Banks in the Heartland of the US Have the Highest CD Rates

Not all states are equal – at least when it comes to CD rates. Those are the findings from an analysis run by BestCashCow.com on its database of bank rates. The site analyzed its database of over 7,000 banks and 2,000,000 product rates to determine the best states to park your cash. Among the findings:

• Eight out of the top twelve states with the highest one year CD rate averages were from the central part of the United States.
• Five out of the top twelve states with the highest five year CD rate averages were from the central part of the United States.

When it comes to bank rates, the more expensive states weren’t even in the running. Financial powerhouse New York was thirty-sixth in rank for one year CDs and forty-second on the list for five year CDs while California was thirty-eight for one year CD averages and twenty-second for five year CD rates.

The rate discrepancy between the heartland the coasts may reflect several factors:

• The heartland states tend to have a higher percentage of small, community based banks that offer more competitive rates. For example, Oklahoma, the state with the most competitive 1 year CD rates has 15,828 people per small and medium-sized bank while New York 133,511 people per small and medium-sized bank.
• The heartland states are benefiting from a boom in the agricultural/commodity markets that has stimulated the economy and may have resulted in regionally higher rates. Eight of the top eleven states with the highest average rates are also in the top ten in terms of agriculture as a percentage of their economy. Soaring commodity prices may also be creating higher CD rates for consumers in those states.

It’s not just average rates that are higher. The highest rate in the country right now is 3.24% APY from West Plains Bank in Ainsworth, NE. As a comparison, the highest rate in New York State is 3.04% APY.

Below are the CD Rate Averages:

One Year CD Rate Averages

Five-year CD Averages