The highest CD rates offered nationally remained in a tight range for the week ending May 1, 2009.  The average of the longest term CD rates, the five year term, dropped by one basis point or 1/100 of a percent for the week.  The best two year CD rates increased on average by two basis points.  The top one year CD rates also increased by one basis point and the short term six month certificates of deposit were unchanged.  These figures measure the averages of the top bank CDs for each term; the bank rates offered within the top 10 best CD rates displayed significantly more volatility.

The CD rate changes were dwarfed by the rate changes in the Treasury market.  Ten year Treasuries rose by over 15 basis points for the week.  The five year Treasuries rose by half that amount or approximately 6 basis points and the one year Treasury hardly moved.  With the stock market coming off life support and a massive supply of Treasuries coming to that market it is hard to fathom how interest rates will not rise as the months go by.  Pressure on Treasuries of course means competition for bank rates and as Treasury rates rise certificate of deposit rates are sure to follow since the banks will need to raise CD rates to compete with higher interest rates on alternative investment vehicles.

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