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CD Rates Stable This Month as Short Term Bond Rates Soar

Since our last CD rate report just over a month ago, CD rates haven't changed that much while short term U.S. Treasury rates have risen much higher. Shorter term treasury rates are moving higher on concerns about the U.S. defaulting on its debt if the debt ceiling isn't increased in time.

Just the slight possibility of default or the change of missing an interest payment has sent bond rates of 1 year or less much higher in just over a month. For example, back on September 19th, 1 month bond rates averaged zero percent. That's right zero percent. Yesterday's close for 1 month bond rates was 0.26 percent.



This is the first time in recent memory that 1 month bond rates are actually higher than 1 month CD rates.   During this time the best CD rates available on our 1 month certificate of deposit rate list hasn't changed at all at 0.15. I don't expect this to last for long, once the politicians in Washington can come to an agreement on the debt ceiling, short term bond rates will fall below short term CD rates.

Looking at longer term bond rates over the past month, there have been increases but nothing like the sharp increase in 1 month rates. Current 3 month bond rates closed yesterday at 0.05 percent. The low point last month for 3 month bond rates was 0.01 percent.

3 month CD rates at banks also haven't moved at all during the past month. The highest CD rates for 3 month certificates of deposit in our database are still at 0.45 percent. Looking at 6 month bank CD rates, we see the highest rate available right now in our database is at 1.00 percent.

6 month bond rates have quadrupled over the past month but rates are still nowhere near 6 month CD rates. Current 6 month Treasury yields are averaging 0.08 percent which is up from a low point of 0.02 percent last month. Current 1 year bond rates are at 0.15 percent, up from a low point of 0.10 percent last month.

1 month bond rates are 50 percent higher this month but still nowhere near average 1 year bank rates. 1 year CD rates at banks are currently averaging 0.71 percent. The best 1 year rates are much higher than average rates. The best 1 year rate available in our database are at 1.09 percent with an APY of 1.10 percent.

U.S. Treasury Rates as of 10/9/13



  • 1 Month Rates 0.26%

  • 3 Month Rates 0.05%

  • 6 Month Rates 0.08%

  • 12 Month Rates 0.15%

  • 24 Month Rates 0.37%

  • 36 Month Rates 0.68%

  • 60 Month Rates 1.43%


Best CD Rates as of 10/9/13



  • 1 Month Rates 0.15%

  • 3 Month Rates 0.45%

  • 6 Month Rates 1.00%

  • 12 Month Rates 1.10%

  • 24 Month Rates 1.19%

  • 36 Month Rates 1.50%

  • 60 Month Rates 2.00%

 
Author: Brian McKay
October 10th, 2013