bank rates

Top Return Falls For 2-, 3- And 5-Year CDs

Two top-paying banks have shaken up our national CD rankings today – and not in a good way.

E-Loan – in its first rate adjustment since dramatically commanding the lead across five terms in July – lowered its 2-, 3- and 5-year yields today as follows:

  • 24-month rate reduced from 1.52% to 1.50% APY.
  • 36-month rate reduced from 1.85% to 1.75% APY.
  • 60-month rate reduced from 2.45% to 2.30% APY.

An online portal of Popular Community Bank, E-Loan’s decreases were strategic, retreating only as far as it could while still retaining the sole lead in each term.

But that doesn’t change the sad fact that the top nationally available bank return for those three terms is now lower on our CD Rates Leaderboard than it was yesterday.

Adding insult to injury, second-place returns also suffered a blow, as EverBank made a slew of cuts to its own rate sheet today:

  • 12-month rate reduced from 1.30% to 1.06% APY.
  • 24-month rate reduced from 1.47% to 1.15% APY.
  • 36-month rate reduced from 1.70% to 1.42% APY.
  • 48-month rate reduced from 2.00% to 1.67% APY.
  • 60-month rate reduced from 2.25% to 1.88% APY.

For the past week, EverBank had the distinct status of either sharing the lead or second place across all seven terms we track for our Leaderboard.

But following its long-established history of modifying its rate sheet virtually every Friday – not infrequently moving up and down in large swings – its move today reduces its footprint to first or second place in only the 3- and 6-month terms.

Such significant downward pressure from two top players in a single day is a bitter pill to swallow, as it defies expectations generated by the Federal Reserve’s move to start pushing interest rates higher.

Over the past month we’ve been waiting for commercial banks to follow the Fed’s lead and begin boosting the returns they pay for all types of deposits, including certificates of deposits.

After eight years of record-low yields, we had hoped to spend a joyous January telling you about one better-paying CD after another.

But the banks are betting that a wobbly global economy, reeling from falling oil prices and China’s financial problems, has the Fed rethinking how far and how fast it wants to push up rates.

Until they see and hear more, the banks are in no rush to boost the yields on our deposits.

Perhaps we’ll all have a better idea of what the Fed intends to do after its rate-setting committee meets next week.

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