CD interest rates moved higher in mid August along with most long term interest rates, which spiked significantly more than bank CD rates.  Bank rates have been heading higher after the Fed indicated that the monetary stimulus program that has been keeping interest rates low may be slowly cut back before year’s end.  The first indication of a pullback in the stimulus program was announced on May 22, 20913 and the market reacted with generally higher interest rates and slight pull backs taking place occasionally. 

This past Thursday, the market received solid employment data with the strong weekly unemployment claims.  A strong number in unemployment claims means fewer individuals filing for unemployment insurance which should lead to a higher employment rate and lower unemployment rate.  The Fed has made it clear that the current monetary stimulus program is heavily dependent on the continued progress in the employment situation and this week’s data point on initial insurance claims would appear to solidify the position that the jobs market is improving and the Fed will cut back on the stimulus program soon.

Overall, CD rates for the week ending August 16, 2013 improved modestly with the brunt of the increases taking place among the longer term maturities.  The SelectCDrates.com CD rate index moved up by less than one basis point on the week, closing at 1.017 percent.  The CD rate index measures the top ten highest bank CD rates available nationally for three month term CDs, six month CDs, one year CDs, two year CDs and five year term CDs.

Five year maturities made the biggest gain over the course of the week.  The average yield on the top ten highest five year CDs moved up to 1.817 percent.  Three banks are now offering five year CD rates at 2.00 percent or higher.  iGOBanking has the top interest rate with a five year CD at 2.05 percent.  State Bank of India and SalemFiveDirect both promote five year terms right at 2.00 percent to follow the CD rate leader.

Two year CD rates made a sizeable advance for the week with the average interest rate for this CD term moving up to 1.1325 percent.  The SalemFiveDirect CD with a two year term leads the top banks with a yield of 1.25 percent.  The CIT Bank CD rate is the second highest rate available at 1.20 percent which is followed by a few banks that offer two year CD rates at 1.15 percent including Nationwide Bank, GE Capital Bank, and Bank5 Connect.

The top one year CD rates continue to be holding just shy of one percent.  The average rate found on the top ten best one year CD rates held this week at 0.997 percent.  GE Capital Bank and Dollar Savings Direct share the top spot in the one year maturity category with CD rates at 1.05 percent.  More than a few banks have CD rates that share the second highest return at 1.00 percent.

There was very little change in the short term CD rates with the three month rates and six month CD rates remaining virtually unchanged this week.  The average interest rate on the top ten highest six month certificates came in at 0.722 percent while the rate on the shorter, three month CDs was 0.412 percent.  Bank5 Connect has the best six month rate at 0.90 percent and UmbrellaBank.com has the top slot for three month CDs at 0.51 percent.

A list of the best CD rates available across the nation for the week ending August 16, 2013 is available to help consumers shop and compare the highest CD rates by maturity and can be found at following CD rate tables: three month CD ratessix month CD ratesnine month CD rates, one year CD rates, two year CD rates, three year CD rates, four year CD rates and five year CD rates.

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