DAILY NEWS, WEDNESDAY, AUGUST 15, 1979

Finally pur

a bank offers you incentives

somewhat

more appealing than a tacky little toaster

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C. STATEMENT BY BETTY FURNESS, AUGUST 15, 1979 (EAST NEW YORK SAVINGS BANK ADVERTISEMENT)

BETTY FURNESS, Action 4 (8-15-79) "Instant Interest Account"

Attachment 3

Because a lot of people are taking their money out of savings banks and putting it in funds that pay higher interests, the savings institutions are thinking up new ways to hand on to your money. Betty Furness has a striking example...

It's instant gratification time at the East New York Savings Bank which is offering what it calls Instant Interest Accounts.

If you agree to tie up a given amount of money for a prescribed period of time, East New York will pay you the interest up front in the form of goods, not money.

The wildest example is: deposit $160,000 for years and East New York will pay your interest right now in the form of a Silver Shadow Rolls Royce.

If $160,000 is beyond your immediate means, how about $1,475 for 4 years for a 19-inch Quasar Color TV set, or $1,485 locked in for 4 years will get you an 8 day vacation in Morocco, for one, right now.

The flowered shirt and striped shorts are not included.

East New York's pitch is that if you take the interest in these forms now, the items cost less than they would if you waited to get the interest in cash at the end of whatever the investment period and then paid for them yourself.

There's little doubt that household appliances and vacations will cost

more 4 to 6 years from now than they do today.

The 19-inch Quasar TV set is $469 at retail today.

If you left the $1,475 on deposit for 4 years, you would get $524 interest. The $160,000 that will get you a Rolls Royce today will pay you $146,165 interest in 8 years. The Rolls list price today is $69,900. Sales tax brings it to $76,000.

Who's to say if it will cost $70,000 more in 8 years?

But if you want to gamble on beating inflation before you tear off to put down your money and pick up your merchandise or vacation, there are a few things you should know.

East New York Savings will pay the sales tax where applicable, but whatever objects or vacation you choose, you will have to pay federal and state income tax on its "fair market value" this year, the year you receive the interest in the form of whatever.

Then, if you should need your money between now and the time you've agreed to leave it on deposit, the penalties for carly withdrawal are severe.

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If all or any of it is withdrawn prematurely you would have to give the bank the total cost of the goods or vacation you received plus six months interest calculated on the net deposit.

Though East New York is the first and only bank to offer these high ticket items up front in lieu of interest in this area, it was done by some state chartered banks in the West several years ago.

For a 30-month $1,800 certificate of deposit a Texas savings bank offered a $232 Browning automatic shotgun. The bank sweetened the deal by offering to loan the depositor the $1,800 to purchase the certificate.

I don't think you'll see that kind of offer locally, but you can look for other new incentives to leave your money in savings institutions as they inevitably become more competitive.

If you do take the Rolls Royce in lieu of interest, drive carefully.