Beginning this week, you'll be able to put almost any amount of your money into a bank account - for almost any specified period of time - and enjoy money-market interest rates.
Until now, you could get high rates only on money market accounts or certificates of deposit (CDs) of 21/2 years or more.
But better interest rates for savers may mean lower profits for banks and thrift institutions, because it means a narrower margin - or ''spread'' - between their cost of money (what they pay out in interest to depositors, and on other bank liabilities) and what they earn from loans or other bank investments. That could mean higher charges for bank services such as checking and money orders.
This latest development in banking deregulation gives banks an important tool to retain, for a longer period of time, some of the enormous sums of money that have been flowing into money-market deposit accounts (MMDAs) since last December. Banking analysts, however, do not expect a repeat of the massive shift of funds that occurred with MMDAs.
''This is a relatively minor step in a series that is having profound effects overall,'' says David Cates, president of Cates Consulting Analysts Inc. of New York. Mr. Cates describes the event as a ''mopping up'' operation, since the shift in consumer attitudes toward market-rate deposits already occurred last December.
''I think it's going to be beneficial in that it's going to allow all sorts of financial institutions to compete, and that will be good for the consumer,'' says Robert -Person, national director of bank consulting for the -Coopers & Lybrand accounting firm.
Under the new ruling by the federal Depository Institutions Deregulation Committee, interest rates and maturities for time deposits between 31 days and 21/2 years, formerly set by government regulations, now are set by the free market.
Banks and thrifts establish their own minimum-balance requirements, terms, and interest rates. There will still be penalties for early withdrawal, although these will be more modest than in the past. But the flexible maturity dates should mean greater access to your money. If college tuition is due in 45 days, or a tax bill in 63, for example, CDs can be arranged for those time periods. This applies only to accounts established on or after Oct. 1.
This deregulatory move also eliminates an advantage enjoyed by thrifts in their competition with commercial banks. Savings-and-loan institutions and mutual savings banks could offer savers a quarter-percent higher interest on their NOW accounts or time deposits.
But the big move happened last December when MMDAs brought thousands of interest-rate-sensitive customers back to banks. They had deserted in the late 1970s in order to realize higher returns on money--market mutual funds that were not available at banks. Since last December, MMDAs have brought in more than $ 350 billion, making them the fastest-growing accounts in history.
Now, with the ability to offer CDs of any maturity, banks appear to have the means to coax some of that money-market money into longer-term investments.
''Typical banks are awash in dollars since last December,'' analyst Person says. Now ''banks will be able to 'incentivize' customers by allowing CD interest from 31 days to three to five years. The money should stay with the banks longer.''
An example of how banks are using this new tool can be seen at the San Francisco-based Bank of America. It has introduced ''Personal Choice Time Deposits.'' These permit customers to choose their own CD maturities, ranging from seven days to 10 years, in amounts of $500, $2,500, $10,000, and $100,000. Interest rates vary according to the term of the deposits.
The bank will automatically reinvest deposits, following a grace period during which customers may withdraw or deposit additional funds (and the bank can moderate, somewhat, the exponential effect of interest compounding). Bank of America time deposits of days or more will reduce monthly checking charges. The time deposits can be used to secure loans or used as collateral for loans.
This new banking development is expected to produce fallout, however: At many banks, customers who have not managed accounts properly, or who have kept a very low balance, or who frequently have used stop-payment orders on checks, may get socked for more service charges.
Edward M. Katz, president of the labor union-owned Amalgamated Bank of New York, complains that higher CD interest rates will be ''little more than an illusion for many consumers.'' Since banks will be paying higher interest for relatively short-term money, Mr. Katz says, ''a big segment of the industry will try to make up for it by charging more for virtually every service they perform.'' For smaller depositors, a single stop-payment order on a check, which may cost as much as $9.50 at some banks, could offset the extra interest earned on a small CD for an entire quarter.
Katz predicts some banks will suspend interest payments on low-balance passbook accounts and charge fees to maintain these accounts. Other moves may include increasing checking account charges, upping the minimum balance required for free checking, raising the interest banks charge on credit card accounts, and boosting fees for money orders, returned checks, and other services.
This latest deregulation is part of a continuing upheaval in the way America's money is banked. For the most part, the deregulatory process reverses laws enacted in the wake of the widespread financial ruin of the 1920s and '30s. From 1932 until just recently, the federal government prevented banks from offering market interest rates; instead, banks and thrifts were given low-cost, captive savers and clearly defined turfs.
Now with deregulation (which began in the late 1970s in order to foster competition), with inflation, and with general interest expenses approaching the market rate, banks are finding little cushion for profit.
Banks also have an unresolved customer-relations problem: Although bank customers want their savings to be highly liquid and to reflect higher interest rates, they do not want their car loans and home mortgages that way. Quite naturally, they prefer moderate interest payments on a long-term basis. Banks, therefore, are having a major problem convincing customers that long-term loans also should reflect the variable interest rates that banks experience in acquiring that money in the first place.
Nonetheless, consultant Cates says, for financial reasons banks and thrifts must make the transition from an older, low-cost, fixed-rate deposit base to a higher-cost, variable-rate base. To balance assets and liabilities, loans, too, must be shifted to higher rates that vary with the market.
Other deregulatory moves in the works:
1. Beginning Dec. 1, even small amounts can be deposited in the federally insured MMDA and the Super Now checking accounts as long as the money is covered by the tight restrictions imposed on the tax-deferred retirement accounts.
2. Beginning Jan. 1, banks can pay the same 5.5 percent interest as thrift institutions on passbook accounts.