bank rates

Nothing Slows Free Falling CD Rates

How depressing is this: CD rates declined for the 20th straight month in June.

The average return on four of the five certificates of deposit we track finished the month lower than they were at the end of May. The other was unchanged.

The average return on the most popular certificates of deposit has dropped for 20 straight months.All five of average CD rates entered July at record lows.

The Federal Reserve reiterated its intention to keep interest rates “exceptionally low” for an “extended period” last month.

The Fed’s rate-setting committee said the economic recovery has been slowed by the financial crisis in Europe, and there’s a growing concern that the anemic growth we’ve seen so far this year could be stalling out.

That means there’s no end in sight for these miserable savings rates.

Bankrate’s weekly survey of large banks and thrifts taken June 30, found the average annual yield for a:

3-month CD ended the month at 0.28%, the same as in May. But that’s down from 0.36% at the start of the year and remains the lowest average since the survey began tracking 3-month CD rates in March 1989.

6-month CD has fallen to 0.40%, down from 0.42% last month and 0.50% at the start of the year. It’s the lowest average since the survey began tracking 6-month CD rates in January 1984.

1-year CD has fallen to 0.69%, down from 0.70% last month and 0.82% at the start of the year. It’s the lowest average since the survey began tracking 12-month CD rates in October 1983.

2-year CD has fallen to 1.09%, down from 1.12% last month and 1.24% at the start of the year and is the lowest average since the survey began tracking 24-month CD rates in March 1989.

5-year CD declined to 2.00%, down from 2.08% last month and 2.10% at the start of the year. That’s the lowest average rate since the survey began tracking 60-month CDs in January 1984.

With average returns this low, you’ve got to take advantage of any better-than-average CD rates you can find in our database.

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