As I mentioned last month, many of us have high-yield CDs that are maturing this year, and it’s now a difficult decision about what to do with those maturing CDs. Back in 2008, it was easy to find 5% 5-year CDs. Even though the Fed was cutting interest rates through 2008, the financial crisis had banks worried about liquidity, and they were trying to attract deposits. So CD rates didn’t fall much until December of 2008 when the Fed cut the fed funds rate target to its lowest level of 0% to 0.25%. CD rates fell after that and continued to fall throughout 2009.
After 2008, there were just a few opportunities to get a 5% CD. One of the best opportunities was at PenFed in January 2011 when they had their Watch it Grow promotion which included a 5% 10-year CD. PenFed’s highest CD yield is now only 1.25% for a 7-year term.
Some savers may have 6% CDs that are still active. I would guess these CDs are 7-year terms that were opened in 2006 or early 2007. One of the best deals in early 2007 was at PenFed which had offered 6.25% APY for terms of 3 to 7 years. I made the mistake of choosing a 3 year term.
So what’s the best CD that you still have? And when does it mature?
And when it matures, do you plan to roll it over into another long-term CD? Or will you move some or all of the funds into savings or money market accounts?