CD rates at banks have shown no sign of finding bottom. The average rate for the best six month CD rates has dipped down to 1.17% for the week ending August 20, 2010. The average bank CD interest rate on the 1 year has dropped to 1.49% while the two year is under 2.0%, settling at 1.87% on Friday.

Of course CD rates at banks are not the only rates scraping bottom. Bank mortgage rates have fallen to record lows and continue to march lower. The 30 year mortgage rate compiled in the compare mortgage rates survey indicated that the mortgage rate from the top ten bank mortgage lenders is now at 4.613%. Treasury rates, meanwhile, have fallen to the point that many financial pundits are calling the funds flow into Treasuries, which is driving the Treasury rates lower, a bubble. The one year Treasury rates started this week with a yield of 0.26% while the ten year Treasury rate was a mere 2.60% Monday morning.

Now for the opportunities. Note, that the one year Treasury rate is at 0.26% with oodles of money flowing into these investment securities. NewDominion Direct and Flagstar Bank are both offering CD interest rates at 1.25%, not on a one year term but on a six month term CD. Why buy a one year Treasury, yielding just 0.26%, when a shorter term bank CD pays almost five times that figure.

For local bank CD rates there are even more opportunities. Union County Savings Bank in NJ offers a NJ CD rate of 1.40% on a six month term. In Florida, First Florida Bank and USAmeriBank offer one year CD rates in FL at 1.75%, well above the comparable term Treasury rates. For California CD rates, there are four banks offering an interest rate of 1.25% or greater for a six month term; FirstChoice Bank, Pacific Alliance Bank, American Plus Bank and TomatoBank.

More opportunities exist on longer term CDs. Some regions have bank CD rates that are well above Treasuries and the national CD rates while other regions have less rate competition and the best national CD rates provide the highest available rate of return. Indiana is one region where the local Indiana CD rates are almost always eclipsed by the best national CD rates. Arizona CD rates are also often solidly beat by the best national CD rates. But this is not the case for California CD rates, Florida CD rates, Texas CD rates, NY CD rates and other regions. The moral of the story is check the best national CD rates first and then review the best state CD rates.

While CD rates are low, don’t run into Treasuries with even lower yields. Stay diversified and compare the available market opportunities before taking the quick path that may lead to lower yields. The difference between the average CD rates at banks and the best CD rates is considerable, the local bank branch may not be the best place to open or renew a certificate of deposit.

For more information on best CD rates by term refer to the following pages; 6 month CD rates, 1 year CD rates, 2 year CD rates and 5 year CD rates. For more information on the compare mortgage rates survey on 30 bank mortgage rates refer to the compare mortgage rates page. For state CD rates refer to the pages identified by state such as CD rates California, CD rates New Jersey, CD rates New York, CD rates Florida, CD rates Washington, CD rates Illinois, CD rates Virginia and more.

Tags: , , , , , , , , , , , , , , ,

No user commented in " CD Rates at Banks Continue to Fall but Opportunities Remain "

Follow-up comment rss or Leave a Trackback

Leave A Reply

 Username (*required)

 Email Address (*private)

 Website (*optional)