Interest rates moved higher during the first week of February on the heels of a stronger than expected monthly jobs report.  The rise in rates however, did not carry over to bank savings products and the top CD rates in the nation lost ground this past week. 

Declining yields were not displayed in all terms or maturities.  Most CD accounts either gained yield or showed no change, the drop in the average yield entirely stemmed from the drop in rates on the top five year certificate accounts.

The average rate on the top yielding bank CDs, measured by the CD rate index, dipped by 6/1000ths of a percent for the week.  The average rate moved down to 1.164 percent after reaching 1.170 percent in the prior week.  The index measures the top ten highest CD rates available nationwide on three month term CDs, six month CDs, one year CDs, two year CDs, and five years CDs. 

Even with the mild reduction in rates, the best CD rates available are well above the national average rate found on bank certificates.  The national average rate on comparable term accounts is just 0.306 percent.

Big rate changes were seen in the longer maturities.  The average five year rate on the top ten highest five year certificates dropped from 2.195 percent to 2.155 percent.  That’s a four basis point reduction which is not seen terribly frequently on week to week changes.  One basis is equal to 1/100th of a percent or 0.01 percent.

Two year accounts saw a small, fractional run up on the week.  The average rate for the top two year bank CDs was nudged up to1.309 percent from 1.308 percent in the week earlier.  One year CD rates gained almost one full basis point which put the average rate of return at 1.150 percent compared to 1.141 percent in the previous week.

Six month rates were lifted by just 3/1000ths of a percent.  The average interest rate for the highest six month certificates closed the week at 0.782 percent compared to 0.779 percent in the prior week’s rate survey.

Short term, three month CD rates, displayed no change week over week.  The average rate found on the top ten best three month certificates remained at 0.426 percent.

A divergence between bank savings rates and other interest bearing financial instruments such as Treasury notes and bonds is not uncommon when there are quick and dramatic changes to interest rates.  The big jobs gains reported on Friday caused just such an occurrence with interest rates on Treasuries and mortgages leaping higher while stickier rate sensitive products such as bank CDs showed little reaction.

Investors and savers don’t have to settle for less when investing their money.  By comparing the top CDs across the nation, rate shoppers can get the best rate of return that matches their savings or investing time horizon.

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