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CD Rates Won’t Change Much in 2014 Due to a Zero Percent Fed Funds Rate

CD rates are not expected to increase much this year because the Federal Reserve is keeping their key benchmark interest rate, the federal funds rate, near zero percent. The federal funds rate is the interest rate at which banks trade (lend) balances to each other, usually overnight. These funds are held at the Federal Reserve and the Federal Reserve sets the fed funds rate, which is currently in a targeted range of zero to one quarter percent.

Until the end of 2013, there was hope that CD rates, savings rates, and money market rates would increase this year. That changed when the Federal Reserve released their December meeting statement saying they wouldn't increase the federal funds rate once the unemployment rate falls below 6.5 percent. Therefore, deposit rates won't likely increase much this year.



Average CD Rates This WeekNo Changes in Average and Best CD Rates Available


There will be some banks and credit unions increasing the rates they pay on deposit accounts but overall rates won't move higher. Which is unfortunate because rates are so low and have been low for over 5 years now. This past week there we no changes in average 1 year bank CD rates or the best 1 year CD rates available.

Average 1 year rates remained at 0.74 percent and the highest 1 year rates available on our table remain at 1.09 percent with an APY of 1.10 percent. Average 2 year rates also remained unchanged this week at 0.93 percent and average 5 year rates increased 1 basis point to 1.50 percent.

Best 6 Month CD Rates


The highest 6 month CD rates this week in our database are currently at 1.00 percent from Zions Direct. A 1.00 percent rate for a 6 month CD is great, considering most banks are not even offering a rate that high on 1 year CD accounts. This rate is also eight times higher than the FDIC's average 6 month rate of 0.12 percent.

10 banks offering the best 6 Month CD Rates

  1. Zions Direct Rate 1.00%

  2. Doral Direct 0.87%

  3. AloStar Bank of Commerce 0.75%

  4. GE Capital Retail Bank 0.70%


  5. My e-BAnC by BAC Florida Bank 0.70%

  6. giantbank.com 0.70%

  7. Discover Bank 0.65%

  8. VirtualBank 0.65%

  9. Ally Bank 0.61%

  10. First Internet Bank of Indiana 0.60%


Best 1 Year CD Rates



  1.  AloStar Bank of Commerce 1.09% APY 1.10%

  2. AmTrust Direct 1.04% APY 1.05%

  3. GE Capital Retail Bank Optimizer Plus 1.04% APY 1.05%

  4. My e-BAnC by BAC Florida Bank 1.00% APY 1.01%

  5. GE Captial Bank 1.00% APY 1.00%

  6. The Palladian PrivateBank 1.00% APY 1.00%

  7. Ally Bank 0.99% APY 0.99%

  8. Discover Bank 0.95% APY 0.95%

  9. Doral Direct 0.95% APY 0.95%

  10. giantbank.com 0.95% APY 0.95%


Best 2 Year CD Rates



  1. Pentagon Federal Credit Union 1.40% APY 1.41%

  2. AloStar Bank of Commerce 1.24% APY 1.25%

  3. CIT Bank 1.19% APY 1.20%

  4. GE Capital Retail Bank 1.14% APY 1.15%

  5. GE Capital Retail Bank Optimizer Plus 1.14% APY 1.15%

  6. My e-BAnC by BAC Florida Bank 1.10% APY 1.11%

  7. VirtualBank 1.10% APY 1.11%

  8. The Palladian PrivateBank 1.10% APY 1.10%

  9. Ally Bank 1.09% APY 1.10%

  10. Doral Direct 1.08% APY 1.08%


Best 3 Year CD Rates



  1. Pentagon Federal Credit Union 2.00% APY 2.02%

  2. Intervest National Bank 1.44% APY 1.45%

  3. AloStar Bank of Commerce 1.34% APY 1.35%

  4. GE Capital Retail Bank 1.29% APY 1.30%

  5. GE Capital Retail Bank Optimizer Plus 1.29% APY 1.30%

  6. Salem Five 1.29% APY 1.30%

  7. Barclays Bank 1.24% APY 1.25%

  8. Discover Bank 1.24% APY 1.25%

  9. EverBank 1.20% APY 1.21%

  10. VirtualBank 1.20% APY 1.21%


Best 4 Year CD Rates



  1. Pentagon Federal Credit Union 2.20% APY 2.22%

  2. EverBank 1.67% APY 1.68%

  3. Nationwide Bank 1.66% APY 1.67%

  4. Barclays Bank 1.64% APY 1.65%

  5. Intervest National Bank 1.64% APY 1.65%

  6. State Farm Bank 1.58% APY 1.60%

  7. GE Retail Bank 1.50% APY 1.51%

  8. Virtual Bank 1.50% APY 1.51%

  9. Discover Bank 1.49% APY 1.50%

  10. Doral Direct 1.31% APY 1.32%


Best 5 Year CD Rates



  1. Pentagon Federal Credit Union 3.00% APY 3.04%

  2. EverBank 2.14% APY 2.16%

  3. Barclays Bank 2.13% APY 2.15%

  4. iGObanking.com 2.13% APY 2.15%

  5. State Farm Bank 2.03% APY 2.05%

  6. VirtualBank 2.00% APY 2.02%

  7. GE Capital Retail Bank Optimizer Plus 1.98% APY 2.00%

  8. GE Capital Retail Bank 1.98% APY 2.00%

  9. Intervest National Bank 1.93% APY 1.95%

  10. AloStar Bank of Commerce 1.64% APY 1.65%

 
Author: Brian McKay
January 21st, 2014