With the stock market running scared and government debt issues here and abroad putting fear into the market, interest rates remained low last week.  Skittish markets generally drive funds into the Treasury market pushing Treasury rates lower which keeps a lid on the movement on most other interest rate sensitive assets in the U.S. which take their cue from the Treasury market.

Bank certificate of deposit rates were lower last week for most maturities with the exception of the five year term bank CD which remained unchanged.  The average rate on the top ten highest six month CD rates lost two basis points or 2/100 of a percent for the week.  The average rate for six month CD rates was down to 1.35% from 1.37% in the previous week.  The best six month CD rate available nationally took a bigger hit and shed five basis points, moving from 1.45% last week to 1.40% on February 5.

The best one year CD rates available nationally were also down by two basis points or 2/100 of a percent.  The average rate for the top ten highest one year CD rates closed the week at 1.75% down from 1.77% in the previous week.  The highest one year CD rate available nationally was unchanged for the week at 1.90%.

Two year CD rates suffered the same fate as the previous three terms with a loss in the average yield of two basis points.  The average rate on the top ten best two year bank CDs available nationally headed down to 2.16% from 2.18% at the prior weekly close.  The highest two year CD interest rate held steady with a yield of 2.30%.

Five year CD rates were given a reprieve this week from the downward momentum.  The average rate on the top ten best five year CD rates available nationally was unaltered at 3.30%.  The highest five year CD rate was also untouched as well week over week with an interest rate of 3.55%.

With the investment markets becoming increasingly nervous, the prospect of higher interest rates and bank rates continues to look dim.  Investors should continue to shop and compare the rates on all cash equivalent or riskless investment choices such as bank CDs, money market accounts and savings accounts to obtain the best yields available within a diversified portfolio.

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