CD rates are either holding steady or continuing to drop. This week finds CD yields lower than last week. The average of one year CD’s dropped 1 basis point to 0.41 percent while the average for 5 year CD’s also dropped 1 basis point to 1.42%. Jumbo certificates of deposit of no less than $100,000 weren’t able to evade the drop with its 5-year jumbo rates down by a large 4 basis points to 1.46%. Thankfully, 1-year jumbo CD’s held steady at 0.45%.
Considering the state of the economy, many investors are looking to place their money in safer avenues. Generally, treasury bonds and certificates of deposits are considered to be safer than stock market picks. Despite the low yields and rates given by both types of investments, investors seem unfazed as evidenced by the $35 billion in four week Treasury bills sold by the Treasury Department even with an interest rate of zero percent.
Below are the top contenders of CD rates in different time frames.
1. 1 month CD
Lone Star Bank – 0.40%
2. 3 month CD
AloStar Bank of Commerce – 0.76%
3. 6 month CD
AloStar Bank of Commerce – 1.05%
4. 9 month CD
New Dominion Bank – 1.05%
5. 1-year CD
AloStar Bank of Commerce – 1.27%
6. 18 month CD
First Trade Union Bank – 1.30%
7. 2-year CD
Aurora Bank – 1.41%
8. 3-year CD
Discover Bank – 1.70%
9. 4-year CD
Discover Bank – 2.00%
10. 5-year CD
First Internet Bank of Indiana – 2.40%
Just like last week, AloStar Bank of Commerce beats other banks with their CD rates for short term certificates of deposit. Longer term CD’s are experiencing good rates with Discover Bank. However, most investors are only looking to put their money in short-term CD’s since the rates are considerably low. Once the market starts looking up, you wouldn’t want to have your cash stuck in a low rate for a period of 5 years or longer.
Certificates of deposits although safe investments, may trump the potential yield of money. They do however make a good and safe place to keep your cash until other investment vehicles stabilize.