bank rates

Highest CD Rates Roundup For Dec. 13

Bringing you the very best CD rates from credit unions and local banks.I wanted to dive in a bit more on the poll we launched this week asking readers how high CD rates have to climb before they will buy again.

First, thanks to all who participated. We’ve had a great response that I think demonstrates Americans have a hunger for safe, predictable investments.

As of this writing, the leading answer to the phrase “I’ll start buying CDs again when …” is “… rates hit 4%.”

Now, we’ve got a long way to go, I’m afraid, before we see an offer like that.

But, while this poll isn’t scientific, it might just speak to what a lot of savers are thinking right now. That’s because we haven’t stopped fleeing from CDs.

We posted the chart below on our poll post, but I thought it would be helpful to show it again.

Chart showing how much money is in CDs

That shows the amount of money in small-time deposits, Fed-speak for certificates of deposit with a value of less than $100,000.

Let’s dive in a bit more on the numbers.

Since deposits hit their peak on Dec. 22, 2008, at $1.46 trillion, they’ve fallen in 253 out of the last 258 weeks.

Or 98% of the time.

It’s no coincidence the start of this exodus coincides with the Federal Reserve’s move to cut the federal funds rate – the interest rate the central bank allows commercial banks to charge each other to borrow money on deposit with the Fed – to essentially 0%.

CD rates, which had fallen slightly throughout 2008, really began to nose-dive after the Fed’s action. Average 5-year CD rates fell from 3.25% APY at the start of December to 2.38% APY by the end of January 2009.

Of course, the fall hasn’t stopped. Today, the average 60-month CD pays 0.78% APY.

And the amount of money in certificates of deposit continues to fall as well. The latest Fed data show there’s just $538.8 million tied up in CDs, a decline of $923 million from the 2008 high.

It’s clear savers’ answer to the phrase “I’ll start buying CDs again …” isn’t “… now.”

Highest CD rates

This week, we added one deal to our list of the highest CD rates from credit unions and local banks:

  • First Commonwealth Federal Credit Union in Pennsylvania (www.firstcomcu.org) pays 1.20% APY on 14-month CDs with a $500 minimum deposit. Anyone in Pennsylvania or New Jersey can qualify for membership in this credit union by first joining the American Consumer Council.

We also saw rate cuts at two credit unions on our list.

Texas Workforce Credit Union cut its 36-month CD rate from 1.66% APY to 1.51% APY and its 24-month CD rate from 1.41% APY to 1.26% ABY.

Also in Texas, Suntide Credit Union cut its 24-month CD rate from 1.95% APY to 1.90% APY, its 12-month rate from 1.55% APY to 1.50% APY, and its 6-month CD rate from 1.15% APY to 1.10% APY.

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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