Certificate of Deposit Rates Move Higher as the FOMC is Scheduled to Meet This Week

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Banks and credit unions continue to increase certificate of deposit rates this past week. Once again, the rate increases are small since any larger increases will have to wait until the Federal Open Market Committee increases the federal funds rate. The FOMC's next meeting is scheduled for December 16 and 17.

There is talk that the FOMC might drop the "considerable time" language on keeping interest rates low. Since the financial crisis and recession 6 years ago, the FOMC has used the language to send signals to the markets that they were in no hurry to increase the federal funds rate.



Omitting the language is the last step the FOMC will take before actually increasing the fed funds rate. When the fed funds rate is increased, financial institutions will quickly increase deposit account rates. The FOMC is expected to increase the rate sometime in 2015. The soonest the rate will increase will likely be during the June meeting and the latest the rate will be increased is in the December meeting.

You can read more about the probability of a rate increase in a recent post: The Probability of a Fed Funds Rate Hike Increases Again.

We recommend staying invested in shorter term certificates of deposit or variable interest rate accounts. You want to position yourself to take advantage of higher interest rates sooner than later.

Listed below are the best certificate of deposit rates on short term CD accounts for December 10, 2014:

3 Month Certificate of Deposit Rates

  • First Internet Bank of Indiana 0.45% APY

  • Alostar Bank of Commerce 0.40% APY

  • Goldwater Bank 0.40% APY

  • Virtual Bank 0.40% APY

  • Barclays Bank 0.35% APY

  • Discover Bank 0.35% APY


6 Month Certificate of Deposit Rates

  • Doral Direct 0.82% APY

  • EH National Bank 0.80% APY

  • My e-BAnC by BAC Florida Bank 0.77% APY

  • giantbank.com 0.75% APY

  • First Internet Bank of Indiana 0.70% APY

  • GE Capital Bank 0.70% APY

  • Goldwater Bank 0.70% APY


9 Month Certificate of Deposit Rates

  • NewDominion Bank Rate 0.89% APY 0.90%

  • Doral Direct Rate 0.86% APY 0.86%

  • Alostar Bank of Commerce Rate 0.80% APY 0.80%

  • giantbank.com Rate 0.80% APY 0.80%

  • Discover Bank Rate 0.70% APY 0.70%

  • GE Capital Bank Rate 0.70% APY 0.70%

  • Virtual Bank 0.70% APY 0.70%


12 Month Certificate of Deposit Rates

  • CIT Bank Rate 1.14% APY 1.15%

  • My e-BAnC by BAC Florida Bank Rate 1.14% APY 1.15%

  • Sallie Mae Bank Rate 1.14% APY 1.15%

  • Pentagon Federal Credit Union Rate 1.10% APY 1.10%

  • Synchrony Bank Optimizer +Plus Rate 1.09% APY 1.10%

  • California First National Bank Rate 1.09% APY 1.10%

  • GE Capital Bank Rate 1.09% APY 1.10%

  • Silvergate Bank Rate 1.07% APY 1.08%

  • giantbank.com Rate 1.05% APY 1.06%

  • Ally Bank Rate 1.00% APY 1.00%

 
Author: Brian McKay
December 15th, 2014