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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