Short Term Certificates of Deposit are the Best Bet These Days

The past several months we have recommended staying invested in short term certificate of deposit rates to position yourself for higher CD rates in 2015. Investing in a CD term longer than 12 months right now would be a mistake because CD rates are set to move higher sometime in the next 12 months.

Anther reason why investing in longer term CDs doesn't make sense is because the yield curve is flat. The rate difference between the best 1 year rate and best 5 year rates is just over 1.00 percent. So it just doesn't make sense to lock into a 5 year CD with a rate around 2.25 percent when rate are going higher.

By the end of 2015 we will probably see 1 year CD rates at banks over 2.00 percent. Depending on how high the federal funds rate is upped we might see 1 year rates over 3.00 percent. So don't be tempted to lock into a long term CD now because you will regret it.

Listed below are the highest 3 month , 6 month and 1 year bank CD rates currently available on our rate lists:

3 Month Rates

  • EverBank 0.45%

  • AloStar Bank of Commerce 0.45%

  • Virtual Bank 0.40%

6 Month Rates

  • Zions Direct Bank 1.00%

  • Doral Direct 0.87%

  • EH National Bank 0.80%

1 Year Rates

  • Synchrony Bank 1.09% APY 1.10%

  • Silvergate Bank 1.07% APY 1.08%

  • GE Capital Bank 1.04% APY 1.05%

Author: Brian McKay
August 11th, 2014