That’s a more optimistic view than we’ve seen from the Fed. And it’s also the magic number Fed Chairman Ben Bernanke has used when discussing when the central bank will start to think about raising the federal funds rate — the interest rate the Federal Reserve charges commercial banks to borrow money — from near zero.
This is how the Fed influences how much savers earn on their deposits. If banks get essentially free money from the government, there’s no need to pay consumers for their deposits.
Is this new employment projection good news for savers?
Bernanke and Co. have said repeatedly — and emphasized again this week — that the Fed’s rate-setting committee won’t automatically begin boosting rates once unemployment falls to 6.5%.
Calling the Fed’s targets “thresholds, not triggers,” Bernanke told reporters that any rate increase is “still far in the future.”
Indeed, 14 of the 19 Federal Open Market Committee participants polled this week believe the first rate increase won’t occur until 2015, which is essentially what the Fed has been saying for the past year.
So we still have a long time to wait.
As for the highest CD rates on our list of credit unions and local banks, it was a fairly quiet week.
We added two deals:
- Dime Bank (www.dime-bank.com) pays 2.00% APY with a $500 minimum deposit on 6-year bump-up CDs. You have to live in the area Dime Bank serves to buy these certificates of deposit and do so in person. Dime Bank has 11 locations in East Lyme, Ledyard Center, New London, Norwich, Stonington, Taftville and Uncasville, Conn., and Westerly, R.I.
- Transportation Federal Credit Union (www.transfcu.org) pays 1.81% APY on 60-month CDs with a $1,000 minimum deposit. Anyone in the Washington, D.C., area can join the credit union by first becoming a member of the American Consumer Council, which doesn’t charge a fee if you’re also joining one of its participating credit unions.
For the second time in two weeks, San Antonio Federal Credit Union has increased CD rates. It bumped its 10-year CD rate to 2.45% APY from 2.30% APY.
We removed from our list the 60-month deal from City County Credit Union in Florida, which fell to 1.51% APY from 2.02% 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.