CD Rates Continue To Move Lower

CD Rates Continue To Move LowerCD rates continue to move lower this past week, continuing the downward trend ever since the Federal Reserve started lowering the fed funds rate. When we started 2019, the best CD rates on 12-month certificates of deposit were around 2.75 percent.

Forecasts were for 12-month CD rates to go above 3.00 percent sometime in 2019. Now a 3.00 percent CD rate is out of reach, at least for this economic cycle and maybe in our lifetimes. About a decade ago, a 1-year CD rate of 5.00 percent wasn't unheard of, now I'm pretty sure I won't see that in my lifetime.

Thinking back nostalgically back to the early 1980s, I remember my grandparents getting 1-year CD rates around 12 to 13 percent. Shorter term CD rates were even higher, 3-month CD rates were around 18 percent. The early 1980s was my first introduction to certificates of deposit, remembering my parents and grandparents talking about how high CD rates were.

In addition to talking about how high CD rates were, I also remember them talking about how high inflation was at the time. So, it is a tradeoff, these current low deposit rates are a direct result of low inflation.

Back to the present time and rates, the highest 12-month CD rates this week on our rate list are at 2.23 percent with an APY of 2.25 percent from Cross River Bank. The highest 6-month CD rates right now are at 2.03 percent with an APY of 2.05 percent from TotalDirectBank.

Looking to invest in a longer-term certificate of deposit? The best CD rates on 3-year certificates of deposit are at 2.40 percent and the best 4-year CD rates are at 2.45 percent. Both these top CD rates are also offered by Cross River Bank.

Always compare CD rates online to make sure you are getting the best CD rates available.
Author: Brian McKay
December 15th, 2019