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CD Rates Vs. U.S. Treasury Yields
 

CD Rates Vs. U.S. Treasury Yields

Most riskĀ averse investors either invest in certificates of deposit or U.S. Treasuries. Unfortunately CD rates and Treasury yields have plummeted over the past several years. In fact, average bank CD rates and Treasury yields hit record lows this past month thanks to a lagging economy, government debt problems in Europe and tanking equity markets.

Just recently the Fed also announced it will keep interest rates at record low levels of zero percent until 2013. All these factors will keep CD rates and Treasury yields low as well.



Comparing current Treasury yields and CD interest rates you'll find certificates of deposit offer a higher return than bonds. Right now you can find 1 year CD rates at banks as high as 1.19%. Ally Bank's 1 year bank CD rates are paying that rate. Equivalent 1 year bond yields are 0.09%.

Granted in bond prices increase your return is juiced but it is hard to image bond prices increasing and bond yields decreasing right now since yields are already so low.

Find a list of the best CD rates at banks right here: CD RATES AT BANKS.
Author: Monica Harris
August 23rd, 2011