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CDs' Liquidity Premium Disappears

Wednesday, May 29, 2013 - 8:13 AM
From Bankrate: 
During normal times, banks and investors in certificates of deposit have an understanding: CD investors agree not to withdraw their deposits for a set amount of time, and banks pay them a little extra interest for the certainty that those deposits will be there if they need them.

But these aren't normal times, and that that little bit of extra interest, known as the liquidity premium, is doing a disappearing act.

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Using DA's tables, the best money market account nationally available is at AmericaNet Bank, and pays 1.10% on a max of $35k.   The best nationally available 1-year CD is at Connexus Credit Union, which pays 1.10%APY on a minimum of $10k with an active checking account. 
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