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Unemployment Report Falls to 5.8% are Higher CD Rates on the Way?

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Another economic report was released this morning showing an economy continuing to recover. This recovery process will eventually force CD rates higher. The Labor Department just released non-farm payrolls showing that 214,000 jobs were created in October, slightly lower than forecasts of 231,000. The unemployment rate fell from 5.9 percent to 5.8 percent, which is the lowest point in six years. The number of jobs created were slightly lower than forecast but the recovery remains intact.

The unemployment rate continues to fall, which will eventually force employers to increase wages to attract and retain employees. The key number to look for which will force the Federal Reserve to increase interest rates is hourly average wages. Average hourly wages are at $20.70, up from the average of $20.25 in October 2013. Over the past year, hourly average wages are up 2.00 percent.

The Federal Reserve has forecast the need to increase the fed funds rate sometime in 2015. Exactly when the rate is increased depends primarily on the inflation rate. Once the Fed increases the fed funds rate, banks will follow with higher deposit rates. Over the past several months, bank CD rates have been moving higher as some banks increased their rates.

Average rates are still stagnant because the increase in rates has been minimal and the majority of banks haven't increased rates. Larger increases in CD interest rates will start in the summer of 2015 and will continue for a few years. You're best served by staying invested in shorter term certificates of deposit now so you can earn higher rates in the near future.

Listed below are the best CD rates for November 7, 2014

1 Year CD Rates

  • Sallie Mae Rate 1.14% APY 1.15%

  • CIT Bank Rate 1.11% APY 1.12%

  • Synchrony Bank Optimizer Plus Rate 1.09% APY 1.10%

  • BankDirect Rate 1.09% APY 1.10%

  • Colorado Federal Savings Bank Rate 1.09% APY 1.10%

  • GE Capital Bank Rate 1.09% APY 1.10%

  • My e-BAnC by BAC Florida Bank Rate 1.09% APY 1.10%

  • Silvergate Bank Rate 1.07% APY 1.08%

  • Congressional Bank Rate 1.04% APY 1.05%

6 Month Rates

  • Chartway Federal Credit Union 0.85% APY

  • Doral Direct 0.82% APY

  • EH National Bank 0.80% APY

  • ableBanking, a division of Northeast Bank 0.70% APY

  • Colorado Federal Savings Bank 0.70% APY

  • First Internet Bank of Indiana 0.70% APY

  • GE Capital Bank 0.70% APY

  • My e-BAnC by BAC Florida Bank 0.70% APY

3 Month Rates

  • First Bank of Indiana 0.45% APY

  • AloStar Bank of Commerce 0.40% APY

  • BankDirect 0.40% APY

  • Goldwater Bank 0.40% APY

  • Pacific Mercantile Bank 0.40% APY

  • Virtual Bank 0.40% APY

Author: Brian McKay
November 7th, 2014