bank rates

Highest CD Rates Roundup For Jan. 3

Bringing you the very best CD rates from credit unions and local banks.After falling from a two-year high set in September, 5-year Treasury yields are on the rise again.

This is important given the historical correlation between Treasury yields and 5-year certificate of deposit rates.

As we mentioned in a post last summer, the difference between Treasury yields and average 60-month CD rates is rarely as large as it has been recently, offering a possible signal that long-term CD rates may be in store for an increase.

chart showing treasury yields vs. average 5-year cds

On Thursday, the 5-year Treasury yield was 1.72%, while the average 60-month CD paid 0.78% APY. Since late 2000, we’ve seen a gap this large less than 5% of the time.

And The Wall Street Journal reported this week that analysts expect bond yields to rise “at a gradual pace” in 2014.

We’ll see if that translates into higher average CD rates. Since Treasurys bottomed out in early May, yields have more than doubled, while average 60-month CD rates have remained essentially flat.

Still, we’ve seen the top nationally available CD rates increase quite a bit during that time. Today, for example, there are nine banks that offer 5-year CDs paying at least 2% to savers everywhere.

And the big news, of course, comes from Pentagon Federal Credit Union, which extended its 3.04% APY 5-year CD offer into a second month.

Highest CD Rates

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

  • Melrose Credit Union in New York City (www.melrosecu.org) pays 1.61% APY on 36-month CDs, 1.36% APY on 24-month CDs and 1.10% APY on 12-month CDs all with a $5,000 minimum deposit. Credit union membership is open to anyone but requires a $1 membership fee and a $25 deposit in a savings account.
  • Xceed Financial Credit Union with 15 offices on the East and West coasts (www.xfcu.org) pays 1.00% APY on 7-month CDs and 1.25% APY on 19-month CDs with a $500 minimum deposit. Anyone can join this credit union by first becoming a member of one of six organizations listed on its website. The least expensive is the Friends of the Webster Public Library, which supports the community library in Webster, N.Y., and has a membership fee of just $8, or $5 if you’re older than 60.

We saw just a few changes among the deals already on our list.

Pioneer Valley Federal Credit Union in Massachusetts is no longer offering its 9-month, 1.90% APY anniversary special and has been removed from the list.

Bayer Heritage Federal Credit Union, with 10 Eastern U.S. branches, cut its 5-year CD rates from 2.40% APY to 2.15% APY and its 48-month CD rates from 2.15% APY to 1.89% APY. Both have been removed from our list.

Michigan Schools & Government Credit Union discontinued its 26-month CD special.

And the 11-month CD special from Regal Financial Bank in Seattle has expired.

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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