Certificate of deposit rates were little changed overall for the last full week of September but, CD rates were not entirely without their drama. Midterm certificates, accounts with maturities of one and two years in length, moved up with a bit of gusto. The average rate on the top ten one year CDs and two year CDs were higher by one basis point or 0.01 percent on the week. The rate increase found on these account comes only a week after the Federal Reserve chose not to make a call for higher interest rates.
Rising CD rates are generally a good sign that economic activity is on the upswing. Competition among the top yielding accounts is an indication that these financial institutions are in need of additional funds to finance increased or new lending activities. Of course, there are times in the economic cycle when CD rates rise during times of weakness when banks are struggling financially and bank executives engage in crazy promotions to support risky ventures. However, U.S. economic growth is far from teetering on recession and some sectors of the economy are showing rather robust growth.
SelectCDrates.com surveys hundreds of banks every week to compile lists of the top ten best CD rates by maturity. Over the years there have been prolonged periods when the top CD rates are dominating by a handful of banks and financial institutions. Through most of 2015, the banks offering the highest CD rates have changed by less than 20 percent, with many of the same names rotating between position one and ten on the top ten lists. Week over week changes generally show just modest changes among the major banks on the lists.
This past week however, five banks increased their rates in the key midterm category, a surprising amount in a low rate environment. CD rate increases were doles out by Ally Bank, Discover Bank, CIT Bank, TAB Bank, and Colorado Federal. These rate increases help push the highest one year CD rates up to 1.242 percent from 1.232 in the previous week and the best two year CD rates to 1.410 percent from 1.400 in the prior week.
Not all maturities saw gains in yields in the latest bank rate survey. The best CD rates on short term accounts were unchanged and the average yield on the best long term accounts declined modestly. The best three month CD rates held with an average rate of 0.436 percent. Six month rates held at 0.845 percent. The long term, five year CDs, fell to 2.191 percent on the week.
More information on the banks and bank rates in the current survey can be found at the following top ten lists: three month CD rates, six month CD rates, nine month CD rates, one year CD rates, two year CD rates, three year CD rates, four year CD rates and five year CD rates.