bank rates

CD Rates Continue Long Slide In February

Most CD rates declined for the 16th straight month as the Federal Reserve stood by its policy to hold interest rates at record lows for the foreseeable future.

Four of the five certificates of deposit we track finished February lower than they were at the end of January.

CD Rates Continue Long Slide In FebruaryThe only exception was 5-year CDs, whose average rose slightly to finish the month exactly where it began the year.

It was only the second monthly increase we’ve seen since the financial crisis struck in October 2008 and CD rates began their relentless slide.

Bankrate’s weekly survey of large banks and thrifts taken Feb. 24 found the average annual yield for a:

3-month CD has fallen to 0.33%, down from 0.34% last month and 0.36% at the end of December. It reached a low of 0.32% on Feb. 10, the lowest average since the survey began tracking 3-month CD rates in March 1989.

6-month CD has fallen to 0.46%, down from 0.48% last month and 0.50% at the end of December. It’s the lowest average since the survey began tracking 6-month CD rates in January 1984.

1-year CD has fallen to 0.75%, down from 0.76% last month and 0.82% at the end of December. It’s the lowest average since the survey began tracking 12-month CD rates in October 1983.

2-year CD has fallen to 1.18%, down from 1.20% last month and 1.24% at the end of December. It’s the lowest average since the survey began tracking 24-month CD rates in March 1989.

5-year CD rose to 2.10%, up from 2.07% at the end of January and matching the average rate at the end of December. The 2.06% reached in January remains the lowest average rate since the survey began tracking 60-month CDs in January 1984.

The Federal Reserve boosted the interest rate that commercial banks must pay for emergency loans last week.

But that has no effect on the interest rate banks pay for deposits, and the government-controlled bank made it clear that the move doesn’t signal it’s ready to let those rates start rising again anytime soon.

While the economy is improving, Fed chief Ben Bernanke said in his semi-annual report to Congress on Wednesday, he still expects to hold the rates savers depend on at record lows for “an extended period.”

Until that policy changes, you can’t settle for average returns.

Use our database of CD rates to find and compare the best deals from scores of banks.

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