It has been another depressing week for bonds. As the stock market continues to rally (although, I’m not really sure why?), Bond prices have gone down and yields risen (bond prices and yields have an inverse relationship). This happened in June as well. In June, some certificate of deposit rates moved higher, but that hasn’t really materialized here in July.
The highest online 1-year CD rates are in the 2.50% range. Competitive rates are in the 2.00% to 2.25% range. The rate curve is fairly flat on terms of 1-year to 3-year. There is usually a tiny uptick for going to a 2-years Certificate of Deposit. Most 2-year CD rates are about 0.25% above 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.
Over the next few months, we will [spin]probably continue to see this back and forth between the stock market and bond market. Banks and Credit Unions probably won’t respond with greater rates Since they too understand it is a back and forth, give and take. The Fed will have to raise Fed Funds to drastically affect CD rates. It may be 9-months before that happens. Keep in mind that short-term interest rates will probably increase quicker than longer-term rates, eventually leaving us with a flat or almost flat yield curve. If at some point the curve inverts again (as it did in 2006/2007), I would extend your terms on the certificates. An inverted curve usally means lower rates are around the corner. On the other hand, I think we are in for a continued time of awful rates. The economy isn’t improving. Every time they mention a greenshoot, indicators comes out that it really was a brownout.
A great way to search for banks is to type in the rate and the year. This usually brings up a list of websites with current online CD rates. And if, for instance, you are trying to find the hard to find 3%, you’ll probably find it within the top twenty or so sites. You can also search by state. For example, you could type New Jersey CD rates for current rates in NJ – New Jersey You can also try searching by region, city, or country. Heck, have some fun and try some terms like “Bank CD Rates” or “Best CD Rates”.
Find free points of view in the sphere of one way links – your own knowledge base.