Business: Increasing Interest

Responding to pleas from commercial banks, the Federal Reserve Board and Federal Deposit Insurance Corp. last week authorized their 13,100 member banks to increase their interest rate from 3% to 4% on savings and time deposits left for at least a year. The step was chiefly intended to help the commercial banks compete more successfully with mutual savings banks, whose rates run as high as 3¾%. and with savings and loan associations, whose rates run up to 4½%. A secondary purpose: to help the banks hold foreign deposits that might otherwise flee to higher interest havens abroad, thereby increasing the outflow of gold from the U.S.