bank rates

Top National 48- And 60-Month CDs Pay 1.85% And 2.27%, Respectively

First Internet Bank of Indiana today surrendered two of the three leads it had been holding on our CD Rates Leaderboard of the top nationally available bank returns.

It lowered its 48-month yield from 1.87% to 1.81% APY, allowing Nationwide Bank’s
1.85% APY rate to step into the top spot.

Its 60-month return took the other hit, dropping from 2.27% to 2.22% APY. There it had been sharing the lead, so the 2.27% APY is still the top rate, but now offered solely by State Bank of India – New York.

It’s all further evidence of banks shying away from locking long-term yields until they know more about what the Federal Reserve will or won’t do to rates in 2016.

Before the Fed’s hike in mid-December, six national banks were paying a 48-month rate better than 1.85%, with three paying 2.00% APY. Today we’re down to none above 1.85%.

Similarly, you could earn 2.25% or better from five banks’ 60-month certificates before the Fed hike. Today? Only one bank will pay you that much.

So what’s a CD saver to do when long-term yields are even more disappointing now than before the Fed’s increase?

One answer is to stick to short-term certificates for now, until the Fed has made enough hikes to bring long-term returns up. Bankrate’s extensive database of the day’s best CD rates is always a smart place to make sure you’re finding the best national yield possible.

Second, you may qualify for a credit union or community bank certificate that outpays the national players. Our constantly updated roundup of the country’s best local and regional CDs currently includes more than 50 such deals ranging from 48 to 60 months.

Lastly, if you still feel compelled to lock in a long-term certificate of deposit, aim to do so with a bank that imposes the most reasonable early-withdrawal penalty you can find. See our recent analysis to find out which banks’ penalties are the cheapest and which to avoid.

The Fed will meet again next week, announcing its decision on rates March 16.

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