CIT Bank today raised the rate on its online savings account from 0.90% APY to 0.95% APY on balances above $25,000. For those with balances under $25,000, the rate increased from 0.85% to 0.90% APY. This moves continues to keep CIT close to the top online savings account rate in the country according to BestCashCow data.
This week has been a relatively active week for bank rate increases. GE Capital Retail Bank raised the rate on two CD terms:
- 60 Mo CD 100K from 2.05% APY to 2.15% on GE Capital Retail Bank
- 48 Mo CD 100K from 1.70% to 1.80% on GE Capital Retail Bank
In addition, Doral Direct increased the rates every so slightly on two of their CD terms:
- 36 Mo CD 0.5K from 1.20% to 1.21% on Doral Direct
- 48 Mo CD 0.5K from 1.32% to 1.33% on Doral Direct
Overall, rates on online savings accounts and longer-term CDs have been rising while the yields on shorter-term CDs continue to gradually drift down. The top, nationally available 1 year CD is Pentagon Federal Credit Union at 1.16% APY. Is the extra .21% in yield worth it to lock money up? I don't think so. Rates are moving up and it's possible by year end online savings account rates could be close to 1.16% APY anyway.
The unemployment rate now stands at 6.6%. The Fed has initially said that it would keep the Fed Funds rate low until unemployment reached 6.5%. So, we are close. It's clear from the recent rise in longer-term CDs, mortgage rates, and online savings account rates, that the long decline in bank rates is over. Barring any economic, political, or natural catastrophe, we are now entering a rising rate environment. For more on my thoughts about the nature of this enviroment, please read my 2014 Savings Rate Outlook.