CD Rates Move Higher This Week: Top 1 Year CD Rates at 1.07% APY
CD rates moved slightly higher this week as some banks increased the rates they pay on both short term and long term certificates of deposit. The best CD rates on 1 year certificates of deposit are now at 1.06% with an APY of 1.07 percent. This is considerably higher than the FDIC's national average 1 year CD rate of 0.19 percent for the week ending May 5, 2014.
For the rest of 2014, we will see some banks increase their CD rates but overall rates won't move much higher this year. CD rates will stay low until the Federal Open Market Committee increases the fed funds rate. Forecasts are for the FOMC to increase the rate sometime in 2015.
Interest rates will start moving higher sometime over the next 12 to 18 months. Once rates start moving higher, they will continue to move up for at least a couple of years. You should stay invested in shorter term certificates of deposit so you can take advantage of higher rates when they do arrive.