About Ken Tumin

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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Deposit Rate Review for 2013 and Predictions for 2014


Deposit Rate Review for 2013 and Predictions for 2014

We all know that 2013 wasn’t good for savers. Overall, deposit rates remained low, but there were a few hopeful signs for savers. With our database of more than 8,000 banks and credit unions, we have been tracking deposit rates, and we have some interesting statistics to share.

The largest rate declines were on short-term accounts at brick-and-mortar banks. In 2013 the average savings account rate declined by almost 12%, and the average 1-year CD rate declined by almost 15%. Internet savings account rates had a smaller decline. The average rate declined by more than 6%. 5-year CD rates had the smallest decline. The average rate declined by more than 5%. The chart below summarizes these rate declines:

Deposit rate changes in 2013

The reason internet savings account rates had smaller declines is likely due to the competition that exists between internet banks. Several new internet banks were launched in 2013, and those additions put upward pressure on rates. Interest rates on 5-year CDs had a turning point in 2013. The talk from the Fed of tapering of its bond buying program spurred some banks to begin making small rate hikes on long-term CDs. That upward pressure continued in December when the Fed surprised the markets by announcing the start of tapering.

With the economy showing strength at the end of 2013 and with the Fed starting to taper its bond buying program, it's likely we'll see further small gains in long-term CD rates in 2014. However, short-term rates may remain relatively flat. The Fed did say at its December meeting that it intends to keep rates low for an even longer time after the unemployment rate threshold is reached.

Even if short-term rates remain flat, there will likely be a few good deals at internet banks as new banks try to attract depositors. In 2013 we saw a few good deals on savings accounts, money market accounts and reward checking accounts. That should continue in 2014. Savers just need to be willing to move their money when their banks start to lag on interest rates.

To find the best rates on CDs, savings accounts, money market accounts and checking accounts, please refer to the navigation menu at the top of this site.

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scottj   |     |   Comment #1
I was a little leary of locking in a couple Penfed 5 year 3.04% CDs but in the end decided it's a good gamble. Penfed rate is about a full point higher than what see out there, I figure rates will start to slowly rise during 2014 but still feel we wont see 3% 5 year CDs till at least the end of 2014. Also with this big time bump from Penfed I don't see them going any higher for a good amount of time and will most likely come down some before moving back up. Heck even if I'm wrong and rates rise quicker than I thought it will be good for all the laddered  CDs I have coming due in the next couple years. Best way to build a ladder is get the best rate at the time and this deal was it 
Anonymous   |     |   Comment #2
The savers are becoming gamblers, interesting trend.
Anonymous   |     |   Comment #3
Actually #2 the gamblers are becoming savers. Many who made huge stock profits in 2013 sold after the new year so they wouldn't have to pay those taxes for 15 months and put their money in safer investments and cash. No-one expects the record stock market returns to be repeated again this year. The gamblers took their chips, left the casino, and now hold short-duration Treasuries, CDs and money market funds.
gli   |     |   Comment #5
Ken - I have not seen a post on Santander Bank's new account offering - where they offer $20 for simply paying two bills and DD $1500 each statement period - do you think that other banks will follow suit in order to attract customers? Or do they prefer the signup bonuses? It seems like new offers like Santander's would encourage a more permanent customer as opposed to one that leaves 180 days after the bonus posts...?