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Top 6-Month CD Rates Turn For The Worse

Posted in CD Rates by RateRunner
November 9, 2009 11:27 AM - 1 Comments

Finding good deals on any certificate of deposit is a chore, but 6-month CD rates have been particularly hard hit.

Just five weeks ago, our October ranking of the best 6-month CDsFinding good deals on any certificate of deposit is a chore, but 6-month CD rates have been particularly hard hit. was led by H&R Block Bank’s 2.00% APY.

Now Block is paying 1.00% APY.

Country Bank has cut its rate from 1.80% APY to 1.60% APY and fallen out of the top three. Even Ascencia Bank, the lone holdover in our October rankings, has dropped its rate.

The new leader is First Century Bank, which has three branches in the Atlanta area.

First Century does not post rates on its Web site, but as of this morning it’s paying 1.75% APY — a quarter-point lower than the top rate in October — with a $10,000 minimum deposit.

The other top 6-month CD rates in our November rankings are also down from last month:

1.63% APY with a $500 minimum from Ascencia Bank, the Louisville-based online division of Porter Bancorp, Inc.

1.62% APY with a $3,000 minimum from newdominionDIRECT.com, the online division of NewDominion Bank in Charlotte, N.C.

As disappointing as that is, all of those banks are paying three-times more than the average rate on 6-month CDs, which fell to a record-low 0.57% last week.

Average 6-Month CD Rates

Click here to compare these rates with the best CD rates from dozens of other banks in our extensive database.

This CD calculator will show you the dollars-and-cents return for any certificate of deposit, regardless of size, interest rate or term.

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  1. Jonathan Edelfelt said:
    on November 14th at 11:47 pm

    A recent trip to my credit union to purchase a CD was a surprise. A 3-month CD yielded a measly 1.32 percent. A 5 -year CD wasn’t much better at 3.43 percent. But these low rates got me thinking about another rate and that’s the inflation rate. The annualized inflation rate for the month of September 2009 was -1.3 percent. That “minus” means that goods and services cost an annualized 1.3 percent less in September 2009 than they did the year before. So if I had a 3-month CD which paid me an annualized rate of 1.32 percent in this inflation environment, my “real” annualized yield for the month of September 2009 would be 2.62 percent (i.e., 1.32-(-1.3)= 2.62). If I had a 5-year CD my “real” annualized yield for the month of September 2009 would be 4.73 percent. Not bad!

    Consider the same CD in January 2006. According to government statistics (the Federal Reserve’s H.15 publication), in January 2006 a 3-month CD yielded 4.56 percent. That month the inflation rate was 4 percent, meaning that the saver’s “real” annualized yield for that month was only .56 percent.

    So the low CD rates offered by banks and credit unions aren’t as bad as the seem at first blush. In addition, when you consider the taxes you pay on your returns, today’s inflation (or rather, deflation) environment is even better.

    Do I have this math all wrong? It seems to me that 2009 will turn out to be a good year for CD investors (assuming, of course, that the inflation rate (or, rather, the deflation rate) doesn’t change.

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