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CD Rates Index – Week of October 29, 2012

Banking, CDs

Rates on savings accounts, money markets, and other deposit accounts are scarily low (pun intended). Unfortunately, even CD specials are not carrying much weight as slight loan demand, federal policy and other factors push rates downwards at many banks and credit unions around the United States. This week, the average promotional rate offered for a 12 month CD dropped by 8 basis points while most rates remained stagnant or declined just slightly.

 

Despite the weak yields, consumers who spend some time shopping to find the best CD rates possible may be able to avoid the worst of it.

Happy Halloween!

Reference Table:

Length of Term (months) Average Promo APY Average Reg. APY
3 0.28% 0.18%
6 0.40% 0.28%
12 0.53% 0.42%
18 0.54% 0.49%
24 0.60% 0.64%
30 0.86% 0.67%
36 0.85% 0.85%
48 0.96% 1.02%
60 1.37% 1.26%

Bonus CD rates that beat the average

Short-term CDs

Institution State Term APY Notes
Bank Rhode Island RI 10 months 1.10% Min $25,000
Amalgamated Bank CA, DC, NJ, NY 7 months 0.75% Min $500
TotalBank FL 5 months 0.75% New Money Only; Min $1,000

1-2 year CDs

Institution State Term APY Notes
Co-Op Credit Union WI 12 months 1.25% Min $1,000
Tulsa Teachers Credit Union OK 19 months 1.15% Min $1,000
Sovereign Bank NJ 15 months 1.01% Available with Premier Checking; Min $1,000

3+ year CDs

Institution State Term APY Notes
Universal 1 Credit Union, Inc GA, OH 1 year 1.92% Min $1,000
Wildfire Credit Union MI 73 months 1.75% Min $500
Alabama Telco Credit Union AL 3 years 1.01% Rising Rate CD; Min $5,000

Note: Promotional rates are subject to change. Make sure to confirm CD rates with your bank or credit union.

A Refresher: Why Promotional/Special Rates Make a Difference

CD rates are historically low, and are likely to remain so for the near future. Yields are primarily a product of two forces that are out of a consumer’s control: (1) economic environment and  (2) the fact that longer-term investments will demand higher returns.

There is however, one factor that offers more flexibility for consumers: individual banks and credit unions each have their own capital strategies, which cause them to offer different promotional rates for certain CDs (in an effort to drive  balances towards the most ideal deposit products for them).   Such promotional/bonus rates can easily outperform typical accounts of a comparable term and are worth looking for to help boost returns.