The best five year certificate of deposit rates bucked the downtrend of lower CD rates for the week with the average of the top ten best five year CD rates increasing slightly.  The average for the five year CD rates available nationally increased two basis points or 2/100 to 3.61% from 3.59% at the end of the previous week.  Bond investors may finally be showing some concern over federal budget uncertainties and the large supply of Treasuries coming to the market.  The yield on the ten US Treasury bond rose 31 basis points for the week jumping from 3.14% to 3.45%.  In order to remain competitive with other long term interest bearing investment products such as Treasuries, bank CD rates were sure to rise in this environment.

The highest five year CD rate is now being marketed by Acacia Federal Savings Bank with an interest rate of 3.75%.  This rate is five basis points higher than last week’s leaders, Discover Bank and State Bank of India.  Both Discover and State Bank of India continued to promote the same CD rates but now have the second best rates with five year CDs yielding 3.70%.  Just below this rate is the five year CD of Intervest National Bank with an interest rate of 3.66% also unchanged for the week.  While the highest five year CD rate increased, the lowest rate on the list was unaltered.  The lowest bank rate remains at 3.50% in the five year term and is offered by more than one bank including Ally Bank, National Bank of Kansas City and iGoBanking.

Even with the increase in the best national rates with a five year term, it is important to shop and compare the best state CD rates available.  Though the trend of higher state and local CD rates over the national rates has waned recently, many local and regional bank CD rates still exceed those available nationally.

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