bank rates

Highest CD Rates Roundup For May 17

Bringing you the very best CD rates from credit unions and local banks.What happens if interest rates stay low forever?

I suppose you’re in luck if this dreadful thought has ever crossed your mind. That’s because new research tries to answer the question.

The research does not suggest an apocalyptic scenario, but it is fairly frightening nonetheless.

The Employee Benefit Research Institute in Washington, D.C., says if record-low interest rates were made permanent, about a quarter of all baby boomers and Gen-Xers who would have had “adequate” retirement income will instead run “short” of money.

The theory assumes retirement income covers 100% of simulated retirement expenses, research director Jack VanDerhei said during a public policy forum this month.

But “there’s a smaller impact” if people begin to cut back on spending as they’re running low on money, VanDerhei said.

The good news?

This scenario is historically unlikely.

“Interest rates have never stayed in one place forever, and there’s no reason to expect the current scenario will last,” writes Reuters columnist Linda Stern. “But the EBRI research is instructive, and even a short-term loss of yield can hurt when health care costs continue to outstrip the Consumer Price Index.”

The better news? When interest rates recover, our long-term savings will as well.

But that’s in some hopefully not too distant future. For now, we have to settle for more risk or lower savings rates.

We added two deals to our list of the highest CD rates from credit unions and local banks:

  • First Imperial Credit Union (www.ficu.com) in California pays 1.30% APY on 24-month CDs with a $500 minimum deposit. Anyone who works, lives or worships in the Imperial Valley near El Centro, Calif., can join.
  • Freedom Bank (www.freedombanknj.com) in New Jersey pays 1.31% APY on 24-month CDs with a $500 minimum deposit. You have to be a New Jersey resident to buy Freedom Bank’s certificates of deposit and do so in person at a branch. There are two branches, at 550 Kinderkamack Rd. in Oradell and 6812 Park Ave. in Guttenberg.

Unlike last week, this was a quiet week for rate cuts. There was just one of note.

Merrimack Valley Federal Credit Union in Massachusetts cut its 60-month CD rate from 1.95% APY to 1.85% APY. It also cut its 36-month CD rate from 1.45% APY to 1.35% APY.

You’ll find all 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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