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Small Declines in Long-Term CDs


Although short term rates on money market accounts and short term CDs are slowly rising, long term rates haven't been moving up as much. In fact over the last month, there has been declines. Here are a few examples of changes in 5-year CD rates in the last month:

Bank Dec. APY Jan. APY
---- -------- --------
Mutual Bank 5.50% 4.95%
GMAC Bank 5.10% 5.00%
Countrywide Bank 5.10% 4.90%
ETrade Bank 5.15% 5.00%

As mentioned by BestCashCow, the yield curve fell yesterday to its most inverted point since 2000. The yield on the 10 year Treasury trading 8 basis points below that of the 6-month Treasury.

So this trend of lower long-term CD rates may continue, and if the Fed stops increasing the funds rate, there won't be as much pressure on short-term rates. Currently, PenFed Credit Union is offering 60-month certificates at 5.75% APY. This may not last past this month.