April 4, 2009 Update
The average rate on shorter term deposit accounts fell this week while longer term CD rates actually rose according to the BestCashCow rate table. This continues a trend we have seen for the last two months where longer term rates are either rising or falling at a much slower pace than longer term rates. This was not the case at the height of the economic crisis in the fall of 2008, when longer term rates fell at a substially faster pace then short-term rates. The graph below shows that the spread between the average savings/money market rates and the 3 year CD have increased to .82 percentage points, the highest level since November of last year.

In this environment, staying with shorter-duration investments may be the best bet.
The changes from last week are:
- Savings Accounts: 7 basis point drop from 2.26% to 2.19% APY
- 1 Year CD: 4 basis point drop from 2.66% to 2.62% APY
- 3 Year CD: 1 basis point gain from 2.99% to 3.00% APY
- 5 Year CD: 1 basis point gain from 3.43% to 3.44% APY

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Related Articles:
NY Times Article on How Low Interest Rates Hurting Investors by Sam Cass - Dec 25, 2009
Etrade Drops Rate, Offers $25 Bonus, and Financial Health by David Walsh - Feb 12, 2008
For opportunists, IndyMac CD yields are a bonanza by ktexas - Jul 09, 2008
Rate uncertainties - How secure are those high-yield bank interest rates? by ktexas - Jul 04, 2008
Everbank Rates by Everbank Info - Jul 23, 2007
Why Do People Stash Money in Low Rate Accounts? by BankMan - Aug 02, 2007
Countrywide and E-Loan Raise Rates while Treasury rates fall sharply by BankMan - Aug 17, 2007.


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