Lock in a 12 Month CD Rate Now Before Rates Move Lower in 2013

Lock in a 12 month CD rate now before rates move lower in 2013? Yes, unfortunately that is the case, already low bank and credit union CD rates are expected to move lower in 2013 so you should lock in a rate now. We believe CD interest rates are moving lower in 2013 but will move higher by 2015. That is, mind you, if Congress can get their act together regarding the fiscal cliff problems they created.

Rates may actually move higher in 2014 if the economy grows quicker than expected but that is unlikely. Right now the best CD rates on 1 year certificates of deposit are at 1.04 percent with an APY of 1.05 percent. Average CD rates at banks in the FDIC's National Rate and Rate Caps Survey are considerably less this week at 0.23 percent.

Late in 2012, some banks already lowered the rates they pay on shorter term certificates of deposit. On our rate list the top CD rate on 1 year CD accounts used to be held by five different banks - now only two banks are tied with the highest rate at 1.04 percent. You could get a higher rate on a longer term CD investment like a 2 year CD but rates are only marginally better.

The best 2 year CD rates are at 1.19 percent with an APY of 1.20 percent, only 15 basis points higher than 1 year rates. I recommend staying in shorter term CDs, like 6 months (best 6 month rate at 0.90%) or 12 months. That way you can be in a position take advantage of higher rates right away when they finally do move higher.

Below is a list of the top CD rates for the last week of January 2013: