January 2, 2008 Update
Happy 2009! Let's hope the New Year brings health, wealth, and prosperity to all readers of BestCashCow.
We start 2009 unfortunately, on a down note. Rates on savings. money markets, and CDs continue to fall in the wake of the Fed's rate cut several weeks ago. It's clear we have not hit the rate bottom and that cuts will continue as banks adjust to a 0-.25% Fed Funds rate. The changes from the pervious week are:
- Savings Accounts: 15 basis point drop from 3.26% to 3.11% APY
- 1 Year CD: 16 basis point drop from 3.52% to 3.36% APY
- 3 Year CD: 13 basis point drop from 3.64% to 3.51% APY
- 5 Year CD: 1 basis point drop from 4.10% to 4% APY
Note: 100 basis points represents 1%. Thus a drop by 100 basis points would be a drop from 4% to 3%.
The avareges still don't tell the whole story. While the Fed Funds rate has dropped by 175 basis points, the very best savings rate hasn't dropped at all. On October 3, the best rate in the country was DollarSavingsDirect at 4% APY and CNB Bank Direct at 4% APY. DollarSavingsDirect still has a 4% APY offer. Of course these are savings accounts and rates could change tomorrow but it's encouraging to know that many banks on the BestCashCow rate tables are keeping rates competitive and attractive to depistors.
The very best Certificate of Deposit rates have dropped a bit more. The top 1 year (12 month) CD paid 5% APY one year ago and it now pays 4% APY. The top 3 year (36 month) CD dropped from 4.78% APY to 3.09% APY. Thus, as an invetor while you could have maximized return by locking in a CD in early October, there are still some attractive savings and CD Rates available.
As I discussed last week, banks are still hungry for your cash and will pay you pretty good rates (considering the market) for it.
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Related Articles:
Rate uncertainties - How secure are those high-yield bank interest rates? by ktexas - Jul 04, 2008
Rate Chasers Start to Ask 'Why?" by soczie - May 19, 2009
Internet Enables Chesapeake, EBSB and Acacia Banks to Quickly Raise Money with Promotional Savings Rates by soczie - Jun 04, 2009
DollarSavingsDirect Raises Online Savings Rate to 4% APY by Sam Cass - Oct 10, 2008
The Savvy Investor Can Dramatically Increase Safe Returns in Minutes by DanS - Apr 22, 2009.
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