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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 July 26, 2013

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After two weeks of slightly falling Treasury yields, this week we saw a slight rise in yields. The 10-year Treasury yield increased 8 basis points this week to 2.58%, and the yield has remained mostly at or above 2.50% since the start of July. We continue to see more signs that these higher Treasury yields are carrying over into long-term CD rates.

We had another internet bank come out with a 2% 5-year CD. This week it was EverBank which started offering a 2.06% APY for a 5-year CD. Last week it was iGObanking.com with a 2.05% APY 5-year CD, and two weeks ago it was Salem Five Direct with a 2.00% APY 5-year CD. So now we have three internet banks with 5-year CD rates of at least 2.00%. That’s the first time we’ve seen this since early last year.

In addition to these 2% 5-year CDs, there was also a new 2% 6-year CD. Third Federal ended its 45-month CD special and replaced it with this 6-year CD special that has a 2.00% APY.

I also added Raymond James Bank to the list. It had also been offering a 2% 5-year CD, but that rate went down slightly this week to 1.95% APY.

State Bank of India - New York had also been offering a 2% 5-year CD, but that rate fell this week to 1.75% APY. So not everyone is increasing their long-term CD rates.

This brings up an important question for savers. Do you jump on these 2% 5-year CDs? Or do you hold steady and wait for even higher rates. If you think this trend of higher yields won’t last (just like past hints of higher rates in the last four years), these 2% 5-year CDs could be good deals. However, if you think the economy is on a sustained growth path and the Fed will likely respond with tightening, these higher rates may be the start of many more rate hikes over the next few years. In that case you may want to hold off on any new long-term CDs. There’s no easy answer. Just keep in mind that it’s hard to predict future interest rates. It’s probably best not to put all of your eggs in one basket.

Brokered CD rates have actually gone up more than direct CDs. As I mentioned last week, you can get higher 10-year rates with brokered CDs than with 10-year CDs directly from banks and credit unions. The 5-year brokered CD rates are close to matching the best 5-year direct CDs from internet banks. The best 5-year brokered CD rate (non-callable) that I found today was 1.95%. This is being offered by American Express Centurion Bank. The best 10-year brokered CD rate (non-callable) that I found today was 2.90% at Compass Bank and First Premier Bank. All of these were available through Fidelity.

Local CD Deals

There weren’t many rate changes this week for the local CD rates. The most noteworthy change was at Randolph-Brooks Federal Credit Union in Central Texas. Just like last week both its 7-year and 6-year CD rates increased by 10 basis points. That put its 7-year CD rate over two percent. It’s now 2.07% APY.

Long-Term CD Break Strategy

For the short-term CDs in my lists, you might notice CDs with the note "5-year CD closed after X years". These take into account the yield after the early withdrawal penalty is applied. Since Ally Bank's 5-year CD only has a 60-day interest penalty, it's still a good deal when closed early even with the recent rate cuts.

If you want to compare the effective yields of other CDs after the early withdrawal penalties, please refer to our CD early withdrawal penalty calculator.

The risks of planning for early withdrawals of long-term CDs were recently highlighted by the deposit agreement change at Ally. The risks have also been seen at credit unions which have raised the early withdrawal penalties on existing CDs. I have more details in this blog post.

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. This CD survey 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 CD survey 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 most 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 July 26, 2013

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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Comments
8 Comments.
Comment #1 by Shorebreak posted on
Shorebreak
"This brings up an important question for savers. Do you jump on these 2% 5-year CDs? Or do you hold steady and wait for even higher rates."

For the deposit account portion of one's portfolio, which should be diversified, I'm still looking at the "barbell approach" with half of funds in liquid savings or money market accounts and the other half in maturities of 5,6 or 7-year certificates of deposit. Perhaps it would be a good idea to do this gradually, i.e. 'dollar cost average', in order to keep from getting stuck at the low-end of the yield curve if rates start gradually going up.

6
Comment #2 by paoli2 posted on
paoli2
I'm a "jumper".  I know how much income I need to make and that is my criteria.  2% is not what I ever dreamed of having to cope with but if it helps me meet my criteria and keep my principal safe, I have no other choice.  I do what works for me now and how by the time these 5 year CDs mature, sanity in interest rates will be back.

7
Comment #3 by Anonymous posted on
Anonymous
For whatever its worth record amounts of dollars are being withdrawn from bond funds, which means bond buyers fear continuing rise in interest rates (i.e. lower bond prices). If you can sit tight for at least a couple months.

5
Comment #4 by paoli2 posted on
paoli2
#3  I would love for you to be right but everything I am reading is not giving me hope that interest rates on 5 year CDs will go up very much in these next few years.  I refuse to go longer.  Soooo  one has to do what one has to do.   At least for now, I am still able to get some checks.

5
Comment #6 by Anonymous posted on
Anonymous
#4 Also housebuilder stocks are getting clobbered because of the anticipation of rising rates making borrowing for a house more expensive. And everyone is holding their breath with each jobs report. It will definitely be interesting!

1
Comment #5 by OldGuy posted on
OldGuy
I have an almost impossible time keeping my powder dry, waiting for rates to go up further.  I do exactly what Paoli2 does, although I've taken advantage of First Republic's recent 6-year CD rates between 2.15% and 2.50% (the 2.50% reflected a 25 basis points bump up as part of a loyalty reward promotion for clients).

8
Comment #7 by Anonymous posted on
Anonymous
Aaaah, waiting for the interest rates to go up reminds me of the movie, “waiting for Godot” or for the French speaking “En attendant Godot” and he never came back.

12
Comment #8 by Anonymous posted on
Anonymous
M&T bank I offering 2.07% for a 5-yr CD.

4