CD interest rates made their biggest drop yet this year.  The stronger than expected employment figures have just not been strong enough to counter the impact of the Fed which has used monetary easing to keep short interest rates low and bank CD rates just keep moving lower. 

Based on the bank CD rate survey conducted by for the week ending February 10, 2012 CD interest rates dropped by 1.3 basis points as measured by the CD rate index.  One basis point is equal to 1/100th of a percent.  The drop in CD rates pushed the average rate in the CD rate index down to 1.065 percent from 1.078 percent in the previous CD rate survey.  The CD rate index measures the best top ten CD rates for three month term CDs, six month CDs, one year CDs, two year CDs and five year CDs.

The continued pressure of debt deal problems in Greece and the Fed’s intervention in the Treasury market is holding interest rates extremely low.  Greece and Europe remain stuck in neutral regarding the excessive debt in Greece and how to balance economic growth with spending cuts and an orderly forgiveness of at least some of the debt in Greece.  Blah, blah, blah.  Well, that turmoil brings buyers to the safety of U.S. securities bringing all domestic interest rates lower.  Of course, the Fed monetary policy goes a long way towards driving rates down as well.

Three months CD rates were the one maturity that was not affected by economic events and remained unaltered for the week.  The average rate for the top ten three month CDs stayed at 0.478 percent.  Virtual Bank continues to hold the top spot with a three month CD rate at 0.60 percent.  The Virtual Bank three month CD rate is followed by the Beal Bank three month CD rate and CD which both yield 0.51 percent.

Six month CD rates were reduced by exactly one basis point.  The average rate coming from the top ten highest six CD rates slipped to 0.764 percent from 0.774 percent in the previous week.  The highest six month CD rate is at AloStar Bank of Commerce with an interest rate of 0.85 percent.  The Virtual Bank six month CD and Colorado Bank CD with a six month term promote the second highest rates with yields at 0.80 percent.

The top one year CD rates displayed an increase in yield this week.  The average yield for this maturity moved up to 1.059 percent from 1.053 percent in the prior week.  The Doral Bank CD comes with the highest rate at 1.15 percent.  Beal Bank has a one year CD rate at 1.10 percent, the next best one year rate available nationally.  The third highest one year CD rate comes from CIT Bank with an interest rate of 1.08 percent.

Two year CD rates were cut back by 2.6 basis points which brought the average rate down to  1.189 percent from 1.215 percent ion the prior week’ rate survey.  A two year CD at CIT Bank is the best rate at 1.26 percent.  Virtual Bank’s CD with a yield of 1.21 percent runs close behind the top rate.  Nationwide Bank and Ultima Bank have two year CD rates at 1.20 percent providing the third highest rate.

The five year CD rates were hacked again this week as many of the top bank CDs in this maturity have just killed the yields they offer.  The average CD rate for the top ten best five year CDs is now at 1.837 percent, down from 1.868 percent last week.  State Bank of India continues to offer the best bank rate with a by mail CD application and a rate of 2.02 percent.  The next best rate falls back seven basis points at 1.95 percent and is available at OnBank.  The National Republic Bank Chicago has a five year CD rate at 1.87 percent which is the third highest CD rate available nationally.

To find more information on the highest CD rates by maturity for the February 13, 2012 CD rate survey please see the following CD rate tables at three month CD ratessix month CD ratesone year CD rates, two year CD rates and five year CD rates.

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