Certificate of Deposit Interest Rates April 12, 2010

Certificate of deposit rates were down for the week ending April 9, 2010 across all maturities according to the most recent CD rate survey performed by SelectCDrates.com. 

National CD rates were lower for all of the terms measured in the survey though the short term, 6 month CD rates, were down by only a very modest amount.  The average of the best six month CD rates was down by just one basis point or 1/100 of a percent for the week.  The average yield on the top ten best six month CD rates stepped down to 1.27% from 1.28% in the prior week.  The highest six month CD rate available was unchanged at 1.31%.

The national CD rate average for the one year term bank CDs fell by three basis points.  The average yield for the top ten best one year CD rates landed at 1.61% at week end, down from last week’s average yield of 1.64%.  The highest one year CD rate continues to hold on at 1.90%.

The two year CDs took the largest hit for the week.  The average rate for the best two year CD rate available nationally was down by five basis points bringing the yield to 2.03% from the previous week’s rate of 2.08%.  The best two year CD rate this week is also unaltered with an interest rate of 2.15%.

The top ten five year CD rates were down almost as much as the two year certificates.  The average rate on the five year bank CDs was lower by four basis points pushing the average yield from 3.20% last week to 3.16% for the current week.  The best five year CD rate was down measurably dropping from 3.44% to 3.30% on the week.

Expectations have been for rising CD rates this year but the exact opposite has occurred.  As Treasury rates rose through March and the first week of April, the expectations for rising bank rates became more wide spread only to see bank rates move modestly lower. As the month of April has unfolded further, Treasury rates have begun to give back some of their gains in yield.  The 10 year Treasury bond hit 4.01% on April 5th and closed at 3.87% on April 9th.  Similarly, the one year Treasury reached 0.49% on the 6th and dropped a few basis points to 0.46% on the 9th. 

The mild expansion in the economy is not likely to be the driving force behind higher bank rates; the key will be the government debt load and the interest rates that will need to be offered on the upcoming Treasury auctions to sell the large volume of Treasury securities.

Keep an eye on the CD interest rate averages and the Treasury market for signals on the future direction of interest rates.

Tags: bank CDs, bank rates, CD interest rates, CD rates, certificate of deposit rates, five year CD rates, national CD rate, one year CD rates, rates, six month CD rate, treasury rates, two year CD rate

This entry was posted on Wednesday, April 14th, 2010 at 10:41 am and is filed under CD Rate Updates. 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.