bank rates

Highest CD Rates Roundup For Oct. 11

Bringing you the very best CD rates from credit unions and local banks.Janet Yellen has just been nominated to succeed Ben Bernanke as the chairman of the Federal Reserve. Savers should cheer, right?

Not so fast.

No? So what should we expect?

The depressed savings rates we’ve been living with since the Great Recession will probably continue. Yellen, the vice chair of the Federal Reserve Board, was one of the architects of the policies that have led us here.

From Bloomberg:

“As the Fed’s No. 2 official, she has articulated the case for maintaining highly accommodative monetary policy. In a series of 2012 speeches, she outlined why interest rates could remain near zero into late 2015, and in a 2011 speech she justified the Fed’s first two rounds of large-scale asset purchases with an estimate that the programs would create 3 million jobs.”

Image of Janet Yellen, President Obama's nominee for Federal Reserve chair.But hasn’t there been pressure building for the Fed to begin winding down efforts to prop up the economy?

Yes, but Yellen has so far convinced other board members it’s too early to begin reducing asset purchases, which is one of the tools the Fed uses to manipulate interest rates.

From The New York Times:

“Last month, despite mounting internal pressure to scale back the bond purchases, Ms. Yellen and her allies prevailed again. The Fed surprised investors by announcing that it would postpone any retreat as a renewal of Washington’s episodic fiscal crisis once again threatened the recovery.”

So is there anything good savers can take from President Obama’s nomination?

Maybe. One of the more frustrating aspects of Bernanke’s failed efforts at transparency is just how often the goal post has been moved for savers.

Remember, in August 2011, the Fed said it would hold short-term interest rates at record lows “at least through mid-2013.”

Just five months later, the target was moved to “late 2014,” then last fall to “mid-2015.” Most board members continue to predict the Fed’s rate-setting committee finally, slowly will begin raising the federal funds rate, which influences short-term savings rates, in 2015.

This constant shifting of target dates has been maddening. But Yellen apparently favors “a predictable approach to steering the nation’s economy,” according to The New York Times:

“In speeches in 2012, for instance, she talked about the virtues of using a mathematical formula to help determine when the central bank should raise or lower interest rates. Plug in economic growth, inflation and the like – and you have a decent guidepost for what policy should look like.”

Good. So we can all circle mid-2015 on our calendars?

Maybe not. Some speculate interest rates won’t begin increasing for several more years – or beyond.

From Bloomberg Businessweek:

“In a note sent to clients Tuesday night, Goldman Sachs’s team of economists laid out the case for why they think the Federal Reserve won’t begin to raise rates until 2016. Their rationale boils down to two words: Janet Yellen, whose nomination to be the next chairman of the Fed has just occurred.”

Oof. Let’s talk about today’s best CD rates instead.

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

  • South Florida Federal Credit Union (www.southfloridafcu.com) pays 1.26% APY on 12-month CDs with a $200 minimum deposit. Membership is open to select employer groups in the Miami area as well as some Miami neighborhoods. Check the website for membership details.
  • Tri-Rivers Federal Credit Union in Alabama pays 1.50% APY on 18-month CDs with a $500 minimum purchase. Membership is open to residents of in the counties of Autauga, Butler, Crenshaw, Elmore, Lowndes, Macon or Montgomery.
  • Department of Commerce Federal Creidt Union (www.docfcu.org ) raised its 60-month rate from 2.05% to 2.10%. Membership is open to residents of Washington, D.C., and employees of the Department of Commerce and NOAA.

Crescent Bank & Trust in Louisiana ended odd-term specials on 35- and 44-month CDs, so they were removed from the list.

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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