The CD interest rate curve on average 1 year and average 5 year CD rates is minimal. The rate difference between the highest 1 year CD rates and the highest 5 year CD rates is also minimal.

Right now 1 year CD rates are averaging 0.69 percent while 5 year CD rates are only averaging 1.38 percent, only a 69 basis points or 0.69 percent difference.

The CD rate curve is a little steeper on the FDIC’s national average rates. The FDIC’s national average 1 year CD rate is at 0.29 percent and 5 year rates are averaging 1.09 percent, an 80 basis points or .80 percent difference.

A flat rate curve makes finding decent 5 year CD rates harder. Thankfully there are some banks offering 5 year CD rates higher than the averages. Not much higher but higher none the less.

Here is our list of banks offering the best 5 year CD rates:

1. Intervest National Bank 5 Year CD Rate 1.75% APY 1.77%
2. Barclays Bank 5 Year CD Rate 1.73% APY 1.75%
3. Discover Bank  5 Year CD Rate 1.73% APY 1.75%
4. Third Federal S&L  5 Year CD Rate 1.73% APY 1.75%
5. First Internet Bank of Indiana 5 year CD Rate 1.69% APY 1.70%
6. Ally Bank 5 Year CD Rate 1.68% APY 1.69%
7. USAA 5 Year CD Rate 1.65% APY 1.66%
8. Metropolitan National Bank 5 Year CD Rate 1.64% APY 1.65%
9. EverBank  5 Year CD Rate 1.64% APY 1.65%
10. Colorado FSB  5 Year CD Rate 1.64% APY 1.65%

The highest 5 year CD rates listed above are not much higher than the highest 1 year CD rates these days. For example, CIT Bank is offering 1 year CD rates at 1.09% with an APY of 1.10%. Only 0.66 percent lower than the highest 5 year rate.

Interest rates probably won’t be declining much lower then they already are. Don’t expect rates to move much higher either. That being said if you want to lock in a 5 year rate you’ll obviously do better rate wise then locking in a 1 year rate.

The Federal Open Market Committee (FOMC) released the minutes of their April 24-25 meeting, expanding what was said in the statement of economic policy released just after the April meeting.

The Fed’s current policy of keeping rates near zero percent until 2014 was reiterated which isn’t a surprise. Low rates of resource utilization, a subdued outlook for inflation and elevated unemployment are the reasons why rates have been near zero percent and will stay low until late 2014.

The Fed has many critics when it comes to the current policy on interest rates. Many Republicans feel the Fed’s policy is fanning future inflation which hasn’t been the case so far. Low interest rates and quantitative easing (QE) has helped the economy recover from the worst recession since the depression of the 1930′s while higher inflation hasn’t materialized, not yet anyway.

Some of the biggest losers of the Fed’s policy have been retirees who rely on interest income. As one nears retirement the general idea is to have most of your assets in safer investments. Of course some of the safest investments are in certificates of deposit and savings accounts.

Unfortunately the Fed’s policy has forced deposit rates to record lows. 1 year CD rates are averaging 0.75% and savings rates are averaging 0.53%. The FDIC’s national average rates are even lower. Average 1 year CD rates are at 0.29% and the national average savings account rate is at .10%.

These rates are average rates and you can find rates a little higher than the averages, or considerably higher than the FDIC’s national average rates. CIT Bank has one of the highest 1 year CD rates around. CIT Bank’s current 1 year interest rate is 1.09% with an APY of 1.10%. The bank’s rate is 0.34% higher than the average and 0.80% higher than the FDIC’s average CD rate. 

CIT Bank’s savings rate is currently at 1.04% with an APY of 1.05%. The bank’s savings rate is 0.51% higher than the average savings rate and more than 10 times higher than the FDIC’s national average rate.

There are a few other banks offering rates above the averages. Ally Bank is offering a 1 year bank CD rate at 1.04% and a savings rate of 0.84%. You can search our rate tables for other banks and credit unions offering rates above the averages.

Besides CDs and savings accounts the only other investment that has very little risk is U.S. Treasuries. Unfortunately Treasury yields are even lower then deposit rates. In fact when you compare similar term Treasury yields and CD rates, the latter is considerably higher.

For example, you can get a 1 year CD rate as high as 1.10%. Current 1 year Treasury yields are at 0.19%. Going out further on the yield curve, 5 year Treasury yields are currently at 0.84% while the best rates on 5 year CDs are at 1.69% (APY 1.80%) at Third Federal Savings and Loan.

A rare thing has happened, a bank actually raised their deposit rates. In an environment of ever decreasing rates it’s nice to see one bank, CIT Bank, raise both their CD rates and savings account rates. CIT Bank CD rates had already been some of the best CD rates around for a 12 month CD.

The increase in rates wasn’t significant but what can you expect when the Fed has been holding the Fed Fund’s rate in a targeted range of zero percent to one quarter percent for several years now.

The bank’s 12 month Achiever CD rate went from 1.07% (1.08% APY) to 1.09% (1.10% APY). The 24 month Achiever CD rate was raised to 1.24% (1.25% APY) from 1.19% (1.20% APY). CIT Bank’s Achiever CDs have a minimum opening deposit of $25,000.

CIT Bank’s savings account rate was also increased. The savings rate had the biggest increase of 15 basis points to 1.05% APY, up from 0.90% APY on account balances of $25,000 or more. Savings account balances of less than 25k saw an increase to 0.90% APY from 0.85% APY.

Here is a current listing of CIT Bank CD rates and Savings Rates:

Achiever CD (minimum $25,000 deposit)

• 1 Year CD 1.10 APY
• 2 Year CD 1.25% APY

Jumbo CD (minimum $100,000 deposit)

• 2 Year CD 1.25% APY
• 3 Year CD 1.44% APY

Term CD (minimum $1,000 deposit)

• 6 Month CD 0.45% APY
• 1 Year CD 1.06% APY
• 2 Year CD 1.20% APY
• 3 Year CD 1.42% APY

CIT Savings Rate

• 0.90% APY (minimum to open)
• 1.05% APY ($25,000 to open)

All deposit accounts at CIT Bank are insured by the FDIC for up to $250,000. CIT Bank shouldn’t be confused with Citibank. For more information about CIT Bank’s deposit products and to open an account go to bankoncit.com.

Recent lackluster economic news is putting downward pressure on interest rates. Another weak jobs report last week along with a weaker than expected 1st quarter GDP report combined with worries about Europe’s financial troubles has forced 10 year bond yields below 1.90%. All this negative news will keep downward pressure on deposit rates and current mortgage rates.

The highest CD rates are not that high and won’t be heading higher anytime in the next year. Right now on our 12 month CD rate table the best 1 year CD interest rate is from Doral Bank at 1.14% with an APY of 1.15%. A rate just above 1.00% doesn’t sound that great but it’s higher than the FDIC’s 1 year national average rate of 0.29%. 

CIT Bank is another bank offering 1 year rates considerably higher than the FDIC’s national average. CIT Bank’s current 1 year rate is at 1.07% with an APY of 1.08%. Both these rates are also above the FDIC’s national rate cap of 1.04%.

The FDIC’s rate cap is determined by adding 75 basis points to the national rate. Financial institutions are subjected to interest rate restrictions under Part 337.6 of the FDIC Rules and Regulations. Basically the rates they offer have to stay within 75 basis points of the national average rate.

AloStar Bank of Commerce is on our list with a current 1 year rate of 1.05% with an APY of 1.06%. MetLife Bank and Colorado Federal Savings Bank are tied with the fourth highest rate on our list at 1.04% with an APY of 1.05%.

Ally Bank and EH National Bank round out the top 5 1 year rates. Both Ally Bank’s 1 year rate and EH National Bank’s 1 year rate is at 1.03% with an APY of 1.04%.

Metropolitan National Bank has the sixth best rate at 0.95% with an APY of 0.95%. Rounding out the top 10 banks on our list include Barclays Bank, Discover Bank, E-Loan and First Internet Bank of Indiana all offering a 1 year rate and APY of 0.90%.

Doral Bank Direct, the online banking division of Doral Bank, has the highest CD rate on our list of 12 month certificate of deposit rates. Current CD rates on 1 year CDs at Doral Bank Direct are at 1.14% with an APY of 1.15%.  Doral Bank Direct’s 12 month rate is considerably higher than the current national average rate of 0.78%.

Getting a really good rate on a short term CD is a plus since you’re better off sticking with shorter term CDs right now. The yield curve between short term CDs and long term CDs is flat so going long doesn’t make sense.

To give you an idea of how flat the yield curve is, Doral Bank Direct is offering 18 month and 2 year CDs at 1.14%, the same rate as the 12 month rate.  Some banks are offering longer term CD rates that are on par or even below their shorter term rates.

Doral Bank Direct’s longer term CDs are slightly above the 1 year rate. 3 year, 4 year and 5 year CD rates are all currently at 1.49% with an APY of 1.50%, just 35 basis points above the 1 year rate.

Doral Bank Direct is competitive with their shorter term CDs. Current CD rates on 6 month and 9 month CDs are at 0.75%. That rate is one of the best CD rates around for 6 month CDs and slightly higher than Ally Bank’s 6 month CD rate of 0.74%.

Doral seems to consistently offer some of the highest short term CD rates around. Back in May of last year we reported that Doral Bank Direct CD rates on 12 month CDs were at 1.39% with an APY of 1.40%. At the time the national average rate as reported by Monitor Bank Rates was only at 0.572%.

A year ago the bank was offering 6 month and 9 month rates at 0.75%, the same rate as today. It’s good to see a bank hold CD rates steady these days considering how most banks have been dropping rates the past several years.

The minimum opening deposit for a CD account at Doral Bank is $1,000. You can easily open an account online or print out an application and mail it in.