CD Rates Report: CD Interest Rates Stable as Fed Meets This Week
The Fed Chair, Janet Yellen, hinted there are three key economic items the Fed needs to track. The level of slack in the labor market, whether inflation is increasing towards the Fed's 2.00 percent goal, and anything that could derail the economic recovery. The first two items will determine when the Fed increases the fed funds rate.
The Fed is expected to end their asset purchases in 2014 and increase the fed funds rate sometime in 2015. Yellen said unexpected "twists and turns" could force the Fed to diverge from its highly telegraphed plans. This is doubtful since the economy is finally picking up steam. A higher fed funds rate and higher deposit rates are more like in 2015.
1 year CD rates are averaging 0.90 percent this week, no change from last week's average 1 year CD rate. The best 1 year CD rates in our database are slightly higher at 1.06 percent with an APY of 1.07 percent. Two weeks ago, the top 1 year CD rate was slightly lower at 1.04 percent with an APY of 1.05 percent.
The best 2 year CD rates in our database are also slightly higher this week. The highest 2 year rate this week is at 1.26 percent with an APY of 1.27 percent, up 1 basis point from last week's highest 2 year rate. Average 2 year CD rates are at 1.03 percent, unchanged from the prior week's 2 year CD rate.
Moving onto 5 year CD rates, the average 5 year rate is week is at 1.59 percent, unchanged from the previous week's average rate. The highest 5 year CD rates this week are at 2.24 percent with an APY of 2.27 percent, up slightly from last week's best rate.
The future direction of CD rates will be higher in the coming years, the question is when will rates start moving higher. Since CD rates, savings rates and money market rates are dependent on where the fed funds rate is, rates won't start moving higher until the fed funds rate is increased. The Fed is currently expected to increase the rate in the summer or fall of 2015. Therefore you should stay invested in shorter term certificates of deposit of 1 year or less.
Listed below are the top CD rates for the week of April 28, 2014:
Best 6 Month Bank CD Rates
Top 1 Year CD Rates
Highest 2 Year CD Interest Rates
3 Year CD Rates at Banks
4 Year Rates
5 Year CD Rates
CD Rates | Best Certificate of Deposit Rates at Banks with the Highest Yields
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