Best 1 Year CD Rates Hit 1.50 Percent…Thank You Fed

CD rates have slowly inched higher for the past year and we recently reach a point for 1 year CD rates, which we haven't seen for about a half dozen years. We can thank the Federal Reserve for higher CD rates and we can also thank the Fed for 1.50 percent 1 year CD rates. 

That's right, the best 1 year CD rate available on our rate list has hit the 1.50 percent milestone, a level we haven't seen since 2011. The outlook for CD rates in 2017 and beyond is also promising because the Fed is expected to continue increasing the Fed funds rate. 

Last month, the Fed increased the federal funds rate 0.25 percent to a targeted range of 0.75 percent to 1.00 percent. This is on top of the 0.25 percent increase we saw in December 2016. The Fed also mentioned the likelihood of at least two more rate increases in 2017.  

Two more fed funds rate increases in 2017 would put the fed funds rate at 1.50 percent. This would send the best 1 year CD rates towards 2.00 percent. The last time we saw 1 year CD rates at or above 2.00 percent was just after the financial crisis nearly 10 years ago. 

Author: Brian McKay
April 25th, 2017