CD Rate Trends This Week: Oct. 5


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.


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