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Key Bank will lower interest rates on about 22,000 of the 96,000 deposit accounts it assumed when it purchased 11 branches of the former Empire of America in September.

The 8 percent rate -- with a compounded yield of 8.33 percent -- that will be assigned to the accounts is higher than virtually every other certificate of deposit rate being offered by other Buffalo-area banks, said Herbert E. Knoll Jr., a Key Bank vice president.

Key has decided to change the interest rates on any account that was paid more than 8 percent. However, any account that matures before April 30, 1991 will not be changed, Knoll said.

Many of the former Empire accounts that are slated for rate changes had extended maturities of up to 10 years, Knoll said.

Some of them carried interest rates as high as 10.5 percent, well above the rates offered on any deposit account today.

"When you compare the 8 percent to the market today, we think it is a great rate," he said.

The other 78 percent of the former Empire accounts now held by Key will continue to receive the same interest rates promised by Empire when the accounts were opened.

Former Empire customers will begin receiving notices by mail today telling them that if they have performed no transactions in their accounts since Empire's takeover, they must notify Key that they wish to remain Key customers.

It is important that customers notify Key by Jan. 11 that they want to become Key Bank customers; those who do not and who also perform no transactions in their accounts will begin receiving an interest rate of only 5.5 percent.

Key will not change the maturity of any certificate of deposit it has acquired, Knoll said.

Calculations by Key Bank show that even customers who had CDs that carried 10.5 percent rates will not lose much interest by switching to 8 percent accounts.

The difference in interest each month per $1,000 would be $2.08 for a 10.5 percent account that is switched to an 8 percent rate.

Customers who decide not to become Key Bank customers may withdraw money from their CDs without penalty.

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