CD Rates Set to Move Higher in 2015 and 2016

CD rates are slated to move higher sometime next year and will continue to move higher in the coming years. Rates are set to increase because the Federal Open Market Committee (FOMC) will increase their key benchmark interest rate, the federal funds rate. After a half dozen years of very low rates, higher CD rates will be welcome news.

The best current CD rate on 1 year certificates of deposit are at 1.09 percent with an APY of 1.10 percent. A CD rate just above 1.00 percent doesn't sound great but when you compare that rate with the average 1 year rate of 0.20 percent, it looks a lot better.

Long term CD rates aren't much better than short term rates. Currently, the highest 5 year rate is just above 2.00 percent. Since rates will be moving higher, we recommend sticking with shorter term CDs so you can take advantage of higher rates when the do come. We believe rates will increase sometime over the next 8 months, so you should stay with CD terms of 6 months or less.

Following are the best short term CD rates currently available:

Best 6 Month Rates

  • Zions Direct 1.00%

  • Doral Direct 0.87%

  • EH National Bank 0.80%

  • AloStar Bank of Commerce 0.75%

  • Colorado Federal Savings Bank 0.70%

  • My e-BAnC by BAC Florida Bank 0.70%

  • Discover Bank 0.65%

  • VirtualBank 0.65%

  • First Internet Bank of Indiana 0.60%

  • TIAA Direct 0.60%

Best 3 Month Rates

  • AloStar Bank of Commerce 0.45%

  • EverBank 0.45%

  • Goldwater Bank 0.40%

  • VirtualBank 0.40%

  • Barclays 0.35%

  • Discover Bank 0.35%

  • First Internet Bank of Indiana 0.35%

  • EH National Bank 0.30%

  • USAA 0.30%

Author: Brian McKay
August 13th, 2014