Top Online Certificate of Deposit Rates – July 20, 2009
It has been another depressing week for bonds. As the stock market seeks new hights (although, I’m not really sure why?), Bond prices have gone down and yields risen (bond prices and yields have an inverse relationship). This happend in June as well. Last month, some CD rates moved up, but that hasn’t really taken place here in July.
The highest online 1-year interest rates are in the 2.50% range. Competitive rates are in the 2.00% to 2.25% range. The curve is fairly flat on terms of 1-year to 3-year. There is usually a tiny uptick for purchasing a 2-years Certificate of Deposit. Most 2-year CD rates are about 0.25% higher than the 1-year, and the 3-year is usually another 0.25% above that, around 2.75%. Good 5-year rates are near 3.40 to 3.60% APY.
Typing the year and rate will produce some interesting rate data. This usually brings up a list of web pages with current online yields. And if, for instance, you are trying to find the hard to find 3%, you’ll probably find it within the highest twenty or so positions. You can also search by state. For example, you could type cd rates nj for interest rates in NJ – New Jersey
Over the next few months, the stock market and bond market will likely continue this current give and take. Since the banks also know it is a back and forth, give and take, they probably won’t respond with greater online CD rates. I think it will take the FOMC to raise Fed Funds to seriously affect CD rates. It may be 9-months before that happens. Keep in mind that short-term rates will probably move up faster than longer-term rates, at some point leaving us with a flat or mostly flat yield curve. If at some point the curve inverts again (as it did in 2006/2007), I would lengthen your terms on your certificates. An inverted curve usally means lower rates are around the corner. Yet, I think we are in for a enduring time of awful interest rates. The economy isn’t improving. Everytime people talk about a greenshoot, data comes out that it in reality was a brownout.
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