What Are These Rates Doing?

We have added a new category (Articles).? This will provide little snippets and notices of new articles we have posted.

The newest one looks at where rates have been, are, and could go.? Check it out and then come back and leave some comments so we can start some dialog.? And, hey tell your friends, too.

Here?it is.? Highest CD Rates

FOMC Leaves Rate at 5.25%

Today the FOMC left the overnight lending rate that banks make to each other at 5.25%.? This is the eighth time they have not changed the rate.? The last time rates were changed was last year on June 29, 2006.

They cited the concern that inflation has not decreased as much as they would like.?

This should leave CD rates in the ranges we’ve been seeing.? T

FDIC Insurance Limit Estimator

Both the FDIC and NCUA have insurance limit estimators so that you can verify all of your?CD investments and other accounts?at any given institution are insured.

Before investing any funds in a bank or credit union first?make sure you can verify they are federally insured.? A bank will have an FDIC# that you can look up here and a credit union will have a Charter# that you can look up here.

Once you have verified the institution is federally insured use the FDICs EDIE program if it is a bank or if it is a credit union use the NCUAs program to make sure all of your funds are insured.? I recently tested both systems and they showed that a husband and wife with three qualifying beneficiaries could have up to $700,000 of insurance.

The Ups and Downs

Here is an update on treasury yields, “The 2-year?yield is down to 4.82%, the 5-year 4.90%, and the 10-year is up 12/32s to yield?5.03%.? That 10-year yield is down a whopping 30 basis points from where it was just two weeks ago.”

The fact is the underlying conditions haven’t changed.? The media can only fake it so long.??The slightly extended nature of the current upswing (two-weeks?) has led to a slight increase in CD rates.?

Current CD rates are still above historical averages and they still will be even if rates return to the levels they were a few weeks ago.?

Here is some historical average rate information since 1993:

Keep in mind these historical CD rates are the true rate (APR), not the compounded yield (APY). Also, these rates only reflect what our clients actually purchased. This means the true averages are much lower.

For more historical rate information visit our dedicated historical CD rates page.

Fighting Off the Bears

Bear Sterns bailed out one of its Hedge Funds to a tune of about $3.2 Billion dollars.? And even word there may be need for a second bail out.? This is due to many sub-prime loans going into default.

The recent rise in rates compounds the problem because many people hoping to refinance are facing refinance rates they still can’t afford.

This poses serious problems for the Fed and really I think banks and mortgage brokers need to step up to the plate.? If the Fed lowers rates to provide some aide, the Private Equity market will probably burn out of control with even cheaper money.?

However, banks and brokers could offer some relief and just fix the loan rates so that the people don’t lose their house and the bank doesn’t end up with a property it can’t sell.? Maybe the people could be required to give back a portion of the profit on a future sale to make the rate adjustment equitable to both parties.? I believe in this case a private sector solution is better than a government one.?

If the Fed raises rates to stave off inflation, the problem for housing will grow even worse.? Some homeonwers that may have made it through one reprice, will not make it through a second and many of the ones facing their first will certainly have problems.? The rise in rates will cool down the Mega Merger/Buy-out mania which could use some cooling.

The continued duel of inflation vs. economy will probably stay in a stalemate for now.? But the Fed is really caught between a rock and a hard place.

cd :O)

We’re Back

Yes, we are back and survived an 815 mile, 12-hour drive.? We had a great vacation.? Great hikes, eating, and even a Mountain Bike adventure.? I’ve updates most of our CD Rate related posts.

cd :O)

Gettin’ the heck out of Dodge

My family will be on vacation next week so don’t look for many posts, unless I can convince my wife that I need a computer fix.

If you have any questions about the company or our services call 800-234-4605, my associates will certainly help.

Millennium Bank

I get lots of calls about?Millennium Bank.? Since we don’t deal with any non-FDIC insured offshore banks, I really haven’t take the time to do research on them, but a fellow eMarketer did so I’ve posted?a link?to his post

Some other feedback about Millennum Bank, doesn’t leave one with warm fuzzies.? I would be curious if anyone has had a postive experience with them.

General rule of thumb to investing: the higher the return, the higher the risk.? In this case, I don’t believe the rate of return is high enough to accomodate the risk. cd :O)

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IndyMac Bank Certificate of Deposit Rates

IndyMac has a nice 7-month CD rate of 5.31% APR / 5.45% APY. They are quite a large bank with over $29 Billion in Assets.

Their Certificate rates website is IndyMac Bank

Their FDIC# is 29730

Updated 8/03/07

Highest CD Rates Moving Up

We’ve seen the inversion on CD rates practically be wiped out.? But, for the most part, Banks and Credit Unions still aren’t paying a big premium for the long-term rates vs. the short-term.? We’ve seen the highest 1-year CD rates move to the 5.50% APR range.? Outside of some specials, the 5-year is at 5.60%.