I have updated our average CD Rate graph, adding the week of January 21, 2013. Sorry that we have been quiet for a bit. Just trying to figure out what direction to go with the site. I love writing and providing rate info, but just not sure we are making the connection we desire. So leave a comment and let us know you want us to continue with the updates. And consider sharing with your friends through the various social networks such as Twitter, Facebook, and G+.

I survey the top 35 banks and credit unions that are available in the national market. So far credit unions have been a little disappointing with their rates. However, Pentagon has come through topping the nation with their rates on the 1-year to 4-year terms. They are the only credit union reaching the top 10 on the 1-year. There are 4 for the 2-year term and 6 on the longer-term CDs.

Rates Have Fallen a bit

Rates fell about 3 Basis Points across the board since October. Not huge, but I believe they will continue downwards. Interestingly the 1-year interest rates are still about 10 Basis points higher then they were in June. This could mean a couple of things. 1) Banks and credit unions are willing to pay a slight premium now, counting on lower rates when the CDs mature. Another year of low rates will cause some investors to stretch their term for yield and thus the institution is counting in locking the money in for a lower yielding, longer-term CD. 2) Banks and credit unions have a short-term need for funds. They anticipate slower loan growth and don’t want to lock in the higher paying, longer-term CDs. Below are the graphs for the average rates for banks and credit unions and business CDs. You will notice they are facing much lower rates.

It’s a Long Bomb to the End Zone

Corporate rates have taken quite a hit. Banks tend to place the biggest premium on retail CDs I believe because they hope to be able to sell other services such as loans and other investment products. Businesses generally have things in place and they are a much bigger ship to try to turn around. However, I believe if you can win someone over with a great rate and great service, you just might be able to get them to listen to you and I would believe such an account could be much more lucrative.

The Corporate rates have fallen 10 to 20 Basis Points across the terms. CD rates for banks and credit unions have fallen 3 to 10 Basis Points. And although the long-term rates have continued to fall, I still like to point out they are paying over twice as much as the 1-year rate. If you can find some long-term CDs with a relatively low penalty, do it. We have seen more and more banks and credit unions increasing their penalties. Time is running out on that strategy.

Although in football, the long bomb can be quite risky, rates are still likely to remain low for quite some time. A High Rate interception is very doubtful at this juncture. I think you will more than likely be facing even lower rates over the next two to three years. Get a little yield without too much risk while you can.

What are your thoughts?

If you find a good deal, let us know. Happy searching. Go Niners.
cd :O)

-- By Chris Duncan

Posted in Bank CD Rates