CD Rates Fall For 15th Straight Month

The Federal Reserve has just reiterated its determination to keep interest rates at record lows until the economy is not just growing, but creating enough jobs to drive the unemployment rate down.

With more than 15 million Americans out of work, we understand that the country can’t afford another jobless recovery like the ones that followed the last two recessions.

But that policy is making savers pay a frightful price as the returns on certificates of deposits continue their relentless, 15-month decline.

Bankrate’s weekly survey of large banks and thrifts taken Jan. 27 found the average annual yield for a:

3-month CD has fallen to 0.34%, down from 0.36% at the end of December. It’s the lowest average since the survey began tracking 3-month CD rates in March 1989.

6-month CD has fallen to 0.48%, down from 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 0.76%, down from 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 1.20%, down from 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 has fallen to 2.07%, down from 2.10% at the end of December. The 2.06% reached earlier in January was the lowest average rate since the survey began tracking 60-month CDs in January 1984.

With average rates like this you can’t settle for average returns.

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

Since mid-2009, the consensus among economists was that the unemployment rate would peak in February and show enough improvement by June for the Fed to ease up and allow interest rates to rise.

So it’s crunch time for those predictions.

If we don’t see some serious job creation over the next few months, it’s quite likely that the Fed would continue its aggressive intervention in the market through late summer or even fall.

The economy needs to create 120,000 jobs every month just to cope with all of the new entrants to the job market.

To do that, and put a significant number of those who lost their jobs during the recession back to work, it needs to be growing by at least 200,000 to 300,000 jobs a month by summer.