Highest CD Rates Remain Unchanged as Cyprus Taxes Deposit Accounts
CD rates in the United States remain unchanged as an unsettling proposal has been made for an EU country to help pay for that country's bank bailout. The tiny Mediterranean country of Cyprus plans to tax deposit accounts to help pay for a bailout. This is an unprecedented move that has created a backlash in the country as depositors lined up to withdraw cash from ATM machines.
The tiny nation is being forced to tax accounts by EU finance ministers and the International Monetary Fund (IMF). These two organizations are limiting the dollar amount of the bailout fund, forcing the country to come up with billions of dollars. This move is also scaring the world markets since another EU country in need of a bailout may also be forced to tax deposit accounts.
I still can't believe this tax is being proposed. People who have money in savings accounts already paid taxes on the money. Having to pay taxes again is like having some of your money seized by the government. There would be an enormous backlash if something like that was proposed in the United States.
I can honestly say that would never happen in the U.S. The only thing similar that is possible is having more than $250,000 in an account at a bank that fails. FDIC insurance only covers accounts up to $250k including interested earned on the account. The one thing we do have to deal with here is low bank CD rates.
Currently, the best CD rates on 1 year certificates of deposit are at 1.04 percent with an APY of 1.05 percent. The FDIC's national average 12 month certificate of deposit rate is at 0.22 percent this week, unchanged from last week's average rate. Both long term and short term CD rates are low these days and will remain low for at least the rest of 2013.
The national average 6 month CD rate is at 0.14 percent this week, no change from the prior week's average rate. The best 6 month CD rates are much higher than the average at 0.89 percent. The average 3 month bank CD rate this week is at 0.09 percent and the highest 3 month rates are at 0.59 percent.
2 year CD rates at banks are averaging 0.38 percent, also unchanged from the prior week's average rate. The highest 24 month CD rates at banks this week are at 1.19 percent with an APY of 1.20 percent. 3 year rates on average are actually higher this week over last. The current average 3 year CD rate is at 0.50 percent, an increase from last week's average of 0.48 percent.
The best 3 year CD rates this week are unchanged from last week. The best 3 year rate on our list is at 1.50 percent with an APY of 1.51 percent. The best 4 year rates are slightly higher at 1.55 percent with an APY of 1.56 percent while the average 4 year rate is at 0.62 percent. 5 year rates are averaging 0.79 percent and the best 5 year rates are at 2.00 percent with an APY of 2.02 percent.
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