher rates. And the most effective way to make that demand is to start shifting their funds," Brobeck says.

You could, of course, move your money to the stock market and potentially earn much more. You could also lose your shirt. And if you do, the government won't guarantee to replace it like they will at a bank.

The gap in interest rates between savings accounts and certificates of deposit has grown by nearly 2-percent during the past 5-years, according to today's report. Sponsors of the study say banks are raking in record profits.