A resurgence in attractive money market deposit rates at banks could spell trouble for SEI Corp., a bank fund servicing firm.

The company has had high hopes for a corporate sweep program that is built around money market mutual funds.

SEI - a firm best known for its systems work with trust departments - rolled out its sweep program a year ago, during a period when money market fund returns were drawing enthusiasm from corporate treasurers. But changes in the interest rate environment could mitigate the ability of money market mutual funds to compete.

Fixed interest rates in the 6% range offered for insured money market deposit accounts by banks could bear more appeal than risk-inherent returns of their mutual fund cousins.

Officials at SEI, however, said they're not worried about the changes in the interest rate environment. They say they believe the relative ease of investing in mutual funds will keep them in the game.

"The treasurers want efficiency, timeliness, good reporting, and safety," said Dennis J. McGonigle, a senior vice president with SEI. 'Then they want yield."

The Wayne, Pa.-based investment management firm designed the plan, dubbed the Cash Management Investment Program, specifically for banks to woo big-business clients into mutual funds overnight instead of money market deposit accounts.

SEI signed on 11 banks, mostly midsize banks with approximately $10 billion in assets, that wanted to give corporate clients another investment option. According to Treasury Securities, a Chicago-based consulting firm, 77% of the country's approximately 500 banks already have such product offerings.

Corporate treasurers have been a burgeoning class of bank clients for money market mutual funds.

Last year an average of $92 billion was swept daily into money market mutual funds, a 64% increase from 1994, according to Treasury Strategies, a research firm that studies the use of sweeps by banks' corporate clients.

The firm also found that average balances in sweep accounts used by corporations rose 22% during the same time period.

Meanwhile, assets in money market deposit accounts rose 21%, to more than $705.7 billion over the past year, according to the Federal Reserve.

Mr. McGonigle said he thinks banks should dominate in corporate cash investment "because they handle the toughest part of it - cash disbursement - there's no reason they shouldn't handle everything."

SEI's sweep uses money market funds managed by Wellington Management Co. and Weiss, Peck & Greer. It can also incorporate banks' proprietary mutual funds.

The program links the bank accounts with the funds and provides the associated processing, record keeping, and reporting.

To date, Mr. McGonigle said he still sees banks marketing sweep products reticently to middle-market businesses.

"They'll tell the client about it if the client asks for it," he said.

Mr. McGonigle also said that he has encountered banks that are still concerned about assets moving from deposit to investment accounts. "The financial officer is always concerned about the deposit base," he said.

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