Best CD Rates Keep Changing

CD rates continue to remain extraordinarily high during the fourth quarter.  Competition among banks has kept interest rates up for most of this year.  With the funds rate pushed down to a meager 1% and fruther economic weakness showing no sign of letting up, it would certainly not be surprising to see some declines in savings account and CD rates.  Major banks are still trying to increase the deposit base, internet banks continue to spur growth by competing almost solely on rate and regional banks are on the defense against giant banks coming into their regions an either stealing deposits base market share or buying up branches.

The bank industry turmoil has been driving some changes on the list of the best CD rate offers nationally and the best CD rates by state.  Big bank mergers and profit margin contraction have led to some banks reducing their high rate CD offers. The prospect of increased bank mergers is likely as is the impact of reduced margins brought about by higher costs of funds.  Fortunately, competition among banks in the immediate future banks is keeping up the momentum in which banks still aggressively looking for new money.  As the economy slows and more bad news come out of the business world, more banks will need to remain rate competitive and continue with high rate CD and savings rate offers.

The location of the highest rates may be change from one bank to another or from one state to another.  The highest rates may be in Illinois one week or be offered by an online bank the next.  The pressure on the banks to keep rates from falling is to be expected to continue and the rotation of bank names on the national list and state lists is also likely to continue.  The overall level of interest rates on CDs is still showing little change.

This entry was posted on Saturday, November 1st, 2008 at 3:34 pm and is filed under Money Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.