bank rates

Highest CD Rates Roundup For Oct. 3

Bringing you the very best CD rates from credit unions and local banks.The unemployment rate fell to a surprisingly low 5.9% in September, giving the Federal Reserve another reason to consider boosting interest rates sooner rather than later.

The Fed has driven short-term interest rates to record lows in an attempt to haul the economy out of the worst financial crisis and recession since the 1930s.

It’s done that by drastically reducing what’s called the federal funds rate, which is what commercial banks pay to borrow money from each other through the Fed.

Since that rate has been essentially zero since December 2008, the banks haven’t needed to pay us for deposits. For nearly six years, they’ve been able to get pretty much all of the money they need from the Fed, essentially for free.

With the economy clearly improving, most economists think the Fed will reverse that policy and begin raising the fed funds rate sometime in mid-2015.

But a recent survey of the Fed’s policy makers found that they don’t think the unemployment rate can’t fall any lower than 5% to 6% without triggering a rise in inflation.

Now that the jobless rate is within that range, could the Fed start pushing interest rates up a few months earlier?

That could give savers something to celebrate in early 2015. Any hope of a rate hike at one of the Fed’s last two policy meetings this year is probably unrealistic no matter how far the jobless rate drops.

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

  • Chartway Federal Credit Union in Virginia (www.chartway.com) pays 2.52% APY on 60-month CD rates with a $10,000 minimum deposit. Anyone can join this credit union by first making a $10 donation to the credit union’s philanthropic arm, the We Promise Foundation, which grants wishes of children suffering severe illness or hardship.
  • Citadel Federal Credit Union in Pennsylvania (www.citadelbanking.com) pays 2.00% APY on 48-month CDs and 2.40% APY on 60-month CDs, both with a $500 minimum deposit. Credit union membership is open to residents in the counties of Bucks, Chester, Delaware, Montgomery and Philadelphia, or in the city of Lancaster.

Advancial Federal Credit Union raised its 60-month rate from 2.38% APY to 2.52 APY, its 48-month rate from 2.00% APY to 2.12% APY and 36-month rate from 1.54% APY to 1.65% APY.

For the most part, membership is limited to members and employees of the credit union’s select employee groups, as well as their immediate family and household members. That list isn’t on the website, so a bank representative recommended calling if you live near a branch. Those are in Anchorage, Alaska; Hampton, New Jersey; Houston; Lafayette, Louisiana; and Oklahoma City.

Unfortunately, this week we saw a number of cuts to existing deals on our list.

HomeBanc in Florida discontinued its 3-month CD specials that paid 1.40% APY.

Sun Community Federal Credit Union in California cut its 6-month CD to 0.85% APY from 1.11% APY.

TLC Community Bank in Michigan discontinued both its 50-month and 30-month CD specials. The 50-month CD had paid 2.02% APY, while the 30-month CD paid 1.76% APY.

The deals from these three institutions all have been removed from our list.

We’ll update our page listing the highest CD rates weekly, so you’ll always know what great deals are out there from credit unions and local banks.

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