CD Rate Trends This Week: Aug. 3


Things are getting topsy-turvy in the certificate of deposit marketplace, with some short-term CDs outperforming ones that go longer up the yield curve.

Let’s take a look at three-month and six-month CDs as an example. Currently, the BankingMyWay Weekly CD Rate Tracker shows their rates as follows:

  • Average three-month CD = 0.29%
  • Average six-month CD = 0.454%

OK, that fits the script — the longer term CD pays out better than the shorter one does, so the world is in its proper orbit.

But poking around a bit reveals a much different result.

For example, Flushing, N.Y.-based iGObanking is offering a three-month CD that pays out 1.35% APY with a $500 minimum investment. That actually pays out higher than a host of six-month CDs on the BankingMyWay CD Rate Search, including these:

  • Discover Bank (Stock Quote: DFS): = 1.15% APY
  • Flagstar Bank (Stock Quote: FBC)  = 1.25% APY

And even more than New York-based small financial institutions, which typically offer more competitive rates:

  • Mohawk Valley Federal Credit Union = 1.31% APY
  • Massena Savings & Loan Association = 1.22% APY

This is what we mean by topsy-turvy.

The higher payout for lower-term CDs is probably an anomaly, but the overall direction of CD rates isn’t — rates are low again this week across the board. Banks likely got a strong whiff of a New York Times article that pours cold water on the notion the economy will recover this year.

The article cites a laundry list of statistics pointing to slower growth, especially in key areas like housing purchases and consumer confidence.

Says The Times: “Part of the slowdown stems from the expiration of stimulus measures like the home buyer tax credit and the cash for clunkers program to bolster auto sales. But it is also perhaps the inevitable aftermath of a protracted era of credit-driven excess, buoyed by inflated housing prices.”

That sentiment is well-reflected in this week’s CD averages, as calculated by the BankingMyWay Weekly CD Rate Tracker. They’re still falling, albeit incrementally. Here’s a look:

Description                         This Week                   Last Week

60-Month CD                          1.947%                        2.007%

48-Month CD                          1.644%                        1.703%

24-Month CD                          1.122%                        1.142%

12-Month CD                          0.703%                        0.712%

Six-Month CD                          0.454%                        0.46%

Three-Month CD                      0.29%                          0.295%

As our little experiment on three- and six-month CDs demonstrates above, a little digging can turn up some real treasures like the one iGObanking is offering.

BankingMyWay’s CD Rate Search is a great place to start. Week-by-week, it’s the most thorough review of bank CD rates in the market.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at

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