bank rates

CD Rates Roundup For May 31, 2013

Bringing you the very best CD rates from credit unions and local banks.

Fed Chairman Ben Bernanke certainly didn’t apologize for the pain he’s inflicting on savers during his congressional testimony last week.

But he offered an explanation of why the Federal Reserve must continue its unprecedented, five-year campaign to hold interest rates at record lows.

The government-controlled bank’s ultimate goal, Bernanke said, is to create “economic conditions consistent with sustainably higher interest rates.”

“Unfortunately, withdrawing policy accommodation at this juncture would be highly unlikely to produce such conditions,” he told the Joint Economic Committee. “A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further.”

So, if I understand Bernanke’s rationale, allowing interest rates to rise now might provide a short-term boost to our returns, but we’d suffer more in the long run when the economy faltered and interest rates fell again.

It seems that Ben is operating on the assumption that our recovery remains so fragile that even a small uptick in interest rates would send us reeling back into a contraction.

Let’s be clear.

The issue isn’t whether the Fed should have cut interest rates during the worst financial crisis since the Great Depression. That was absolutely the right course of action in 2008 and 2009.

The issue is whether the Fed should continue to pursue the same pedal-to-the-metal stimulus more than five years later.

The central bank doesn’t have to go straight from gas to slamming on the brakes. There’s a lot of room in between for Fed to explore — if it was willing to do so.

Can’t you work with us a little, Ben?

Would it be all that dangerous to let short-term interest rates rise a quarter point? Couldn’t we at least try it and see if the economy shudders and falters?

I have to think that a minimal boost in short-term interest rates would do more to help savers than damage the economy.

Out in the real world, we added one deal this week to our list of highest CD rates from credit unions and local banks.

Greater Springfield Credit Union is paying 1.76% APY on 48-month CDs with a $1,000 minimum deposit. Credit union membership is open to everyone who works, lives or attends school in Hampden or Hampshire counties in western Massachusetts.

Another credit union and one of the banks on our list raised rates this week:

  • Suntide Credit Union in Corpus Christi, Texas, continues to amaze. It’s now paying 2.35% APY on 2-year CDs, up from 2.15% APY, and 2.00% APY on 1-year CDs, up from 1.75% APY.
  • Doral Bank boosted the return on 3-year CDs from 1.55% APY to 1.60% APY.

There was one rate cut to report.

Security Service Federal Credit Union based in Salt Lake City reduced its return on 5-year CDs from 2.05% APY to 1.95% APY.

And finally, Keesler Federal Credit Union fell off our list of top local deals when it lowered its 5-year CD rates.

You’ll find the top-paying deals clearly marked on our highest CD rates page, showing where they are available, with a quick link back to the original post, which includes more information on the institution and its requirements.

We’ll update this page weekly, so you’ll always know what great deals are out there from credit unions and local banks.

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