Highest CD Rates Move Higher as Banks Increase Rates
CD rates over the past seven days. Rates on both short term and long term certificates of deposits moved higher.
The biggest increases again this week were on shorter term certificates of deposit. This is because the Federal Reserve is driving short term rates higher. The Fed is scheduled to meet in the middle of next month and is widely expected to increase rates again.
Highest CD Rates
Another Fed increase in the fed funds rate will entice banks and credit unions to increase CD rates even more. Currently, the highest CD rates on 1 year certificates of deposit are just above 2.00 percent. The best CD rate right now on the rate table is 2.10 percent from Live Oak Bank.
By the end of March, expect the highest 1 year CD rate to be around 2.25 percent to 2.35 percent. Looking towards the end of 2018, the highest rate will be around 3.00 percent to 3.25 percent. The key to where rates end up is how many times the Fed increases the fed funds rate.
The Fed is expected to increase the rate at least three times in 2018. There might be more increases if inflation is higher than expected. Consequently, deposit rates will move higher than expected.
The key pieces of economic news to watch are the Consumer Price Index, Producer Price Index, hourly earnings, and the unemployment rate. Stronger economic news will force the Fed to increase rates more than three times this year.
This Week's CD Rate Changes
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