Many a saver passing up higher-yield money accounts

Many bank customers seem to be walking examples of inertia, which the dictionary defines in part as the tendency of an object to stay at rest if it is already at rest, or to stay put. Despite years of articles and advertisements about higher yields available for savings in money market mutual funds and the newer money market deposit accounts offered by banks and thrifts, a lot of money is still in 51/2 percent passbook accounts.

More than three-quarters of American households still have these regular savings accounts, according to a recent study designed by the Financial Products Group of Chicago and conducted by Market Facts, a Chicago-based research firm.

``It's amazing,'' says Biff Motley, president of Financial Products. ``It's astounding to hear of so many people who have substantial amounts of money in regular savings accounts.''

Of about $305 billion in regular savings accounts, 92 percent, or $280 billion, is in accounts where the balances are $1,000 or more. That's the minimum required to open a money market deposit account, where the yields are two to three percentage points higher, but where they have been as much as five or six points more.

The story is much the same in affluent households. In families with incomes of $75,000 or more, 42 percent had at least $2,500 in regular savings accounts.

While 76 percent of all American families have a regular savings account, only 24 percent have a money market account, Mr. Motley says. Of that 24 percent, 70 percent have both a money market account and a regular savings account. These people usually do have more money in the higher-yielding account, say $40,000 or $50,000, but they still have $4,000 or $5,000 in the lower-earning passbook account, Motley says.

In fact, he notes, the more money a family has in a money market account, the more money it is likely to have in a regular savings account.

Looking for the reasons for all this uncovered some interesting attitudes about money, he recalls. Three of the most common reasons given for keeping large balances in regular savings were potential family emergencies; ``I always had one''; and convenience.

But there can be other factors. One corporate executive, for example, felt guilty about making withdrawals from his money market account for things like country club membership dues or paint for his boat. But he didn't feel guilty using his regular savings account for these payments. And, yes, he was aware of losing money because of the lower interest that account offered.

This example notwithstanding, the vast majority of people holding regular savings accounts are middle-income, ``the broad middle market,'' Motley says.

That market will be closely watched beginning next year, when all restrictions are taken off savings accounts. There will be no minimum deposit requirement and banks will be able to pay whatever interest they like.

For his part, Mr. Motley thinks many banks and thrifts will continue to pay 51/2 percent or something close to it and will play down any changes they do make. This means customers who want higher yields shouldn't assume their old bank offers them; it may be time to find another bank for savings.

``Eighty percent of the banks will stay right where they are, keeping minimums in place and paying 51/2 percent on savings,'' Motley says. Banks that do raise their rates ``certainly aren't going to send letters to their savings customers telling them to move their money. And they certainly aren't going to switch people into higher-yielding accounts automatically.''