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Savings Account and Certificate of Deposit (CD) Rate Analysis

Series Submitted by: Sol Nasisi
Savings - Checking - CDs


Analysis of how savings account rates and certificate of deposit rates (cds) are trending base on current and historical data.

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Submitted: Jan 9, 2009    Views: 314    Comments: 0    Likes: 1   


January 9, 2008 Update

Rates on savings accounts, money market accounts, and certificates of deposit continue to fall, although the rate of decline has slowed. It appears we may be getting close to a floor in rate cuts following the Fed dropping the Fed Funds rate to 0%. It may be wishful thinking but the data looks encouraging.

The changes from the pervious week are:

  • Savings Accounts: 4 basis point drop from 3.15% to 3.11% APY
  • 1 Year CD: 11 basis point drop from 3.36% to 3.25% APY
  • 3 Year CD: 9 basis point drop from 3.51% to 3.42% APY
  • 5 Year CD: 1 basis point drop from 4.00% to 3.90% APY

Note: 100 basis points represents 1%. Thus a drop by 100 basis points would be a drop from 4% to 3%.

Here are the rate of drops for the past four weeks since the Fed dropped rate, in percentage points.

  • Savings Accounts: .07, .05, .11, .04
  • 1 Year CD: .14, .24, .16, .11
  • 3 Year CD: 0.0, .33, .13, .09
  • 5 Year CD: .01, .36, .08, .01

While savings accounts have dropped by an average of 27 basis points since the Fed cut, there are banks that are holding the line. The champ for this is DollarSavingsDirect with a savings account rate that leads the nation at 4% APY. They've held that rate since September 11, 2008 when it was raised from 3.75% APY. Kudos also go to Bank of Internet. They have actually increased their savings account rate from 3.46% APY on 9/11/08 to 3.51% APY today.

As I discussed before , banks are still hungry for your cash and will pay you pretty good rates (considering the market) for it.

  CDandSavingsRateTracker

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