Even though the GDP numbers released last week were stronger than expected, banks continued to trim interest rates further on certificates of deposit.  Financial institutions cut rates on three of the four CD terms measured in the weekly selectcdrates.com bank rate survey.  While yields moved lower for the short and midterm CDs, the long term CDs showed an increase in average yield for the week.
 
The average bank CD rate for the top ten best six month CD rates available nationally shed one basis point or 1/100 of a percent for the week.  The average yield has now moved down to 1.37% from 1.38% in the previous week.  The highest six month certificate rate held steady at 1.45%.

The average rate for the top one year certificates displayed a larger drop for the week.  The average rate for the top ten best one year bank CD rates shed four basis points on the week.  The average yield dropped down to 1.77% for the week ending January 29, 2010 off from last week’s average of 1.81%.  The highest rate available nationally on the one year term certificate also managed to hold its ground with an interest rate of 1.90%.

Two year certificates of deposit suffered the same fate as the six month and one year maturities and moved lower by two basis points.  The average yield for the top ten highest two year CDs stood at 2.18% down from the prior week’s average of 2.20%.  The highest two year CD rate is now at 2.30% down from 2.40%.

Five year CD rates ended the week with a measurable gain in yield.  The average interest rate paid on the top ten five year CDs was up by three basis points.  The average yield was pushed up to 3.30% this week from 3.27% in the preceding week.  The highest five year CD rate shot up 15 basis points.  Last week’s top five year CD rate was at 3.40%, this week the best offer is at 3.55%.

Even with lower yields, CD investing is a great way to take some of the risk out of a portfolio. Reducing risk is gaining increasing attention once again as concerns rise about the lack of economic growth, a possible drop off in economic growth or double dip and the almost incomprehensible U.S. budget deficit. 

To find the best CD rates for your short term savings or long term investing needs, including IRA CDs, compare the national rates with the CD interest rates in your state.  It’s also beneficial to stay abreast at what the general economic view is on the future direction of interest rates.  Staying abreast of the Federal Reserve FOMC comments and Treasury rate activity can be a great foundation for the outlook of interest rates.

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