Credit Union now Offering 1 Year CD Rates at 1.50%
As we predicted in early March, the the top 1 year CD rate currently available is now at 1.49 percent with a yield of 1.50 percent. Conexus Credit Union is the first financial institution in the rate database to increase their 1 year rate to the 1.50 percent level.
The catalyst for sending the best 1 year CD rates to 1.50 percent APY was the Federal Open Market Committee increasing the fed funds rate on March 15th. On March 8th, we wrote a post reporting that the coming fed funds rate increase will likely force the top 1 year CD rate to 1.50 percent. You can read the post at Fed Will Push Top 1 Year CD Rates Above 1.50%.
It will be interesting to see if the top online banks that usually compete to have the best rate will also increase their rate to 1.50 percent or possibly higher. There are several banks very close to the 1.50 percent level. Banesco USA has 1 year rates at 1.45 percent, PurePoint Financial, My e-BAnC by BAC Florida Bank and Live Oak Bank are all offering 1 year rates at 1.40 percent.
We continue to look for higher CD rates in 2017 because the Fed has already said there will be a need to increase the fed funds rate at least two more times in 2017. The current targeted range for the fed funds rate is 0.75 percent to 1.00 percent.
Two more fed funds rate increases will bring the rate up to a range of 1.25 percent to 1.50 percent. Having the fed funds rate in that range will send the highest 1 year CD rates up to 2.00 percent. The last time 1 year CD rates were in the 2.00 percent range was around six years ago.