bank rates

CD Rates End Month At Record Lows

Bankaholic.com CD rates almost held their own this week, but logged yet another decline for the month of July.

With every rate we track now at — or near — record lows, you’d think the carnage would have to end soon. And the rate of decline did seem to slow in July.

But to use those numbers to claim the bottom is in sight would be as much wishful thinking as sound analysis.

Bankrate’s weekly survey of large banks and thrifts taken July 29 found the average annual yield for a:

Three-month CD declined to 0.50% from 0.51% the previous week. That’s the lowest average since Bankrate began tracking 3-month CD rates in March 1989.

Six-month CD fell to 0.76% from 0.77% — the lowest average since Bankrate began tracking 6-month CD rates in January 1984.

One-year CD fell to 1.07% from 1.08% — approaching the record low of 1.03% set in July 2003.

Two-year CD fell to 1.51% from 1.52%. The average rate declined to 1.46% in June, the lowest 24-month CDs have been since August 2003.

Five-year CD held at 2.16% for the second week. That’s only a tick above the 2.15% reached earlier in July, which was lowest average rate since Bankrate began tracking 60-month CDs in January 1984.

Of course you can earn more than that if you use our extensive database of CD rates to search for better-than-average deals.

But the sorry fact is that the best rates you’ll find anywhere right now are lower than the average rates we were enjoying last summer and fall.

Short-term rates have fallen further and faster than long-term rates, with the average rate for 12-month certificates of deposit declining the most.

Here’s how far the average rate for the five popular CD terms we track declined in July, and the first seven months of the year.

In discussing interest rates, economists refer to one-hundredth of a percentage point (0.01%) as a basis point, because it’s easier to discuss whole numbers. So that’s what we’ll their terminology.

Three-month CDs declined 8 basis points in July and have fallen72 basis points so far this year, an average of 10 basis points a month.

Six-month CDs declined 11 basis points in July and have fallen 72 basis points so far this year, an average of 10 basis points a month.

One-year CDs declined 9 basis points in July and have fallen 81 basis points so far this year, an average of 11 basis points a month.

Two-year CDs declined 4 basis points in July and have fallen 59 basis points so far this year, an average of 8 basis points a month.

Five-year CDs declined 2 basis points in July and have fallen 53 basis points so far this year, an average of 7 basis points a month.

We’ll see what August brings.

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  1. don kane said:
    on July 31st at 09:11 pm

    Does anyone believe that we seniors who gave the banks huge sums of CD money in hopes of earning enough interest to supplement Social Security are going to run out and SPEND? We give banks our money, and the Fed gives banks our money at the same time, only the Fed charges them nothing, and they give us CD investors crumbs!