bank rates

Highest CD Rates Roundup for Nov. 23

Plunging off the fiscal cliff could leave us stuck with record-low interest rates for longer than we expect.
Bringing you the very best CD rates from credit unions and local banks.

How so?

The fiscal cliff refers to big changes in federal taxes and spending that are scheduled to take effect around Jan. 1 if President Obama and Republicans in Congress can’t agree on a better plan to reduce the federal deficit.

The economy is currently growing at about 2% a year. The spending cuts and tax increases that kick in next year are projected to knock 3% to 4% off the 2013 growth rate.

That’s why most economists think we’re headed for a cliff-induced downturn if something isn’t done.

While such a contraction would probably be mild and short, any hiccup in our long, slow recovery from the Great Recession would provide the Federal Reserve with another excuse to hold interest rates at record lows beyond its current target of mid-2015.

Federal Reserve Vice Chair Janet Yellen is already making noises about postponing any rate hikes until early 2016 — and nothing bad has happened yet.

In fact, the conciliatory public statements Democrats and Republicans made after the election were encouraging.

But Politico says the first meeting between White House and senior Republican staffers last Friday “left both sides pessimistic about their ability to reach a quick deal.”

Sources told the website that the GOP’s opening offer “would freeze the Bush-era tax rates, change the inflation calculator for entitlement programs, keep the estate tax at 2012 levels and authorize a major overhaul of the Tax Code – although they did not provide a revenue target.”

That’s pretty much been the Republican position all along, so no new concessions to jump-start the talks there.

Then House Majority Leader John Boehner wrote an opinion piece for the Wednesday Cincinnati Enquirer in which he argued the country cannot afford the Democrats’ 2010 health care reform law.

“That’s why I’ve been clear that the law has to stay on the table as both parties discuss ways to solve our nation’s massive debt challenge,” Boehner wrote.

Now the fate of Obamacare has to be part of these negotiations, too?

“This is a complete nonstarter and a clumsy starting point for negotiations,” Jim Kessler, senior vice president for policy at centrist think-tank Third Way told the Huffington Post today.

Bottom line: I see no evidence that the political gridlock in Washington is easing.

Perhaps we’ll get some more encouraging reports when the cliff talks resume next week.

For now anyway, we have a couple of good additions to our list of highest CD rates from credit unions and local banks:

  • Department of Commerce FCU is paying 2.00% APY on CDs of 60 to 84 months. Membership is open to anyone who lives or works in Washington, D.C., or is employed by the Department of Commerce (with a few exceptions listed on the website) or the National Oceanic and Atmospheric Administration.
  • American Airlines Federal Credit Union is paying 1.51% on 3-year CDs and 2.27% on 5-year CDS. Pretty much anyone who works in the air transport industry is eligible to join.

Dropping off our list were Randolph Bank, which ended its 5-year CD special, and Resource One Credit Union, which cut its return on 60-month CDs from 2.00% to 1.60%.

You’ll find all the top-paying deals clearly marked on our highest CD rates page, showing where they’re 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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