The best five year CD rates available nationally went against the tide by managing to produce a small gain in yield while all other bank CD term rates dropped for the week. The highest bank rates were unchanged; however, the average of the top ten bank CD rates did increase. The average of the five year CD rates climbed to 3.55% from 3.52% in the previous week.
The best five year CD rate is a three way tie at 3.65%. This rate offered is unchanged and in fact this rate was offered by four banks in the previous week. Acacia Federal Savings Bank, Tennessee Commerce Bank and State Bank of India all promote a five year CD that earns a rate of 3.65%. Intervest National Bank offers the second best five year CD rate, three basis points below the top rate at 3.62%. Goldwatwer Bank follows with a five year CD that has an interest rate of 3.51%. Discover Bank dropped its rate from 3.65% last week to 3.50% this week, moving the bank’s rate to a four way tie with iGOBanking, E-Loan and La Jolla Bank. AIG Bank or what we like to call “the peoples bank” raised their five year CD rate to 3.46%, helping drive the average higher in this term category.
The spread between the highest and lowest five year CD rates narrowed even further this week to just 19 basis points. Tight spreads means limited volatility and a lower probability of significant future reductions in yield. Spreads last week had widened on short term CD rates which then experienced huge rate changes for this week and tightened on the long term which in fact did lead to less rate activity five year CDs this week.
With this slight increase in the five year CD rates, the CD rates yield curve continues to remain steep with a spread of 1.52% between the average of the best six month CD rates and the five year CD rates. With the exception of this week, the rise in the spread had been the result of falling short term rates or short term CD rates falling at a greater rate than long term rates. It is somewhat of an enigma or an anomaly or perhaps an anomaly wrapped up in an enigma that short term rates are dropping at a time when Treasury rates in general are rising and expectations of higher rates of inflation are breathing on our budgets.
Although Treasury rates have been on upward lift recently, all Treasury terms had interest rates that ended this week slightly lower than where they were one week ago. CD rates will lag any movement in Treasuries by a considerable time frame but it may be significant that the short term Treasuries dropped the most for the week with the six month falling six basis points, the one year Treasuries falling ten basis points and the ten year sliding only three basis points.
SelectCDrates.com is the leading industry tool for selecting the best CD rates. SelectCDrates.com provides bank rate data on banks locally and nationally to help consumers quickly find the best rates to fit their needs. SelectCDrates.com achieves the goal of publishing the best rate information by searching for the highest bank rates with web crawlers, telephone surveys and local market research. SelectCDrates.com staff provides current statistics on economics news that impacts the bank and credit markets as well as in depth articles on bank products and services. To view all the bank CD rates and articles visit http://www.selectcdrates.com.
