Long Term CD Rates Top Out at 1.70% APY
Since the financial crisis 5 years ago, interest rates have moved lower. Right now long term CD rates are not much higher than short term CD rates. The CD yield curve is flat and will remain so for at least two more years as the Federal Reserve keeps their key benchmark interest rate near zero percent.
The yield curve for average CD rates at banks is even narrower than the highest CD rates available. The current average 3 month certificate of deposit rate is at 0.09 percent according to the FDIC. The national average 5 year CD rate this week is at 0.76 percent, only a 0.67 percent difference between average 3 month CD rates and average 5 year CD rates.
The best CD rates on our 3 month certificate of deposit rate list this week are at 0.51 percent APY while the best rates on 5 year CD accounts are at 1.70 percent APY, a 1.19 percent difference. If you have a 5 year CD coming due, you're going to have sticker shock. 5 years ago, the highest 5 year rates were well above today's rates.
In fact, I would advise against reinvesting in another 5 year CD since rates are so low. You're better off investing in shorter term CD accounts of 1 year or less since rates should be moving higher sometime before 2016. When rates move higher in the coming years, you'll be in a position to invest in certificates of deposit at higher rates than current rates. Whereas if you invest in another 5 year CD now, you would either have to wait until your account matured or cash in your CD and incur an early withdrawal penalty.
Right now the best bank CD rates on our 1 year CD rate list are at 1.04 percent with an APY of 1.05 percent. The highest 1 year rates are only 0.65 percent lower than the highest 5 year rates so you're not losing out on much interest. Below are list of the highest 3 month, 12 month and 60 month CD rates on our rate lists this week.
3 Month CD Rates
12 Month CD Rates
60 Month CD Rates
RatesORama.com Average Mortgage Rates