The best national CD rates stayed within a tight range for the week ending April 24, 2009.  The short term rates increased slightly, with the six month term CD rates bumping up two basis points while the one year CD rates dropped by two basis points, a basis point is 1/100 of a percent.  Mid term certificates of deposit barely budged with the average on national two year CD rates dropping by one basis point.  The long end of the CD yield curve stayed constant as the average five year CD rate did not change at 3.51%. 

This week saw the closure of four more banks by the FDIC and the end of the “Stress Test” for 19 of the nation’s larger banks.  The identity of the 19 banks is unknown as is the parameters for the test or the tests outcome.  The loss of competition by bank closures and the regulatory pressure on the 19 test victims would likely keep downward pressure on the highest CD rates as weaker banks have a tendency to offer higher CD rates.  Pressure in the opposite direction that would cause an increase in rates could be seen in the increase in the 10 year Treasury bond yield as well as the increase in rates on Treasury inflation indexed bonds or TIPs.  Both forces on CD rates were relatively weak; hence there was little activity in the direction of the best CD rates on the national level.  The action for the best CD rates remains locally.  The best CD rates in most states exceed that offered on the national level.

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