Top CD Rates September 24, 2013: Best CD Rate Deal, 6 Month Rate of 1.00 Percent

Heading towards the end of September, average CD rates haven't moved much this month but the highest CD rates available have. Last month the top 1 year bank CD rate was from GE Capital Retail Bank at 1.04 percent with an APY of 1.05 percent. This month the best CD rate on a 1 year certificate of deposit is from at 1.10 percent with an APY of 1.10 percent.

Average CD rates are mixed this week, 1 and 2 year CD rates are lower while 5 year CD rates are slightly higher. Long term CD rates moving higher doesn't comes as no surprise since long term bond rates have moved sharply higher the past few months. We won't see short term bank CD rates and credit union CD rates move higher until the FOMC increases the federal funds rate.

Average CD Rates Mixed This Week

1 year CD rates at banks are averaging 0.68 percent this week, down slightly from last week's average 1 year CD rate of 0.70 percent. Average 2 year CD rates are at 0.85 percent, down from last week's average rate of 0.90 percent. 5 year CD rates bucked the downtrend and are averaging 1.38 percent this week, up from the prior week's average rate of 1.36 percent.

5 year Bond Rates Up for 2013 but Down Sharply in September

During the first three quarters of 2013, 5 year bond rates more than doubled. Back on January 2nd, 5 year rates averaged 0.76 percent and at the highest point this year which was on September 5, 5 year bond rates averaged 1.85 percent. 5 year rates have come down significantly this month, down to 1.48 percent.

5 year CD rates moved higher in 2013 but the increase in rates was nowhere near the increase in 5 year bond rates. Over the past few months, some banks have increased 5 year CD rates around 50 basis points.

Long term bond rates came down this month on news that the Federal Open Market Committee won't start tapering their purchases which have kept a lid on long term rates. The FOMC has been buying $45 billion a month in long term bonds and $40 billion a month in mortgage-backed securities, both policies were designed to force long term interest rates lower.

Top CD Rates for September 2013

Below is a list of the top short term and long term certificate of deposit rates for the month of September:

  • 1 Month Rate 0.15% Lone Star Bank
  • 2 Month Rate 0.20%
  • 3 Month Rate 0.45% AloStar Bank of Commerce
  • 6 Month Rate 1.00% Zions Direct
  • 9 Month Rate 0.91% Doral Direct
  • 12 Month Rate 1.10% APY 1.10% E-Loan
  • 18 Month Rate 1.11% APY 1.12$
  • 24 Month Rate 1.19% APY 1.20% CIT Bank
  • 30 Month Rate 1.09% APY 1.10% E-Loan
  • 36 Month Rate 1.44% APY 1.45% Intervest National Bank
  • 48 Month Rate 1.64% APY 1.65%
  • 60 Month Rate 2.03% APY 2.05%

CD Rate Curve is Flat

As you can see, there isn't much difference between short term and long term CD rates. The CD rate curve is flat and has been that way for years now because the FOMC lowered the federal funds rate to zero percent back in December 2008. 5 year CD interest rates have increased the past few months but shorter term rates really haven't moved much higher at all.

Best CD Rate Deal is on 6 Month Certificates of Deposit

The best CD rate for the certificate of deposit term right now is Zion Direct's 6 month CD rate of 1.00 percent. Zion Direct's 6 month rate tops most 12 month rates right now. Another positive point in investing in a short term certificate of deposit is that once the account matures, rates will probably be higher than current levels.

Author: Brian McKay
October 3rd, 2013

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