bank rates

Long-Term CD Rates Resume Decline

Long-term CD rates fell in October, undercutting hope that the sharp decline in savings rates that began with last year’s financial crisis might be over for at least some certificates of deposit.

The average return on 5-year CD rates had risen slightly in August and September.

Long-term CD rates fell in October, undercutting hope that the long slide might be bottoming out for at least some certificates of deposit.But this week’s retreat leaves the average just four-hundredths of a point above the record low of 2.15% reached in July.

Although the average return for 3-month, 6-month and 12-month CDs declined a little less than long-term rates during October, they’re ending the month at new record lows.

In discussing interest rates, economists refer to one-hundredth of a percentage point (0.01%) as a basis point, because it’s easier to discuss whole numbers. So we’ll use their terminology in reviewing the monthly results.

Bankrate’s weekly survey of large banks and thrifts taken Oct. 28 found the average annual yield for a:

3-month CD fell to 0.40% from 0.41% the previous week. It declined 3 basis points in October and has lost 82 basis points so far this year, an average of 8 basis points a month.

6-month CD fell to 0.58% from 0.59% the previous week. It declined 4 basis points in October and has lost 92 basis points so far this year, an average of 9 basis points a month.

1-year CD remained at 0.92% for the second week. It declined 3 basis points in October and has lost 96 basis points so far this year, an average of 10 basis points a month.

2-year CD fell to 1.40% from 1.41% the previous week. It declined 5 basis points in October and has lost 69 basis points so far this year, an average of 7 basis points a month.

5-year CD fell to 2.19% from 2.21% the previous week. It declined 6 basis points in October and has lost 56 basis points for the year, an average loss of 6 basis points a month.

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