Top CD Rates Unchanged - 5 Year CD at 3.50% APY and 3 Year CD at 2.81% APY

Average CD rates showed minor downward movement over the past week.

The average 1-year CD rate remained flat at 1.83% APY. The top rate remains at 2% APY and is offered by First City Bank. First City is offering a top rate but be sure to stay under FDIC insurance limits - it is rated as 0 stars according to Bauer Financial for its safety and soundness.

The average 3-year CD rate dropped by 3 basis points from 2.65% APY to 2.62% APY. USAA Federal Savings Bank continued to have the top rate with a 2.81% APY 3-year CD. The minimum deposit for that rate is $175,000. While you need a military connection to quality for their loan and insurance products, you do not need one to take advantage of USAA deposit products. In the banking world, USAA is highly regarded for its banking products and services.

The average 5-year CD dropped 2 basis points from 3.34% APY to 3.31% APY. BankUnited continues to have the top rate at 3.50%. Everbank continues to offer the next highest rate at 3.47% APY.

The chart below shows that CD rates have largely stabilized although there is still a slight drift down in short term rates and savings accounts.

As we noted last week, the spread between short term and longer term deposits remains near record highs, although it dropped very slightly this week (Spread Between Savings Rates and CD Rates Hits Record High).

The elevated ratio means it may be worth taking a look at a longer-term CD, especially one that doesn't have an onerous early-withdrawal penalty. You can now earn 1.5 percentage points more by opening a 5 year CD versus a 1-year CD. If interest rates stay low for the next couple of years, as is possible, then perhaps this elevated spread makes opening the account worth it.