CD Rates at Banks Stable as Real GDP Advances 0.4 Percent in Q4 2012
CD rates at banks are stable the last week in March, as the U.S. Bureau of Economic Activity released their "third" estimate showing fourth quarter 2012 GDP advanced 0.4 percent. The "first" estimate for growth in Q4 showed GDP contracting 0.01 percent so the quarter's growth is looking better but still down from the third quarter GDP growth of 3.1 percent.
Most economists believe the Q4 slowdown in GDP growth is temporary and that growth will pick up again in the first quarter of 2013. There have been many positive economic reports released in 2013 pointing to an economy that is gaining momentum and lowering the unemployment rate. The unemployment rate fell to 7.7 percent in February, down from January's rate of 7.9 percent.
Growth isn't as robust as it needs to be for the Federal Reserve to increase their key interest rate, the federal funds rate. The rate has been at nearly zero percent for many years now and this has depressed interest rates on deposit accounts such as certificates of deposit. All CD terms from 1 month to 60 months have very low CD rates. For example, bank CD rates on 60 month CD accounts are averaging just 0.77 percent. Just a few years ago, most banks were offering 5 year CD rates above the 3 percent range. Right now the best CD rates on 5 year CD accounts are under 2.00 percent and falling. The highest CD rates on 5 year CD accounts for our rate table are from The National Republic Bank of Chicago at 1.85 percent with an APY of 1.87 percent.
Average 1 month CD interest rates this week are averaging 0.06 percent while the best 1 month CD rates are at 0.15 percent. Average 3 month CD rates this week are at 0.09 percent and the highest 3 month rates are at 0.46 percent. As you can see, the highest rates on any given CD term are considerably higher than the average rates, so it pays to shop around to find the best rates.
To help you with your search on finding the best CD bank rates, following is a list of certificate of deposit terms of 1 month to 5 years:
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