Consumers and businesses are leaving their money in the bank, despite low interest rates.

Deposits at the nation's commercial banks rose 2%, to $1.7 trillion, in the 12 months through June 30, according to American Banker's semiannual survey of the largest 300 banks.

The data indicate that consumers and businesses are not fleeing from low bank rates into alternative investments as rapidly as some anecdotal evidence suggests.

"It's not unusual during a period of low rates for both businesses and consumers to think it's not worthwhile to spend energy and effort searching for higher rates," said Edward Furash, head of Furash & Co., a Washington consulting firm. "The net effect is that they leave more money parked in demand deposit or NOW accounts."

To be sure, banks have been losing deposits to mutual funds. Though aggregate deposits rose on an annual basis for the fifth straight year, they declined a modest 0.85% between Dec. 31, 1991 and June 30, 1992. Interest-bearing deposits alone fell 1.6% between March 31 and June 30 of this year, according to data released by the Federal Deposit Insurance Corp. on Wednesday.

Analysts attributed the outflow to seasonal factors, such as taxes, as well as a flight into alternative investments.

Equity mutual funds alone saw their assets jump 37%, to $322.3 billion at the end of June from $234.6 billion one year earlier, according to Lipper Analytical Services.

The six-month deposit decline, however, pales in comparison with the first half of 1991, when deposits fell by 1.6% at the nation's top banks.

Consumer Rates Dropping

Rates on interest-bearing accounts and certificates of deposits, meanwhile, continue their steady decline. Average NOW account rates are currently 2.26%, compared with 4.45% a year ago, according to Bank Rate Monitor of West Palm Beach, Fla.

Six-month certificates of deposit rates have fallen to an average 3.20%, down from 5.42% last September.

The paper's survey of the top 300 banks was based on call report data supplied by banks, showing interest-bearing and noninterest-bearing accounts in domestic and overseas offices.

The nation's two biggest banks, Citibank and Bank of America, continued to dominate the rankings. The New York-based unit of Citicorp saw year-to-year deposits grow 10%, to $126.8 billion. Much of the increase came from overseas offices, according to the Citibank's second-quarter 10Q filing with the Securities and Exchange Commission.

The BankAmerica Corp. unit, in San Francisco, saw its deposits climb to $111.4 billion at midyear from $75.2 billion one year earlier due to its parent's merger with Security Pacific Corp.

A Boost for Chemical

The biggest gainer among the top echelon of deposit gatherers was Chemical Bank, whose parent merged last December with Manufacturers Hanover Corp. Chemical, which ranked eighth last year with $32 million of deposits, moved into third place at June 30, 1992, with $76.3 billion.

Several large banks, however, saw deposits - generally considered their most stable source of funding - remain flat or fall slightly.

San Francisco's Wells Fargo Bank maintained its fifth-place ranking as deposits remained steady at $43 billion. Bank of New York, which moved up two notches to seventh place, nevertheless saw deposits fall 7%, to $28.9 billion, at the end of June, from $31 billion the previous year.

Assets Up 2.5%

Chase Manhattan Bank fell to fourth place from third place due to Chemical's merger-related growth, and saw its deposits fall slightly to $56.6 billion from $58.9 billion one year earlier.

In another survey finding, assets at the top 300 banks grew 2.5%, to $2.3 trillion, over the 12 month period ending June 30. They stood at $2.27 trillion one year earlier.

The moderate asset rise was fueled in part by banks' aggressive purchase of government securities, more than compensating for a decline in loans. The banks have been taking advantage of continuing wide spreads between their deposit rates and the healthy yield on government bonds.

However, economists said banks are loath to build assets too dramatically because of regulatory constraints on their capital ratios.

"Purchases of government securities proved to be an engine for a modest amount of asset growth," said David Jones, chief economist at Aubrey G. Lanston & Co. "But it's still a pretty slow growth rate. The whole problem is that the regulators put on tougher capital demands at a time of lousy [loan] growth."

Even as banks limit asset and deposit growth, however, the survey found a surprising jump in the number of branches reported by the leading institutions.

Total branches at the top 300 banks increased 8%, to 27,238, while the number of employees fell 1.8% to 893,743. Analysts said the small decline in payroll suggests that banks have a way to go before making good on their promises to reduce expenses through consolidation.

Towers Perrin, a management consulting firm, estimated last year that bank mergers, restructuring, and outsourcing would eliminate 100,000 jobs in 1992. However, just 16,690 positions have been cut at the top 300 banks in the 12 months ending June 30, according to the American Banker survey.

"Banks are actually acquiring employees," said Lowell Bryan, a consultant at McKinsey & Co. "Despite cost-cutting efforts, consolidation activities have resulted in more people at the top 300 banks."

Much of the increase in branches, on the other hand, reflect acquisitions of thrifts and banks that have not yet been consolidated into acquirers' branch systems.

"This reflects banks in transition, having made acquisitions, but not closing down all the redundant offices," said Mr. Furash.

For example, Chemical Bank said shortly after its merger with Hanover that the two would shutter about 80 overlapping branches. It does not plan to begin closing them, however, until later this year.

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