Best CD Rates

Several banks and credit unions increased CD rates this week and as a result, the best 12 month CD rates are now at 2.50 percent, a multi-year high. The last time 1 year CD rates were in the 2.50 percent range, was during the financial crisis in 2008/2009.

When the financial crisis hit and caused the Great Recession, the Federal Reserve lowered the fed funds rate to nearly zero percent. This caused deposit rates to plummet to all-time lows the following four years. The best 12 month CD rates were actually under 1.00 percent at the low point in 2013.

National average rates were even worse because of big brick and mortar banks were offering extremely low rates. At the lowest point during early 2013, MonitorBankRates.com reported 12 month CD rates averaged 0.68 percent. The FDIC’s weekly national average rates were even lower, averaging a low of 0.20 percent.

Thankfully, those extremely low rates are a thing of the past and the trend for rates is higher due to a higher fed funds rate. The Fed has increased the fed funds rate seven times for a total increase of 1.75 percent to 2.00 percent, which is where the current rate is.

The Fed is also widely expected to increase the rate two more times this year because of strong economic growth. Two more increases would put the rate around 2.50 percent. The last time the rate was that high was back in early 2008, more than a decade ago. You can see a history of fed funds rate changes the past fifteen years at Fed Funds Rate History.

If there are two more rate increases by the Fed this year, deposit rates will move higher from the current level. 1 year CD rates will probably hit 3.00 percent by the end of 2018.

Best 12 Month CD Rates This Week

• ableBanking 2.50%
• Connexus Credit Union 2.50%
• iGObanking 2.35%
• BankPurely 2.35%
• Banesco USA 2.35%
• TIAA Bank 2.35%
• My eBanc 2.35%
• VirtualBank 2.35%
• M.Y. Safra Bank, FSB 2.34%
• TAB Bank 2.33%
• First Internet Bank of Indiana 2.32%
• AloStar 2.32%

You can search for and compare CD rates by using our rate tables at CDRates.MonitorBankRates.com.

This week’s CD rate changes were numerous because banks and credit unions increased interest rates across the board. The high number of CD rate changes this past week is a result of the Federal Reserve increasing the fed funds rate. The recent fed funds rate increase of 25 basis points put the fed funds rate in a range of 1.50 percent to 1.75 percent.

Since that increase, we have new highs on 3 month, 6 month and 1 year CD rates. The best 3 month CD rate increased to 1.56 percent, up from 1.45 percent. The best 6 month CD rates are now at 2.00 percent, up from 1.85 percent.

It’s nice to write about CD rates making new highs, especially after writing for years about rates making new lows. Just over a month ago we were writing about 1 year CD rates hitting two percent. Now 6 month CD rates at two percent. Hopefully, by the end of the year, 3 month rates will reach 2.00 percent.

1 year CD rates also hit a new high for 2018 at 2.20 percent. Before the rate hike 1 year rates were at 2.10 percent. In late February 1 year rates were at 2.00 percent. Listed below are the recent CD rate changes from banks and credit unions over the past week.

CD Rate Changes Since Fed Funds Rate Hike

Northern Bank Direct CD rates were recently changed. Most of the changes were higher except for CD rates on 2 year certificates of deposit. The largest CD rate changes were on Northern Bank Direct’s 3 year and 5 year certificates of deposit.

Due to the rate changes, Northern Bank Direct has the best CD rate in our 3 year CD rate database. Northern Bank Direct’s other CD rates are not the best CD rates available right now but they are competitive.

Northern Bank Direct is the online banking division of Northern Bank & Trust Company. The bank has been in existence since 1960. S&P rated Northern Bank & Trust Company #1 in New England among Banks with $500M to $5B in assets (source: S&P Global Market Intelligence Rankings).

Northern Bank & Trust Company also has a 4-Star Safe & Sound rating with Bankrate.com. Deposits at Northern Bank Direct are FDIC insured under the Northern Bank FDIC certificate number 18266. The bank’s corporate website is at http://www.nbtc.com.  

Northern Bank Direct CD Rates

• 1 Year CD – 1.50% – Increased from 1.06%
• 2 Year CD – 1.75% – Decreased from 2.26%
• 3 Year CD – 2.55% – Increased from 1.35% * Best 3 Year CD Rate*
• 4 Year CD – 2.56% – Increased from 2.51%
• 5 Year CD – 2.57% – Increased from 1.65%

3 year and 5 year certificates of deposit had the biggest rate increases. 3 year certificates of deposit increased 120 basis points. 5 year CD rates increased 92 basis points.

The Federal Reserve is increasing the federal funds rate because of strong growth and higher inflation. As a result, it’s more than likely this and other banks will be increasing rates more in 2018. Since CD rates are rising, you’re better off investing in shorter term certificates of deposit. Locking into a lower long term CD rate will consequently give you an overall lower rate of return.

To see a current list of rates from Northern Bank Direct check our rate database. You can also find a list of the same rates at the bank’s website: Current CD Rates at Northern Bank Direct.

Ally Bank CD rates were recently changed and the changes were mostly higher. The Bank lowered 1 year CD rates but increased rates on 3 other CD products yesterday. Ally lowered 1 year CD rates from 2.00 percent to 1.70 percent, or 30 basis points. Percentagewise, the decrease was 15 percent, which is a rather large decrease.

Ally Bank 1 year CD rates were the top 1 year rate available since December 2o, when the rate was increased. Back in December, the rate was increased from 1.65 percent to 2.00 percent. While the new rate is the best rate available it still places Ally in the top 10 highest rates.

Ally Bank CD Rates Changed

Ally Bank 1 year CD rates was the only rate decrease while 18 month, 2 year and 3 year CD rates were increased. Listed below are all four rate changes.

• 1 Year CD Rates – Lowered from 2.00% to  1.70%
• 18 Month CD Rates – Increased from 1.75% to 1.80%
• 2 Year CD Rates – Increased from 1.50% to 1.75%
• 3 Year CD Rates – Increased from 1.75% to 1.80%

The rates listed above and Ally Bank’s High Yield CD accounts have tiered interest rates. This means the rate you earn is based on the deposit amount. The minimum deposit for the rates listed above is $25,000. You can still open a CD account at Ally with less than $25k but the rate you earn will be lower.

Ally Bank High Yield CD Rates

Listed below is a current rate list of Ally Bank High Yield CD rates.

In additional to the competitive CD rates listed above, Ally also offers a competitive 11 month CD with a current rate of 1.60 percent. This 11 month CD is Ally’s No Penalty offering.

As you know ,when you open a CD account your money is locked up for the term of the CD. You can withdraw your money early but in doing so, you will forfeit some or all of the interest you earned. With a no-penalty CD, you can withdraw your money early and not pay a fee.

Ally’s No Penalty CD allows you to withdraw your money early without paying a fee as long as it’s more than six days after funding the account. Note the word, “funding,” that means six days after you deposit your money, not six days after you sign up. Still a much shorter period than a solid year.

CD rates continue to move higher in 2017 as November brings more new highs for 1 year CD rates. There are now three banks offering 1 year CD rates at 1.74 percent with an APY of 1.75 percent.

We expect the increase in rates to continue next month and into 2018. The Fed is widely expected to increase the rate during their meeting in December. In fact, the CME Group’s FedWatch Tool puts the probability of an increase at 91.5 percent, as of this writing.

The current fed funds rate is in a range of 1.00 percent to 1.25 percent. An increase in December will put the rate between 1.25 percent and 1.50 percent. The last time the rate was that high was nearly a decade ago. You can view the history of the fed funds rate going back to 1955 in this Rate Chart.

Current Top 1 Year CD Rates

• Banesco USA 1.75% APY 1.75%
• CDBank.com 1.74% APY 1.75%
• Congressional Bank 1.73% APY 1.75%
• First Internet Bank of Indiana 1.70% APY 1.71%
• Limelight Bank 1.70% APY 1.71%
• Crestmark Bank 1.70% APY 1.70%
• M.Y. Safra Bank, FSB 1.70% APY 1.70%
• My eBanc, A Division of BAC Florida Bank 1.69% APY 1.70%
• ableBanking, a division of Northeast Bank 1.69% APY 1.70%
• EverBank 1.68% APY 1.69%

The 1 year CD rates listed above are from online banks, or online banking divisions of traditional brick and mortar banks. You won’t be able to find 1 year CD rates that high from brick and mortar banks and certainly not at the biggest banks.

For example, Wells Fargo’s 1 year CD rates are currently at 0.05 percent, you can see for yourself on the bank’s website. Another large bank, Chase Bank, is offering 1 year CD rates even lower at 0.02 percent. Banks offering rates that low basically don’t want your money. These banks also bury their rates on their websites so you have to dedicate a good amount of time hunting to find the rates.