bank rates

There’s A New Top Bank In 36-Month CDs But Rates Still Stuck In Neutral

We’re still waiting for 36-month CDs to show the kind of improvement we’ve seen in longer-term investments.

Or any improvement, really.

The best deals on 5-year CDs are up more than a half point over the past year or so. We haven’t seen returns this lucrative since September 2011.

But the top nationally available 36-month CD rates are still 1.45% APY to 1.50% APY.

That’s right where they were this time last year and considerably less than you would have found in the fall of 2011.

Yes, there were those three glorious days at the end of September when Presidential Bank dangled that 1.75% deal in front of us. But it was the brief, off-the-wall exception that proved the rule – 3-year CD rates are stuck.

Only 3-month CDs have been as disappointing as 36-month CDs on our CD Rates Leaderboard.

Highest CD Rates Roundup For October 17

Check out all the top returns we’ve found at credit unions and community banks across the country. These local deals pay more than the best nationally available CD rates.

EverBank had been the leader in this category since Oct. 1. But the primarily online bank with 11 branches in Florida reduced its return from 1.51% APY to 1.24% APY today.

That boosted State Farm Bank to the top of our rankings. The online bank of the big insurance company running the goofy ads with Green Bay Packers quarterback Aaron Rodgers continues to pay 1.50% APY with a $500 minimum deposit.

Four banks also continue to offer the second-highest rate of 1.45% APY:

  • BankDirect, the online division of Texas Capital Bank, which has 12 locations in Texas, requires a $10,000 minimum deposit.
  • Barclays, the online American operation of the worldwide British bank with more than $2 trillion in assets, has no minimum balance requirement.
  • Nationwide Bank, the online bank owned by Nationwide Mutual Insurance Co., requires a $500 minimum deposit. (You can earn 1.50% APY with a $100,000 investment.)
  • Sallie Mae Bank, an online bank owned by the student lender, requires a $2,500 minimum deposit.

We currently track the best nationally available 36-month CD rates from 24 banks over on our Finance blog.

These banks qualify for our rankings by imposing no geographic restrictions on who can buy their certificates of deposit and sell those investments online or through the mail.

Compare these returns with the best CD rates from scores of banks in your area.

As you can see on our chart of the Highest CD Rates of local deals from community banks and credit unions, there are many 36-month specials that beat the best national rates.

All of these deals beat the current average for 36-month CDs, which is 0.50% APY, according to our most recent survey of major banks and thrifts.

Historically, savers could expect to earn 3.5% or 4% on these CDs. But the Federal Reserve has spent the past six years driving down short-term interest rates to boost the economy.

Now the Fed’s rate-setting committee has indicated it will reverse course and start pushing interest rates higher sometime next year.

Documents released after its September meeting project that rates should be 3 points higher by the time a 3-year CD that’s bought this fall matures in 2017.

If that turns out to be the case, it will have been nearly a decade of lost income for savers by the time reasonable rates are back.

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