As bank rates move higher going into the New Year, it is a good time for savers and investors to reevaluate their savings allocations and take a look at the best bank CD rates for 2014.

During the last quarter of 2013, the clear leader in the short term CD rate category is Bank5 Connect.   Bank5 Connect is an online only bank.  Bank5 Connect is the online banking division of BankFive, an FDIC insured bank based in Fall River, Massachusetts.  The bank has consistently offered CD rates that are among the top ten best for six month, one year and two year maturities.

Bank5 Connect is currently offering a six month CD that has an interest rate of 0.90%.  The present six month CD rate offered by the bank is more than seven times the national average rate for a six month certificate which currently stands at 0.12%.  The bank is also now offering the best CD rate on a two year term certificate with a yield of 1.25%.

As 2014 starts off in a rising interest rate environment, reaching for long term CDs may not be the best approach for consumers to obtain the highest yields.  While there are now plenty of banks offering five year CDs that are 2.00% or higher, if the trend of rising long term interest rates continues, these yields will soon appear low with higher rates cropping up over time.

With an eye toward rising rates, savers and investors may be better served steering clear of longer term maturities and holding short or midterm certificates.  The top 18 month CD rate comes in at 1.15%.  This rate is just ten basis points or .10% less than the top two year CD rate which is currently at 1.25% but has a six month longer term.  AloStar Bank of Commerce offers the highest 18 month CD at 1.15%. 

AloStar Bank of Commerce is frequently found promoting high yielding CD rates, often being reported among the top ten best CD rates in the short and midterm maturity range, including right now, when the bank is not only the leader in the 18 month term category but the leader for one year CD rates as well.  AloStar Bank of Commerce’s one year CD has an interest rate of 1.10% which is over five times the national average rate of 0.20%.

For those savers that want to go long term, EverBank has been frequently taking the top honors for the best long term CD rates.  To end 2013, EverBank had the highest five year CD rate at 2.16% as well as the best four year CD rate at 1.68%.  In a rising rate cycle, these CDs can work well for diversification purposes but be careful; when interest rates rise the opportunity cost for having money tied up for five years can be high.

The start of the New Year is great time to review your savings and investments to reallocate those accounts that are not among the top performers to earn a better rate of return.

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