With bank certificate of deposit rates hovering at their lowest level in a year and the financial pundits talking of an economic recovery, it is hard to see how CD rate can move much lower.  Today’s CD rates may come as an unpleasant surprise to those that accept this wisdom and think the bottom had arrived.

Bank certificate of deposit rates have in fact not let up in their gradual decline that started in early 2009.  The first week of January for the New Year saw yet another rate reduction across all bank CD rate maturities. 

The best six month CD rates available nationally fell to an average yield of 1.47%.  The highest six month CD rate now tops out at 1.51% and can be found at both, Ascencia bank as well as the State Bank of India.

The average rate for the best one year CD rates comes in at 1.88%.  The highest one year CD rate available nationally is the product of Colorado Federal Savings Bank and has an interest rate of 2.00%.

The average rate of the top ten best two year CD rates has fallen to 2.24%.  Atlantic Coast National Bank leads the two year term category with a CD interest rate set at 2.40%.

The five year term bank CDs have fared slightly better, losing the least amount of yield for week.  The average of the top ten highest five year CD rates average nationally was pushed lower to 3.28%.  The highest rate in this term comes from Acacia Federal Savings Bank which offers a five year CD rate of 3.40%. 

While the best strategy for bank CD investing during a low rate environment and a changing economic cycle may be to hold steady and see if and when interest rates move ahead, a low interest rate environment is not necessarily a time to postpone CD investments.

Investors should always remain diversified and this holds true for bank CDs as well.  CD investors should spread out the maturities on CDs held and even employ a ladder or barbell approach to these investments to stay diversified and be prepared for any future rate increases.  In addition, different banks will adjust their CD rate promotions to changes in the market.  While the national average rates may be low, many state bank CD rates are eclipsing the national rates by significant figures. 

For the best rate of return on bank CD investments, check the national bank rates first and then compare these rates to those available in your local market by viewing the state tables in the enclosed pages.  Compare the spread among the different maturities to capitalize on any opportunities available by altering the term of your CD investment.

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