Top Certificate of Deposit (CD) Rates This Week: Best 1 Year CD Rate at 1.05% APY

The top certificate of deposit (CD) rates on 1 year CDs this week are from GE Capital Retail Bank, CIT Bank, and Amtrust Direct. All three banks are currently offering 1 year CD rates at 1.04 percent with an APY of 1.05 percent. Historically speaking, a 1 percent CD rate is rather low but when you compare this rate to the current national average 1 year rate of 0.19 percent, the rate starts to look a lot better.

The highest 1 year CD rates have hovered just above 1.00 percent for a couple of years now. About a year ago the top 1 year CD rates were around 1.14 percent with an APY of 1.15 percent. While we don't anticipate the top 1 year rates falling from current levels we also don't expect rates to move higher this year.

CD rates, savings account rates, and all other deposit rates won't move higher until the Federal Open Market Committee (FOMC) votes to increase the federal funds rate. Deposit rates are directly tied to the fed funds rate, so when the rate is increased financial institutions quickly follow by increasing their rates. When the FOMC lowers the fed funds rate, financial institutions quickly follow by lowering their deposit rates.

The current fed funds rate has been in a targeted range of zero percent to one quarter percent for over 5 years now. Back in December 2008, the FOMC lowered the fed funds rate down to zero percent to one quarter percent to help the economy recover from the worst economic crisis since the Great Depression.

Now that the Great Recession is behind us and the unemployment rate has fall from a high of over 10 percent to the current rate of 6.7 percent, we can expect higher rates within a year. In the FOMC's March economic projections, 7 committee participants said they believe the fed funds rate will have to be increased to 0.50 percent in 2015.

If the FOMC does increase the fed funds rate to .50 percent next year, the best 1 year CD rates will probably be increased to 1.50 percent. Longer term projections for the fed funds rate are between 3.25 percent and 4.50 percent. A fed funds rate at 4.50 percent would sent 1 year bank CD rates above 5.00 percent.

Listed below are the best CD rates on 1 year certificates of deposit this week:

  • GE Capital Retail Bank Optimizer Plus 1.05% APY

  • GE Capital Retail Bank 1.05% APY

  • AmTrust Direct 1.05% APY

  • CIT Bank 1.05% APY

  • My e-BAnC by BAC Florida Bank 1.01% APY

  • VirtualBank 1.01% APY

  • AloStar Bank of Commerce 1.00% APY

  • Colorado Federal Savings Bank 1.00% APY

  • The Palladian PrivateBank 1.00% APY

  • Ally Bank 0.99% APY

  • Home Savings Bank 0.98% APY

  • California First National Bank 0.95% APY

  • Discover Bank 0.95% APY

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Author: Brian McKay
March 25th, 2014