CD Rate Trends This Week: Oct. 5

ADVERTISEMENT

Certificate of deposit rates took a big step backwards last week, falling up to 35 basis points in key categories.

A visit to the BankingMyWay CD Rate tracker reveals the carnage, with the 48-month CD falling from 1.495% to 1.461%, while the 24-month CD dropped from 0.963% to 0.934%.

It wasn’t like the other CD categories did much better, either. In general, all were off significantly, and bank investors can only wonder what they ever did to deserve a CD market like this.

We can engage in all the finger-pointing we want, but at some point bank rate markets are released from their moorings and drift in any direction that market forces push them. Sure, the financial markets got a sniff of Friday’s unemployment numbers, with news that the jobless rate was inching up again. But the big picture remains the same: While the economy is officially out of recession, it sure looks like an economy that’s still in recession.

Here are some key points to keep in mind:

  • The stock market enjoyed a great September, but analysts point out that companies only beat earnings expectations that had already been set painfully low.
  • The Labor Department will soon release September’s unemployment number, and it’s expected to rise from 9.6% to 9.7%.
  • Consumer bankruptcies have risen 11% through the first nine months of 2010, according to the National Bankruptcy Research Center.
  • Japan’s central bank cut its interest rate to near zero – a signal that the global economy remains in peril.

All of the above is cold comfort to CD rate investors. We’re still fighting a million demons economically, and such a struggle invariably produces the downward rate environment we’re seeing now. That’s true even after a decent month of September, when rates moved upward.

Now let’s go to the numbers, as calculated by the BankingMyWay Weekly CD Rate tracker:

------------------------------------------------------------------------------------------------------

Description                              This Week                   Last Week

60-Month CD                          1.713%                        1.742%
48-Month CD                          1.461%                        1.495%
24-Month CD                          0.934%                        0.963%
12-Month CD                          0.608%                        0.623%
6-Month CD                            0.396%                        0.402%
3-Month CD                            0.252%                        0.256%

------------------------------------------------------------------------------------------------------

Last week was quite a body blow to bank rate investors. But don’t get down for long. You can still dig up some very good rates – if you know where to look. Start with the BankingMyWay’s CD Rate Search. Week to week, it’s the most thorough review of bank CD rates in the market.

 

Show Comments

Back to Top