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Low CD Rates and Savings Rates Continue

Low CD Rates and Savings Rates Continue

For many years now CD rates, savings rates and money market rates have drifted lower. The reason why interest rates have fallen so low and haven't moved higher is that Federal Reserve has kept their key interest rate, the fed funds rate, in a targeted range of zero percent to one quarter percent. As a result of the Fed's policy, average CD rates at banks and all deposit rates have fallen to record lows.

Low CD Rates and Savings Rates ContinueThe Fed just released their March meeting minutes showing that the Fed will keep their current policy of having the fed funds rate just above zero percent. This will mean rates on interest bearing assets will also remain low for the foreseeable future. The meeting minutes contained results of a survey of primary dealers which showed that dealers continued to believe the fed funds rate will be increased in the third quarter of 2015.

The results of the survey are not a surprise since the Fed has stated that they plan to keep the fed funds rate at near zero percent until the unemployment rate falls below 6.5 percent, which the Fed believes will happen at the end of 2015. Right now the best CD rates on 12 month certificates of deposit are at 1.04 percent. The best savings rates are just below that rate at 1.00 percent.

Following is a list of the highest 12 month CD rates this week and the highest savings account rates from banks:

Highest 12 Month CD Rates

  • GE Capital Retail Bank 1.04%

  • Colorado FSB 1.00%

  • Home Savings Bank 1.00%

  • One West Bank FSB 1.00%

  • Doral Direct 0.97%

  • E-Loan 0.91%

  • Discover Bank 0.90%

  • Barclays Bank 0.90%

  • California First National Bank 0.90%

  • Ally Bank 0.89%

Highest Savings Account Rates

  • CIT Bank 1.00%

  • Barclays Bank 1.00%

  • FNBO Direct 0.85%

  • Colorado FSB 0.85%

  • Ally Bank 0.84%

  • Bank of Internet 0.80%

  • Discover Bank 0.80%

  • Capital One 360 0.75%

  • Heartland Bank Direct 0.70%

  • Centennial Bank 0.65%

All of the banks listed here have deposits insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. When comparing interest rates, you will only find FDIC insured banks listed on our rate tables.

Author: Stacy Everest
April 11th, 2013