CD Rates on Upswing While Savings Rates Still Falling

Rate information contained on this page may have changed. Please find latest cd rates.

The latest batch of data shows that longer-term CD rate averages are moving up while shorter term CDs as well as savings and money market rates continue to fall. Are we near a bottom?

The latest batch of data shows that longer-term CD rate averages are moving up while shorter term CDs as well as savings and money market rates continue to fall.  Are we near a bottom?

The chart below shows the rate trends and the uptick in 3-year and 5-year rates over the last two weeks based on the average rates from the BestCashCow rate tables.

The spread, or the difference between the average savings/money market rate and the avarage 3 year CD rate is now at its highest point in over a year. My interpretation is that with rising inflation expectations, banks have to pay consumers more to lock their money up for longer periods of time. Banks can cut short term rates because investors have less places to put the cash that they wish to keep liquid. But if the economy revs up, or inflation rears its head, look for short term rates to begin to rise.

While it's impossible to know for sure, the spread may be an indicator that we have already reached and passed the bottom in longer-term deposit rates and are rapidly approaching that point with savings, money markets and short-term CDs. It may also indicate, as I speculated before the latest stock market rally, that it may be a positive indicator for the general economy and financial markets.

Sol Nasisi
Sol Nasisi: Sol Nasisi is the co-founder and a past president of BestCashCow, an online resource for comprehensive bank rate information. In this capacity, he closely followed rate trends for all savings-related and loan products and the impact of rate fluctuations on the economy. He specifically focused on how rates impact consumers' ability to borrow and save. He also has authored a wee

Your code to embed this article on your website* :

*You are allowed to change only styles on the code of this iframe.

Today's Highest Online CD Rates

Bank Product Term Interest Rate (APY)
Navy Federal Credit Union 1-Year 0.85% APY with $100,000 minimum
Primary Bank 1-Year 0.80% APY with $1,000 minimum
Gateway First Bank 1-Year 0.75% APY with $25,000 minimum
Primary Bank 3-Year 1.00% APY with $1,000 minimum
USAA Federal Savings Bank 3-Year 0.91% APY with $175,000 minimum
Connexus 3-Year 0.90% APY with $5,000 minimum
Primary Bank 5-Year 1.30% APY with $1,000 minimum
Navy Federal Credit Union 5-Year 1.25% APY with $100,000 minimum
USAA Federal Savings Bank 5-Year 1.11% APY with $175,000 minimum

See More Online CD Rates →

Comments

Add your Comment