Interest Rates are Stable as Fed Drops Asset Buys to $45 Billion a Month

So far in 2014, interest rates have been relatively stable as the Federal Reserve continues to taper their asset purchases. U.S. Treasury rates and mortgage rates declined about 0.25 percent since the beginning of the year despite the Fed slowing their buys of long term bond and mortgage-backed securities.

For most of 2013 investors were nervously awaiting an announcement by the Fed that they would slow taper buys. Investors drove 10 year bond rates up 1.00 percent on the fear that Fed would taper. 30 year conforming mortgage rates also went up 1.00 percent since lenders tie mortgage rates to long term bond yields.



While interest rates on bonds and mortgages moved higher the past year, the same can't be said for deposit rates. Higher CD rates, savings rates and money market account rates are dependent on a higher federal funds rate. The Fed isn't expected to increase the fed funds rate until sometime in late 2015.

A strong employment report for April gave investors hope that the Fed would react sooner than expected to increase the fed funds rate. April's employment report showed strong job growth and the unemployment rate falling by 0.4 percent. The Fed would need to see continued strong job creation in 2014 in order to increase interest rates sooner than later.

Since the future direction of interest rates are higher over the next several years, you should position your finances to reflect higher rates. Lock into a mortgage rate sooner than later in 2014 to take advantage of historically low rates. Do the opposite for your deposit accounts - stay invested in shorter term certificates of deposit. Invest in CDs of 12 months or less or stay invested in variable interest rate accounts. Savings accounts and money market accounts are both variable rate accounts.

Below are lists of the best interest rates in our databases on mortgages, certificates of deposits, savings accounts, and money market accounts.

Lowest Mortgage Rates

Conforming Loans

• 30 Year Rates 3.75% with 2.00 points


• 15 Year Rates 2.75% with 1.10 points


• 3/1 Year Rates 1.99% with zero points


• 5/1 Adjustable Rates 2.375% with 1.10 points


• 7/1 Adjustable Rates 2.625% with 1.10 points


• 10/1 Adjustable Rates 3.125% with 1.10 points

Jumbo Loans

• 30 Year Rates 3.875% with 2.00 points


• 15 Year Rates 3.25% with 2.00 points


• 3/1 Year Rates 1.99% with zero points


• 5/1 Adjustable Rates 2.25% with 2.00 points


• 7/1 Adjustable Rates 2.875% with 1.10 points


• 10/1 Adjustable Rates 3.375% with 1.10 points

Highest CD Rates

• 3 Month Rates 0.45% APY 0.45%


• 6 Month Rates 1.00% APY 1.00%


• 9 Month Rates 0.91% APY 0.91%


• 1 Year Rates 1.06% APY 1.07%


• 18 Month Rates 1.17% APY 1.18%


• 2 Year Rates 1.25% APY 1.26%


• 30 Month Rates 1.24% APY 1.25%


• 3 Year Rates 1.44% APY 1.45%


• 4 Year Rates 1.77% APY 1.79%


• 5 Year Rates 2.28% APY 2.31%

Highest Variable Interest Rate Accounts

• Savings Rate 0.95% APY 0.95%


• Money Market Rate 0.90% APY 0.90%