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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Survey of the Best CD Rates for September 30, 2011


Survey of the Best CD Rates for September 30, 2011

I was hoping to add a new credit union to my survey of the best nationally available CD rates, but the rates didn't last. On Monday I reported on the high CD rates at US Senate Federal Credit Union. In the previous week, a reader found an easy way that anyone could qualify. The credit union was offering rates as high as 3.33% APY for a 5-year term. I had warned on Monday that these rates may fall in October. Unfortunately, that is what happened. The credit union just posted lower rates late this afternoon. The top 5-year CD APY is now only 2.43%. That's still a competitive rate, but there are several all-access credit unions with higher rates. Hopefully, those rates will hold up next week as credit unions post their new October rates.

Several banks and credit unions didn't wait for October to cut rates. CNB Bank Direct and Connexus Credit Union made big cuts. Ally Bank cut its 11-month No-Penalty CD APY from 1.02% to 1.00%. However, Ally's 5-year CD rate held at 2.04% APY.

The 1-year CD is often the most popular term for savers. However, with the rates so low, you have to wonder if there's any reason to open a 1-year CD instead of just leaving your money in a savings account. The best nationally avaialable 1-year CD rate at a bank is now just 1.15% APY at Doral Bank Direct, and the best at an all-access credit union is 1.30% APY ($25K minimum) at Alliant Credit Union. The savings account rates may fall over the next year, but even if they do, the difference in interest won't be much. For example, if the Alliant savings account APY falls from 1.15% to 0.65% over the next year, the average APY for the year would be about 0.90%. That's 40 basis points under the 1-year APY. If you deposit $25,000, the total interest difference would be about $100.

If you want a higher interest rate, you'll need to go for a longer term. Unfortunately, 5-year CD rates are falling. The highest nationally available 5-year CD rate at a bank is now only 2.25% APY at AmTrust Direct. There are still several all-access credit unions with much higher rates, but I have a feeling some of these rates are likely to fall in October.

Even though there are some risks that an institution may increase the early withdrawal penalty, long-term CDs can be a reasonable strategy in today's awful interest rate environment. If rates shoot up in the next few years, you can make an early withdrawal. If the penalty is reasonable, you will still come out better than if you had chosen a short-term CD. In the lists below, I've included a few long-term CDs in the short-term CD lists. These long-term CDs have small early withdrawal penalties, and due to these small penalties, the effective yields after the penalty are often higher than the shorter-term CD yields

Note About the CD Survey

As I described in my rate table overview, you can use our CD rate tables to find the best rates for both nationally available CDs and local CDs. The Friday blog posts are intended to highlight nationwide CD deals that may not be apparent in the tables. For example, I'll include the post-penalty yields of a few long-term CDs.

The Friday blog posts are also intended to highlight the local CD deals that are available in large metro areas. There are many high CD rates, but many of these are at small banks in rural areas or at small credit unions with very narrow fields of membership. In these local CD surveys, my focus is on local CD deals that are in big cities or that are available in large areas of a state.

Yields Accurate as of Sep 30, 2011

Under 1-Year CD Rates

  • Noteworthy Local Deals

1-Year CD Rates

  • Noteworthy Local Deals

18-month CD Rates

  • Noteworthy Local Deals

2-Year CD Rates

  • Noteworthy Local Deals

3-Year CD Rates

  • Noteworthy Local Deals

4-Year CD Rates

  • Noteworthy Local Deals

5-Year CD Rates

  • Noteworthy Local Deals

Over 5-Year CD Rates

  • Noteworthy Local Deals

Note: All rates listed above are Annual Percentage Yields (APY) which factor in compounding.

  Tags: CD rates

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