Higher yields and an influx of money into individual retirement accounts continued to fuel growth in certificates of deposit during the first quarter.

The Federal Reserve reported last week that assets in small time deposits grew at an annualized rate of 30% during the period. Deposits of under $100,000 at commercial banks and thrifts rose from $820.5 billion at yearend 1994, to $882.1 billion at the end of March.

During the first quarter of 1994, CD assets declined at an annual rate of 6.4% to $769.9 billion.

Some bankers attribute the growth in CD assets to continued aggressive pricing of CD yields in order to feed loan growth, and the annual rush to open IRAs before the April tax deadline.

At California Federal Bank, in Los Angeles, retail deposits grew $570 million during the first quarter, with the majority of the inflows going into seven-month and two-year CDs, according to Joseph Petitti, an executive vice president.

That's in sharp contrast to last year, when CalFed lost $2 million in CD money during this same period.

The $15 billion-asset thrift launched an aggressive marketing campaign at the beginning of the year that focused on getting consumers to open up retirement accounts with the bank, Mr. Petitti said.

"We kept telling people, you have to plan for retirement," he said. "And our CDs lend themselves nicely to IRAs."

At First National Bank of the Berkshires, in Lee, Mass., CD growth was moderate in the first quarter, but increasing loan demand has led the bank to compete more aggressively for CD dollars, said the bank's president, William J. Napolitano.

In the first three months of the year, the $60 million-asset community bank saw $1 million move out of lower-yielding savings and money market accounts and into CDs with maturities of one year or more, he said.

CDs account for one-third of the bank's total deposits.

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