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Highest CD Rates on 12 Month CDs Decline as 2012 Comes to an End (But not the World)

Several banks lowered CD rates on 12 month certificates of deposit over the past several weeks as 2012 comes to an end. The highest CD rates on our 12 month rate list just two weeks ago were at 1.10 percent (APY 1.11%), now the best CD rates on our 12 month rates list are 5 basis points less at 1.05 percent (APY 1.06%). The current national average 12 month CD rate is lower averaging 0.71 percent.

CD rates at banks and credit unions have been on a slow decline for many years now, the start of the declines occurred just after the financial crisis in 2008. Back then you could find the best 1 year CD interest rates as high as 5.00 percent, those days are now a distant memory. If rates continue on a downward trajectory the best 1 year rates will be below 1.00 percent.

The Federal Reserve plans to keep the Fed fund's rate near zero percent until at least mid-2015 and probably even later if the unemployment rate remains high. The Fed's policy will keep downward pressure on CD rates and other interest bearing investments until mid-2015, one thing is for sure don't expect higher rates before then.

Here is a quick rundown of the top CD rates on 1 year certificates of deposit this week:

  1. Sallie Mae Bank Rate 1.04% APY 1.05%

  2. ableBanking Rate 1.04% APY 1.05%

  3. Colorado FSB Rate 1.04% APY 1.05%

  4. CIT Bank Rate 1.04% APY 1.05%

  5. MetLife Bank Rate 1.04% APY 1.05%

  6. Ally Bank Rate 1.03% APY 1.04%

  7. E-Loan Rate 1.02% APY 1.02%

  8. Discover Bank Rate 1.00% APY 1.00%

  9. Giant Bank 1.00% APY 1.00%

  10. Doral Bank 0.99% APY 0.99%

Author: Jason P. Jones
December 21st, 2012