Savings and CD Rates Continue Drop - Top CD Rate at 3.31% APY

Savings rates showed little movement last week while CD rates continued to fall. Longer-term CDs led the decline.

Savings Rates

Average rates dropped slightly from 1.32% APY to 1.31% APY. The top non-promotional rate remains East Boston Savings Bank at 1.55% APY. One month ago, the top rate was 2% APY. So, in four weeks the top rate you could get on a savings account has fallen significantly. For promotional rates, Everbank remains on top with their 3-month introductory bonus rate of 2.25% APY. After the three-month period, the rate drops down to 1.26% APY for a blended one year APY of 1.51% APY.

CD Rates

The average 1-year CD dropped slightly from 1.57% APY to 1.55% APY. First City Bank continues to hold the top spot with a 1.80% APY CD. First City is in bad financial shape and has been operating under a FDIC Cease and Desist Order since 10/09. CNB Bank moved into the second sport with a 1.65% APY CD.

The average 3-year CD rate dropped the most, from 2.42% to 2.37% APY. The top spot continues to be occupied by USAA Federal Savings Bank, which offers a 2.65% APY CD with a minimum deposit of $175,000. The next highest rate is Acacia Federal Savings at 2.50% APY and a $500 minimum deposit.

The average 5-year CD rate dropped from 3.12% APY to 3.07% APY. At this rate, the average will go below 3% in the next 3-4 weeks.

USAA continues to have the top rate at 3.31% APY. The second highest rate has dropped from 3.26% APY to 3.25% APY offered by Acacia Federal Savings Bank.

The spread between savings and 3-year CD rates dropped significatly last week and is now at 1.05, down from a high of 1.24 in March. The ratio between 1-year CDs and 5-year CDs has remained steady over the past month and appears to have topped off. What does that mean? Longer term rates are no longer holding their own and are dropping at a faster rate than short-term rates. All rates are continuing to move towards 0. If the Fed doesn't raise the Fed Fund Rate soon (which it is unlikely to do) we can expect to see 5-year CD rates significantly below 3%,

Today's Highest Online CD Rates

Bank	Product Term	Interest Rate (APY)
Northern Bank Direct	1-Year	5.60% APY with $500 minimum
Finworth, a division of InsBank	1-Year	5.38% APY with $50,000 minimum
TotalDirect, a division of City National Bank of Florida	1-Year	5.35% APY with $25,000 minimum
Dollar Savings Direct, a division of Emigrant Bank	3-Year	5.00% APY with $1,000 minimum
First Internet Bank of Indiana	3-Year	4.66% APY with $1,000 minimum
IncredibleBank	3-Year	4.58% APY with $1,000 minimum
First Internet Bank of Indiana	5-Year	4.55% APY with $1,000 minimum
BMO Alto, a division of Bank of Montreal Harris	5-Year	4.50% APY with no minimum
Department of Commerce	5-Year	4.34% APY with $500 minimum

Bank

Product Term

Interest Rate (APY)

Northern Bank Direct

1-Year

5.60% APY with $500 minimum

Finworth, a division of InsBank

1-Year

5.38% APY with $50,000 minimum

TotalDirect, a division of City National Bank of Florida

1-Year

5.35% APY with $25,000 minimum