Another week passes and bank CDs experience another of week of sinking yields.  Bank CD rates available nationally fell across all terms for the week ending Aug. 7, 2009.  The rate reduction for this week was mild but impacted all maturities and is a continuation of a protracted slide in CD rates that started in early part of 2009.

Six month CD rates were lower by one basis point or 1/100 of a percentage to close the week at 1.76%.  One year CD rates fell by an equally amount, weakening by one basis point, ending the week with an average yield of 2.07%.  Two year CD rates followed suit, declining one basis point week over week to settle at 2.35%.  The five year CD rate average had a slightly larger bite taken out of the interest rate earned.  The national average for the best five year CD rates stood at 3.38%, down three basis points for the week.
While CD rates fell for all maturities, Treasury rates moved in the opposite direction, rising higher for all maturities.  The 6 month Treasury bill was up four basis points to 0.30% for the week.  The one year Treasury rose by four basis points as well to close out the week at 0.52%.  The five year Treasury was up by a whopping 31 basis points while the ten year leaped up 37 basis points.  The five year closed at 2.84% and the ten closed at 3.89%.  The move in Treasury rates appears slightly more dramatic week over week since last Friday, July 31 Treasuries had dipped down accentuating the change when looking at the magnitude of difference in rates Friday to Friday.

30 year mortgages as well as car loan rates more closely matched the direction of CD rates as opposed to Treasuries, dipping slightly lower for the week.  The Freddie Mac weekly mortgage survey indicated the average 30 year mortgage fell a relatively small, three basis points to end the week at 5.22%.  Car loan rates remained unaltered for the week with the average of the top car loan lenders offering four year auto loans at 5.35% according to the weekly survey produced by

The question of an extended low interest rate environment on bank rates remains a heated topic among economists.  Heavy government borrowing made many economists thump their chests earlier in the year, making the call for rising rates due to increased inflation brought on by the heavy government debt.  Now it appears the camp that had been arguing for an outlook of low inflation and low rates into the coming year is fighting back.  In this environment, the one sure fire tactic is to shop and compare national and local CD rates to uncover the best bank yields for your portfolio.

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