bank rates

CD Rates Hit New Lows This Week

CD rates took another tumble this week, with average 3-month, 6-month and 12-month rates all reaching new record lows.

The returns on 3-month, 6-month and 12-month certificates of deposit fell to new record lows in this week's survey of major banks and thrifts.Although the Federal Reserve’s rate-setting committee meets next week, there’s almost no chance it will do anything to reverse the decline in saving rates that began almost two years ago..

Bankrate’s weekly survey of large banks and thrifts taken Sept. 16 found the average annual yield for a:

3-month CD fell to 0.43% from 0.45% the previous week. That’s the lowest average since the survey began tracking 3-month CD rates in March 1989.

6-month CD fell to 0.62% from 0.66% — the lowest average since the survey began tracking 6-month CD rates in January 1984.

1-year CD fell to 0.94% from 0.98% — the lowest average since the survey began tracking 12-month CD rates in October 1983.

2-year CD fell to 1.43% from 1.46% — the lowest average rate since August 2003.

5-year CD fell to 2.19% from 2.23%. That’s still slightly above the 2.15% reached in July, which was lowest average rate since the survey began tracking 60-month CDs in January 1984.

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

The Federal Reserve has been pushing interest rates artificially low as part of its effort to rescue the banking industry from its reckless lending binge of the early 2000s and the recession it created.

To do that, the government-controlled bank has dropped what it charges commercial banks to borrow money to rock-bottom levels — 0% to 0.25% for overnight loans.

With the government providing so much cheap money, the banks can pay next to nothing on certificates of deposit, money market and savings accounts.

The best we can hope for at next week’s meeting is a decision to stop buying billions of dollars in mortgage debt and Treasury bills, which has been used to hold down rates on home loans and government debt.

That will almost certainly have to happen before the Fed will even consider raising the overnight rate.

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