Yields on long term bank certificates of deposit continued to slump lower albeit, at a moderate rate.  The average rate on the best five year CD rates available nationally moved down by one basis point or 1/100 of a percent for the week ending January 22, 2010.  The average rate on a five year term CD ended the week at 3.27% down from the prior week’s average of 3.28%.

The highest five year CD rate remained unchanged from the previous week.  The best five year CD rate held at 3.40% and is available at Atlantic Coast Bank.  The second best five year CD rate available nationally comes from two separate banks.  Both, Acacia Federal Savings Bank and One West Bank, offer five CDs that yield 3.30%. 

UFB Direct follows this duo with a five year certificate at 3.26%.  Only one basis pint lower, three banks offer five year CDs with a rate of 3.25%.  Dime Direct, Capital One Bank and Discover Bank promote five year CDs with interest rates at 3.25%. 

Another one basis point lower is the five year CD from State Bank of India with an interest rate of 3.24%.  The remaining two banks on the list are EverBank and Intervest National Bank.  EverBank offers a five year certificate at 3.23% while Intervest National Bank is at 3.22% on their five year CD. 

Changes on the list of the top ten best five year CD rates from the previous week were relatively mild.  One bank had reduced their rate but remained on the list while one bank, EverBank, actually increased their five year term CD rate from the previous week taking the ninth spot this week and pushing National Bank of Kansas City off the list even though National Bank of Kansas City continues to offer a 3.22% five year CD.

As investors continue to purchase safe investments such as bank CDs, yields have been consistently declining as banks have amassed adequate funds for loan activities and interest rate competition for safe and secure rates of return are few and far between.  The prospect of immediate improvement in rates looks pretty slim as economic news continues to show weak growth and banks have no need to compete vigorously to acquire depositor funds.  Comparing rates carefully among the various classes of safe and secure investments before investing is the best course of action to assure obtaining the best rate of return.

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