The second full week of August was a rough week for mortgage rates but somewhat rewarding for CD investors.  Interest rates rose substantially for long term interest earning accounts such as mortgages and Treasury securities that have maturities in the five to ten year range.  The rise in interest rates pushed mortgage costs to their highest level over the past few years and to a lesser extent, pushed yields higher on long term bank CD accounts.

Treasury bonds and mortgage backed securities sold off heavily following the news on Thursday that weekly unemployment claims fell to the lowest level since 2007.  The unemployment claims number was just one more data point indicating the US economy is continuing to improve and gave more credence to the belief that the Fed will be inclined to start cutting back on buying U.S. bonds and mortgage bonds as Federal Reserve Chairman Ben Bernanke indicated on May 22 of this year.

Mortgage rates were lifted by over 15 basis points on the week with most of the rise occurring during the last two days of the week.  One basis point is equivalent to 1/100th of a percent or .01 percent.  The average 30 year mortgage rate at the top ten bank mortgage lenders increased to 4.697% based on the current bank rate survey conducted by  30 year jumbo mortgages and FHA mortgages were close behind rising to 4.608% and 4.463%, respectively. 

The increase in mortgage rates was eclipsed by the rise in long term Treasury notes and bonds.  The five year Treasury note was up by a noteworthy 24 basis points on the week, ending the week with a yield of 1.60%.  The ten year Treasury bond jumped by a touch more, rising 27 basis points to close at 2.84%. 

Short term securities were not impacted by nearly as much as the long term fixed income investments.  Six month Treasury bill rates were higher by just one basis point on the week which brought the interest rate up to 0.08%.  One year Treasuries sprang up by just two basis points to 0.13%.  The two year Treasury note experienced a four basis points rise, bringing the yield up to 0.36%.  The five year and ten year yields are now at the highest points seen in 2013 while the shorter term instruments are still below the highs of the year.

CD rates displayed similar lopsided increases in rates that were seen in the Treasury market.  Short term CD rates were little changed while long term CD interest rates leapt upward.  The CD rate index climbed up to 1.017% by the close of the week.  The CD rate index measures the top ten best CD rates on the three month term CDs, six month term CDs, one year CDs, two year and five year bank CDs.  The index was driven higher by increases in five year term certificates which now average 1.817% and two year maturities which come with an average yield of 1.135%.

Money market accounts and savings accounts were little changed over the course of the week, reflecting the minor rate changes that were seen on the short end of the yield curve.  The average interest rate found on the top ten highest savings account and money market accounts came in at 0.893%, a slight decrease in the average yield from the prior week.

Credit card rates held their ground this week after experiencing some negligible rate fluctuations earlier in the month.  The average credit card interest rate promoted by the largest credit card companies across all credit card categories remained at 13.79%.

The weekly bank rate survey provides a detailed report on bank savings rates and lending rates by consumer rate category.  The most current survey is for the week ending August 16, 2013.  The weekly rate survey presented the following interest rates and their changes for mortgage rates, CD interest rates, credit card rates, money market rates, savings account rates and Treasury rates.

Bank Rates Market Recap for August 16, 2013

CD interest rates:
Composite CD interest rate index 1.017 percent
3 month CD rates 0.412 percent
6 month CD rates 0.722 percent
1 year CD rates 0.997 percent
2 year CD rates 1.135 percent
5 year CD rates 1.817 percent

Money market and savings account rates:
Bank money market rates and savings account rates 0.893 percent

Mortgage rates:
30 year mortgage rates 4.697 percent
15 year mortgage rates 3.764 percent
20 year mortgage rates 4.614 percent
30 year jumbo mortgage rates 4.608 percent
30 year FHA mortgage rates 4.463 percent

Credit card rates:
Credit card rates for new credit card offers 13.79 percent (unchanged)

US Treasury rates:
Six month Treasury rate 0.08 percent (up .01 percent) 
One year Treasury rate 0.13 percent (up .02 percent)
Two year Treasury rate 0.36 percent (up .04 percent)
Five year Treasury rate 1.60 percent (up .24 percent)
Ten year Treasury rate 2.84 percent (up .27 percent)

All bank savings rates and lending rates are based on surveys conducted by at the close of August 16, 2013 with all of the interest rates obtained directly from the banks within the survey.  Treasury rates are obtained directly from the Department of the Treasury.  

For more detailed interest rate data on mortgage rates, CD rates, credit card rates and savings account rates for the week ending August 16, 2013 please see: 3 month CD rates, 6 month CD rates, 9 month CD rates, 1 year CD rates, 2 year CD rates, 4 year CD rates, 5 year CD rates, 30 year mortgage rates, 15 year mortgage rates, FHA mortgage rates, 20 year mortgage rates, 10 year mortgage rates, jumbo mortgage rates, best interest checking accounts and best credit card rates.

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