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Recent CD Rate Changes Are Mostly Lower

Bond yields across the globe have tumbled since U.K. voters voted yes to leave the European Union. Yields on German and Japanese bonds are negative, so investors are paying to hold those bonds instead of receiving interest. This week, long term U.S. bonds hit new record lows. 30 year yields have fallen to 2.09 percent and 10 year yields fell to 1.34 percent.

While there isn't a direct link between bond yields and CD rates, banks are taking a cue from lower bond yields to lower CD rates and other deposit rates. The majority of recent CD rate changes have been lower. Another factor that will keep downward pressure on deposit rates is the Fed deciding to not increase the fed funds rate.

The U.K. vote to leave the European Union has created so much uncertainty, it's very unlikely the Fed will increase the fed funds rate anytime in 2016. This is bad news for savers because there is a direct correlation between the fed funds rate and deposit rates.

On a positive note, lower long term bond yields will mean lower mortgage rates. 30 year mortgage rates today are averaging 3.39 percent, only 8 basis points from an all-time low set in 2012.

Recent CD Rate Changes

BankProductRate (New / Old)Yield (New / Old)
Astoria Bank2.5 yr CD0.65 / 0.750.65 / 0.75
Nationwide Bank4 yr CD1.74 / 1.781.76 / 1.8
Silvergate Bank1 yr jumbo CD0.1 / 1.070.1 / 1.08

Pentagon Federal Credit Union

1 yr CD

1 / 1.1

1.01 / 1.11
Pentagon Federal Credit Union2 yr CD1.15 / 1.31.16 / 1.31
Pentagon Federal Credit Union3 yr CD1.15 / 1.31.16 / 1.31
Pentagon Federal Credit Union5 yr CD1.2 / 1.41.21 / 1.41
Pentagon Federal Credit Union4 yr CD1.15 / 1.31.16 / 1.31

E-Loan

3 yr CD1.54 / 1.641.55 / 1.65
E-Loan5 yr CD1.98 / 2.032 / 2.05
E-Loan5 yr jumbo CD1.98 / 2.032 / 2.05
E-Loan3 yr jumbo CD1.54 / 1.641.55 / 1.65
E-Loan4 yr CD1.74 / 1.781.75 / 1.8
E-Loan4 yr jumbo CD1.74 / 1.781.75 / 1.8
EverBank1 yr CD0.95 / 0.90.95 / 0.9
EverBank1 yr jumbo CD0.95 / 0.90.95 / 0.9
TriState Capital Bank6 month jumbo CD0.65 / 0.750.65 / 0.75
TriState Capital Bank1 yr jumbo CD0.9 / 10.9 / 1
TriState Capital Bank2.5 yr jumbo CD1.15 / 1.241.15 / 1.25
TriState Capital Bank2 yr jumbo CD1.1 / 1.191.1 / 1.2
TriState Capital Bank18 month jumbo CD1 / 1.11 / 1.1
TriState Capital Bank3 yr jumbo CD1.29 / 1.391.3 / 1.4

 







 
Author: Brian McKay
July 9th, 2016