The best six month CD rates slumped measurably for the week ending June 5, 2009. Seven of the top ten best CD rates with a six month term are lower for the week. The average for current list of the top ten highest CD rates displayed an increase from 2.05% to 2.06%, however this rate change was driven by the addition one bank offering a CD rate significantly above the competition. Without the additional bank CD rate, the average rates fell by four basis points or 4/100 of a percent to 2.01% from 2.05% the previous week.
Wilshire State Bank which is headquartered in California and has additional bank branches in New Jersey, New York and Texas offers a six month CD with an interest rate of 2.52% that is available via the internet nationwide. The bank will not win any customer service awards since our department had to call the banks operations center to confirm the available rate after receiving fuzzy responses from two branches. This rate is 37 basis points above the next best CD rate, a highly unusual situation.
The next best CD rate after Wilshire with a six month term comes from La Jolla Bank with an interest rate of 2.15%. Last weeks rate leader, Corus Bank, falls to third position with six month CD rate of 2.12%. Rates make another sizable drop after this bank rate with the next best rate being a product of Ascenia which promotes a six month CD rate at 2.03%. With seven banks reducing their rates and three banks moving on to the top ten, this is the most volatility the six month CD rate list has experienced this year.
Following the divergence of interest rates last week, the trend of bank CD rates falling while other interest bearing securities rates rise continues. Short term Treasuries, long term Treasuries and mortgage rates all rose substantially for the week. Most economists continue to expect raising rates over the coming months even with this inconsistency in bank CD rates.
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