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The Misery of Low CD Rates Will Continue into 2013 and Beyond
 

The Misery of Low CD Rates Will Continue into 2013 and Beyond

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The miserly of low deposit rates will continue into 2013 and probably into 2015 as the FOMC is planning to keep the Federal Funds Rate in a targeted range of zero percent to one quarter percent. As a result, banks will keep CD rates and all deposit rates near record lows until then. In fact, we will probably see bank CD rates continue to drift lower in 2013. The average declines will be small only because rates are already very low.

The best CD rates these days on 1 year certificates of deposit are just above 1.00 percent at 1.04 percent. Two banks are currently offering the highest CD rates at 1.04 percent with an APY of 1.05 percent. This rate is much higher than the FDIC average of 0.23 percent for the week ending January 14, 2013.

About four years ago, you could find many 1 year CD rates at banks in the 4 percent to 5 percent range - now you can't even find a 5 year CD rate that high. The highest CD rates on 5 year certificates of deposit are in the 1.00 percent range as well. The top CD rates on our 5 year certificate of deposit rate list are at 1.78 percent with an APY of 1.80 percent.

Two banks, CIT Bank and Nationwide Bank are offering the 1.78 rate and yield. This is considerably higher than the FDIC's average 5 year CD rate which is at 0.82 percent for the week ending January 14, 2013. In fact, we have many banks offering 5 year CD rates on our rate list that are higher than the FDIC average rate.

2 year CD interest rates in the FDIC average this week are at 0.38 percent while the highest 2 year rates are almost three times as much at 1.19 percent. The lone bank offering a rate of 1.19 percent with an APY of 1.20 percent on our rate list is CIT Bank. AbleBanking is second on our list at 1.18 percent with an APY of 1.19 percent.

The top 3 year CD rates on our rate list this week are from Virtual Bank at 1.30 percent with an APY of 1.31 percent. The second best 3 year rate on our list this week is at 1.29 percent with an APY of 1.30 percent. CIT Bank, Discover Bank and Barclays Bank are all offering that rate on yield on our list right now which is higher than the current FDIC average 3 year rate at 0.51 percent.

Average 4 year CD rates in the FDIC survey this week are at 0.64 percent. The highest 4 year CD rates on our rate list are from Nationwide Bank at 1.55 percent with an APY of 1.56 percent. The second best rate on our list is from ablebanking at 1.54 percent with an APY of 1.55 percent.

Feel free to search and compare the best certificate of deposit rates for all types of CD terms on our lists. We list the top national CD rates and the top regional CD rates to make sure you find the best top CD rates.
Author: James Martin
January 16th, 2013