As the credit crisis continues, banks continue to either increase the rates being offered on certificates of deposit or maintaining the high CD rates already being marketed.  During this time of financial upheaval these interest rates are making certificates of deposit a very competitive location to store money for customers looking for safety with a good rate of return.

 

Some highlights of today’s rate include:

 

GMAC Bank is offering a one year CD at 4.36% and a five year CD at an interest rate of 5.15%.

 

Sovereign Bank has a promotion for a one year CD at 4.25% and a 9 month CD at 4.00%. 

 

Both Sovereign Bank and GMAC Bank have minimum deposits for these accounts of $500.00.

 

Equity Bank in Dallas, Texas offers a one year CD at 4.20% and a five year CD at a 5.00% interest rate with a minimum balance of $1,000.00.

 

City National Bank out of Newark, New Jersey has a five year CD at 5.00% with a minimum balance of $500.00

 

View our national or state tables to see a comprehensive list of the best CD rates.

 

During mid year, at the start of the peak in the banking crisis, there was measurable increase in rates being offered for long term CDs.  As the year has advanced along, there has been an increase in the number of banks offering high CD rates on the shorter term six month and twelve month certificates of deposit as well.  A notable change this week is the rotation of the top banks with the highest CD rates.

 

In addition to the high rates on a variety of term CDs, competing interest rates on safe and liquid products such as U.S. Treasury bills have dropped dramatically.  The allure of high rate CDs becomes larger and larger as this year progresses.  Higher CD rates have been on this path for most of 2008.  As the banking industry stays in a state of disarray the force to acquire and expand their deposit base will continue to keep CD rates above normal levels.   

 

You can still get a wide variety of CD terms with rates above 4% in all major marketsd.  I’m not sure how much longer that will last.  The Fed Funds cut and added bank capital may keep a cap on interest rates and start to bring some of the higher rates off the board.  The credit crunch has certainly been a force in keeping some yields on bank deposit accounts from dropping.  These interest rates give informed investors a first-rate return while waiting for the turmoil in the credit freeze and financial markets to improve.

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