bank rates

2014 CD Rates: The Great Wait

Are banks throughout the country waiting for something?

We ask because CD rates have all but frozen in place for a full year now.

In fact, the first half of 2014 saw less movement in average CD rates than we’ve seen during any six-month stretch in the last three decades.

To reach this conclusion, we examined historical data for 1-year and 5-year certificates dating back to 1984 (and 3-year CD data to 2001).

We used weekly bank and thrift survey data from Bankrate Inc. as far back as the company computed averages for these terms, and we looked at the difference in CD rates from the first survey and the last survey in each six-month period.

Here’s what we found:

Average CD rates in 2014

Date 1-year CD 3-year CD 5-year CD
January 0.23% 0.48% 0.78%
June 0.23% 0.49% 0.79%

The six-month percentage change? 0%, 2.08% and 1.28% respectively. (Average rates this summer haven’t budged, either.)

July through December 2013 is the only other six-month stretch to come close matching the “stability” we’ve had in rates.

In fact, it’s much more typical to see volatility than stability.

When 5-year CD rates have increased over a half year, for example, they have increased on average 8.9% since 1984. When they’ve decreased, they’ve done so on average 10.31%.

This is yet another reminder that the typical CD rate has hit bottom and remains there.

And while the very best nationally available 5-year certificates have bounced back from their lows, other terms haven’t been so “quick” to rebound.

Compare the top offers in selected terms on our CD Rates Leaderboard on Aug. 14, 2013 and Aug. 14, 2014.

Top CD rates 2013-2014

Date 1-year CD 2-year CD 3-year CD
August 2013 1.05% 1.25% 1.50%
August 2014 1.10% 1.26% 1.46%

Stagnant. Static. In a holding pattern.

And to answer the question posed at the top of this post, it seems clear banks and credit unions are waiting for the Federal Reserve to make its move with interest rates before they make theirs.

The Fed isn’t expected to act until sometime in 2015, although there have been some vocal calls to push interest rates higher now.

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Comments (1)
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One Existing Comment
  1. Brian said:
    on August 15th at 10:55 am

    If anyone thinks rates are going up keep dreaming!
    The country is in a masked depression which is being smoked by keeping the stock market up and low rates for borrowing.
    The consumer is tapped out, were headed for major trouble.