Best CD Rates

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.

The Federal Reserve wrapped up their two day meeting yesterday and decided to keep the fed rates unchanged. The Fed was expected to stand pat on rates during the September meeting. Even though the Fed kept rates where they are, online CD rates continue to march higher.

Between this Fed meeting and the last meeting in July, we have witnessed several new highs for short term CD rates. 1 year CD rates already made two new highs in the month of September. On September 5th, we reported the top 1 year CD rate increased to 1.60 percent and now the top 1 year rate is at 1.65 percent.

We are still predicting 1 year CD rates will hit a high of 1.75 percent by the end of 2017 but only if the Fed increases the fed funds rate once more this year. You can see a list of the best 1 year CD rates listed below.

Top 1 Year CD Rates This Week

1. CDBank.com 1.65%
2. EverBank 1.62%
3. My e-BAnC by BAC Florida Bank 1.62%
4. Pacific National Bank 1.60%
5. Popular Direct 1.60%
6. M.Y. Safra Bank, FSB 1.58%
7. First Internet Bank of Indiana 1.57%
8. VirtualBank 1.56%
9. Goldman Sachs Bank USA 1.50%
10. Sallie Mae 1.50%

6 month CD interest rates are also moving higher during the same time period. The top rate is moving up from 1.25 percent a couple months ago to 1.36 percent today. By the end of 2017, we look for 6 month rates to move towards 1.50 percent. Listed below are the best 6 month CD rates.

Top 6 Month CD Rates This Week

1. VirtualBank 1.36%
2. First Internet Bank of Indiana 1.32%
3. M.Y. Safra Bank, FSB 1.26%
4. Live Oak Bank 1.25%
5. Pacific National Bank 1.25%
6. Nationwide Bank 1.20%
7. Luana Savings Bank 1.10%
8. TAB Bank 1.06%
9. Goldwater Bank 1.05%
10. My e-BAnC by BAC Florida Bank 1.05%

Looking beyond 2017, CD interest rates will continue to increase in 2018 and 2019 as long as the Fed increases interest rates. The rates listed above are all from online banks. If you compare these rates with traditional brick and mortar bank rates, you’ll see why we always recommended online banks for the best CD interest rates.