CD Rates, Top 2 Year CD Rates at 1.26% APY
CD rates have been slowly drifting higher late last year and early in 2014. Only a small number of banks and credit unions have increased their CD rates the past six months, so the average increases have been small. One of the biggest increase in CD rates in our database came from a credit union, Pentagon Federal Credit Union (PenFed).
A few months ago PenFed increased their CD rates and became the leader on our tables for CD terms of 1 year through 5 years. PenFed had been offering a 5 year CD rate at 3.00 percent but has since dialed back their 5 year CD rates and no longer have the best rate. The credit union lowered their 5 year rate down to 2.00 percent, which is more in line with what banks are offering for 5 year CD rates.
Higher CD Rates in 2015
Overall, we won't see much higher CD rates until the Federal Open Market Committee (FOMC) increases the federal funds rate. The FOMC has the current fed funds rate in a targeted range of zero percent to one quarter percent. This policy has been in place since December 2008 and as a result has kept deposit rates low for many years now.
A majority of Committee members don't believe there will be a need to increase the fed funds rate until sometime in 2015. If the Committee is right about the fed funds rate, don't expect bank CD rates, savings rates, and all interest rates to move much higher before then. We will still see some banks and credit unions increase their rates in 2014, but the increases won't be much higher than where the top rates are right now.
For example, right now the best CD rates on our 2 year certificates of deposit rate table are at 1.25 percent with an APY of 1.26 percent. By the end of 2014, the best CD rates on 2 year certificates of deposit will probably max at 1.50 percent.
Current 2 Year CD Rates
PenFed has the highest 2 year CD rate this week at 1.26 percent APY but you have to join PenFed to open an account. Like any credit union, there are membership requirements to join. You can see if you're eligible here: PenFed Membership. If you don't want to join a credit union you can still get a really good 2 year rate.
The top bank CD rates right now on our 2 year rate list are just below PenFed's rate. The best 2 year bank rate on our database this week is from AloStar Bank of Commerce at 1.24 percent with an APY of 1.25 percent. CIT Bank CD rates on 2 year certificates of deposit are third on our list this week with a rate of 1.19 percent with an APY of 1.20 percent.
Top 1 year CD Rates
The best CD rates on 1 year certificates of deposit this week are also from PenFed and AloStar Bank of Commerce. PenFed's current 1 year CD rate is at 1.15 percent with an APY of 1.16 percent. AloStar Bank of Commerce 2 year rate is at 1.09 percent with an APY of 1.10 percent.
The third top rate this week is from both CIT Bank and GE Capital Retail Bank. Both banks are offering 1 year rates at 1.04 percent with an APY of 1.05 percent. Both banks require a minimum opening deposit of $25,000 to earn a 1.04 percent rate.
Highest 3 Year CD Rates
The highest 3 year certificate of deposit rates this week are from PenFed and Intervest National Bank. PenFed's current 3 year CD rate is at 1.50 percent with an APY of 1.51 percent. Intervest National Bank's current 3 year rate is at 1.44 percent with an APY of 1.45 percent.
The third top rate this week on our 3 year CD rate list is from two different banks, AloStar Bank of Commerce and Barclays Bank. Both banks are offering a 3 year rate of 1.34 percent with an APY of 1.35 percent.
Best 4 Year CD Rates
PenFed tops our 4 year CD rates list this week offering a rate of 1.75 percent with an APY of 1.76 percent. The second top rate this week is at 1.73 percent with an APY of 1.75 percent on GE Capital Retail Bank's Optimizer Plus CD account. Nationwide Bank has the third top rate this week at 1.66 percent with an APY of 1.67 percent.
Best 5 Year CD Rates
We have two banks offering the top 5 year CD rate in our database this week. Barclays Bank and iGObanking.com are both offering a 5 year rate of 2.13 percent with an APY of 2.15 percent. The second best 5 year rate is on GE Capital Retail Bank's Optimizer Plus CD at 2.08 percent with an APY of 2.10 percent.
Interest rates fluctuate often. Be sure to check on the most current rates by searching our rate tables daily.
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