Yet even with Fed officials releasing statements that convey optimism, consumers still find it difficult to get a glimpse of that recovery in sight as news of more job losses, rising credit card and mortgage delinquencies, and falling deposit rates continue to hound us.

This week alone, the country’s savers were dealt with a rather severe blow as Hudson City Savings Bank, the New Jersey-based banking institution that for the past weeks has offered consumers the best CD rates for the 2 to 5-year terms made cuts in its CD rates. The bank lowered yields by 0.10% in its 12-, 13-, 18-, 24-, 36-, 48-, and 60-month CDs.

Fortunately, some banks also increased their CD yields this week so that on the whole, CD rate averages this week didn’t drop too far down.

6-month CDs

The 6-month CD average rate was maintained at 0.91%. A major factor that helped keep the 6-month average at the same level as last week’s despite some banks slashing their 6-month CD yields, is the 0.30% rate hike made by Onewest Bank, Fsb on its 6-month CD.

12-month CDs

The 1-year CD rate average dropped the most this week, going down three basis points from 1.27% to 1.24%. Among the banks that made rate cuts for this term were  Amboy Direct (-0.35%), Bank of Internet (-0.37%), and Wilshire State Bank (-0.25%).

24-month CDs

The CD average rate for 2-year CDs also fell, although by only one basis point from 1.71% to 1.70%. The banks that contributed significantly to this rate drop were banking giants Bank of America (-0.26%) and Citibank (-0.25%).

36-month CDs

The 3-year CD average rate also went down by one basis point, going from 2.08% to 2.07%. Bank of America made the biggest rate cut for this term from 2.30% to 1.86% (-0.44%), while both Citibank and Hudson City 36-month CD rates fell by 0.10%.

48-month CDs and 60-month CDs

Both 4-year and 5-year CD rate averages held their own this week, keeping levels at 2.37% and 2.63% respectively.

To see if your bank has perhaps raised or lowered their CD yields and contributed to the changes in this week’s CD rate averages, check out our CD rates page.

First, the Fed released new rules on overdraft fees last week that the agency hopes could give relief to consumers. However, banks could also make up for the loss of revenue from overdraft charges by coming up with other new fees. Or, they could also choose to lower deposit interest rates.

Secondly, the FDIC closed two more Florida banks last Friday, bringing the total number of bank failures for this year to 123. Even more are expected to follow even as 2009 comes near to a close. This should make banks even more jittery about giving too high deposit yields to consumers.

Besides, the Fed has indicated that it will continue to allow bank lending at near-zero levels for an indefinite period of time, so you don’t really see the banks fighting over consumers’ deposits. Well at least not by giving CD rates that bank customers feel are worth their investments.

But the question at this time though is, how high did the top CD rates go this week?

Fortunately (or unfortunately however way you look at it), the nationally-available CD rates for last week saw few changes from last week.

6-month CDs

Ascencia maintained last week’s rate of 1.67% APY. For the past couple of months this, this rate had been 1.76%. UFB Direct follows with a rate of 1.60%.

12-month CDs

While UmbrellaBank.com stayed at the top of the list for 1-year CDs with a 2.10% yield, Amboy Direct which for the last two weeks shared the spot with UmbrellaBank, made a deep cut to its 12-month rate, bringing it down to just 1.75%.

24-month, 36-month, 48-month, and 60-month CDs

For the nth week now, Hudson City Savings Bank dominated the 2 to 5 year CD rates, currently giving the highest yields at 2.50%, 3.00%, 3.25% and 3.50% APY. Only in the 36-month CD does Hudson Savings Bank share the same rate with another bank, Flagstar Direct.

While, this week’s highest CD rates are nothing to be overly excited about, they’re our best bets for now. Besides, if we can’t really have the rates we want, we might as well have the rates that for now, can give us the most income for our hard-earned money.

With government bailed-out banks closing shop, and the list of bank failures hitting 120, it would not be so surprising if some banks are now wary of offering CD rates that are way higher than other banks. After all, they also have to evaluate the overall impact their rate offerings would have on profitability and consequently, bank stability.

This is perhaps the reason why some of the previous week’s highest CD rates are down a few basis points lower. Here is this week’s roster of the best nationally-available CD rates:

6-month CDs

Ascencia stays on top with the best 6-month CD yield but the bank made a huge cut to its rate from 1.76% APY, which has been maintained for so many weeks now, to just 1.63%, only 1 basis point shy of the next highest rate from newdominionDIRECT.

12-month CDs

UmbrellaBank.com’s 1-year CD offering, managed to best other banks for the past two weeks with its rate of 2.20% APY. While this week that rate is down to 2.10%, same as that given by Amboy Direct, it still is the top CD rate.

24-month, 36-month, 48-month, and 60-month CDs

Fortunately for savers looking to maximize their investments for the long term, Hudson City Savings Bank has opted to maintain its great CD rate offerings, the best in fact for about a month now, for 2-year, 3-year, 4-year, and 5-year CD yields. At 2.50%, 3.00%, 3.25%, and 3.50% respectively, these rates are some of the most competitive around, and has brought the CD rates for these terms to higher levels than they previously were. For 36-month CDs, Flagstar Direct shares the same top CD rate.

Great CD rates may come and go, but hopefully, the habit of saving will hold on until the time comes when interest rates climb back up. With the bleak state of the economy as of the moment, it appears that we’re in for a long wait, so the smartest thing that anyone can do is take advantage of the top CD rates available for now.

Then, the latest economic data released shows that new jobless claims drop to the lowest level for this year, while the retail industry saw its second straight monthly sales gain after a year-long decline. Could consumers perhaps be opening their wallets again, finally ushering in much anticipated economic activity?

Increased economic activity is certainly something that we hope will come soon enough. Because only then would we be able to expect deposit interest rates to rise again. And this is the bit of not-so-pleasant news that prudent savers will have to deal with: the Federal Reserve announced after its policy meeting last Wednesday that it is standing by its decision to keep benchmark interest rates at near-zero levels while the economy remains weak. Nothing surprising in that, but still disappointing for those who are hoping to get more out of their extra funds.

Let’s check out how much further down banks cut their CD rates in response to the Fed’s pronouncement:

6-month CDs

CD rate averages for 6-month CDs dropped the lowest this week, although fortunately not that substantially. Inching down from 0.95% to 0.93%, the 6-month CD rate fell by 2 basis points and slid farther from the 1.00% mark.

12-month, 36-month, 48-month, and 60-month CDs

Averages for 1-year, 2-year, 4-year, and 5-year CD rates also fell, each by a single basis point. If you think that a 0.01% decrease in CD rate average isn’t that much, you are quite right in that, but bear in mind too that these are some of the lowest rate levels seen in years.

24-month CDs

Only the 2-year CD rate was able to hold its own this week with the average maintained at 1.72% APY.

Bank CD Rate Cuts

In response to the recent flurry of developments, not too few banks made CD rate cuts this week and while banks lowering their CD yields are not uncommon, what could be cause for worry for savers looking to maximize their deposit yields is that the banks that made substantial rate cuts this week are those banks which offer some of the most competitive, if not the top, CD rates such as Ascencia (best 6-month CD rate), UmbrellaBank.com (best 1-year CD rate), Discover Bank, Ally, and American Express Bank.

To check if your bank has perhaps bucked the trend and instead, raised their CD yields for this week, visit our CD rates page.

Contemplating on this data brings to mind a scary post-Halloween thought. What if all deposit interest rates, whether savings or CD accounts, will continue to drop until all yields will be less than 1%? There used to be a time when short-term CDs and savings rates were somewhere within the 5% to 6% range, but that time seems like a long-forgotten dream now. These days, we’d be happy to find a savings yield that breached the 1.50% mark, and short-term CD rates are falling faster than you could say “economic recovery.”

Yet while all this point to a bleak outlook, if one does some digging around, savers can actually still find some better-than-average CD rates to tide them over until economic conditions already favor a rise in interest rates. For this week, few changes were made, but at least there were no rate cuts seen from the top CD rates, and there is even a rate hike for 2-year CDs.

6-month CDs

Offering a yield of 1.76% for 6-month CDs, Ascencia is still one of your best bets for short-term CDs. If you are on the lookout for even shorter placement options than 6-month CDs, EverBank’s 3-month money market rate of 2.51% is a great option, as is the 3-month savings account promo of New Jersey-based 1^st Constitution Bank, and its online division, 1^st Constitution Direct, giving a rate of 2.00%.

12-month CDs

Just very recently, UmbrellaBank.com hiked up its 12-month rate to 2.20% APY, surpassing Amboy Direct’s 2.10% yield, to grab the top spot for the best 1-year CD rate. If you can spare your funds for a few months longer than one year, the 16-month CD of Dollar Savings Direct offers a more-than-decent investment option with a rate offer of 2.25% APY.

24-month, 36-month, 48-month and 60-month CDs

For the longer term CDs, Hudson City Savings Bank continues to lord it over other much bigger banks. With branches all over New Jersey, New York, and Connecticut, the bank is giving the highest 2-year, 3-year, 4-year and 5-year CDs with APYs at 2.50%, 3.00%, 3.25%, and 3.50% respectively. For the 36-month CD, online bank Flagstar Direct offers the same top CD rate.

For more complete data, visit our CD rates page and use the comprehensive database of bank CD offerings to find the best CD rates available in your location.

Umbrella Bank offer

Umbrella Bank

You can find more information by viewing the Umbrella Bank profile page. Opening a new CD account on Umbrella Bank is actually very easy with it’s online application that allows initial funding via an ACH transfer, though ACH transfers are not available once the CD matures.

Financial Health Notice: On May 15th the Office of Thrift Supervision released a cease and desist order to the parent bank, New South Federal Savings Bank, Irondale, Alabama, which can be reviewed here. Because of this the BauerFinancial currently has the bank at a safety and soundness rating of 0 stars out of 5.

But what of CD rates? Shouldn’t an increase in mortgage rates also translate to an increase in savings deposit rates? Well, not necessarily. Rates on 30-year home mortgages are typically tracked on long-term Treasury bonds, while CD rates are dependent on a number of factors including the Federal Reserve lending rates, which unfortunately at this time, are at near-zero levels.

Given this premise, let’s check out how CD rate averages fared this week:

In general, national averages for CD rates this week showed some improvement as compared to the previous weeks’ steady decline. While the nation’s savers can certainly do a lot better than these CD yields, stopping the downward trend is a good start as any.

6-month and 24-month CDs

The 6-month and 24-month CD terms were the only ones to inch downward this week by 0.02% and 0.01% respectively. The 6-month CD dropped further from the 1.00% mark to 0.95% from last week’s 0.97%.

12-month, 36-month, 48-month, and 60-month CDs

When CD rates are falling steadily as they have been for the past few weeks, seeing them maintained at the very least is still welcome news. One-year, 3-year, 4-year, and 5-year CD rate averages have remained at 1.29%, 2.09%, 2.40%, and 2.64% respectively.

Bank CD Rate Hikes and Rate Cuts

Although a number of banks did make significant rate cuts for the past few days, some of these reductions were also offset by some rate hikes made by a handful of banks.

It’s interesting to note that Ally Bank, whose parent company GMAC Financial is reportedly in talks for another round of government aid, has made the most number, if not the largest ones, of rate cuts this week. HSBC Direct and HSBC Bank USA are two other banks which have made a number of sizeable rate reductions.

To check if your bank has perhaps raised or lowered their CD yields for this week, visit our CD rates page.

Umbrella Bank

You can find more information by viewing the Umbrella Bank profile page.  Opening a new CD account on Umbrella Bank is actually very easy with it’s online application that allows initial funding via an ACH transfer, though ACH transfers are not available once the CD matures.

Financial Health: On May 15th the Office of Thrift Supervision released a cease and desist order to the parent bank, New South Federal Savings Bank, Irondale, Alabama, which can be reviewed here. Because of this the BauerFinancial currently has the bank at a safety and soundness rating of 0 stars out of 5.

Rising Rates

These recent interest rate hikes reflect an almost 200% increase in APR, which many believe is a result of banks attempting to get as much money out of its current users before the legislation goes into effect that would, in part, prevent banks from making unannounced interest rate hikes. The law requires banks to give 45 days notice before making rate changes, and forbids banks from raising rates within the first year of a card’s contract.

In addition to these new interest rates, Citibank and others have sent notices to their credit card users that some cards, which before had no annual fees, could now carry as high as $90 yearly fees.  These kinds of actions have made lawmakers in support of the new credit card regulations, like Senate Banking Committee Chairman Chris Dodd (D-CT) suggest that maybe the deadline for the laws to become effective as soon as December 1st, to provide protection to consumers as soon as possible.  However, Fed Chairman Ben Bernanke has defended banks, saying that for institutions to change their credit card policies on such short notice would be too difficult.

Banks Start to Play Rough

Citi is not the only bank to impose tough new rules on their credit cards. Other banks have also increased rates and fees, or cancelled cards that they believe offer too many amenities, even for customers who pay their bills on time. As the federal government cracks down on lenders with new regulations, they must reign in some of the more costly, consumer- friendly features of their credit ard business in order to be able to continue profitably providing credit to their customers.

While the new Credit Card Act will provide protection for consumers against some of the more egregious credit card lending practices, it will also make owning a credit card more difficult in the interim period before these regulations go into effect, and may even cause some of the nicer aspects of credit cards, like rewards and benefits, to disappear, as lending becomes more costly to the lending institutions.

Despite this development however, the best CD rates this week fortunately showed little changes from last week’s roster even as CD rate averages last week dropped further, with the average for 6-month CDs finally moving down past the 1.00%-mark. But thanks to Hudson City Savings Bank and a handful of online banks, savers still have some pretty good CD deals where they can put their funds in.

6-month CDs

Ascencia has remained unbeatable for the past few weeks, months even, with its 1.76% offering for a 6-month CD.

12-month CDs

ING Direct dropped its CD rates last week including the 12-month CD from 2.10% to 1.75% APY.  By simply maintaining its own 2.10% 12-month CD yield, Amboy Direct therefore, now solely holds the best 1-year CD rate offering. Umbrella Bank still comes close though with a 2.06% APY offer.

24-month CDs

Hudson City Savings continues to give some of the highest CD rates for 2-year CDs, with a 2.50% yield for only a minimum of $500. For those who are not within easy reach of Hudson City’s 125 branches across New York, New Jersey, and Connecticut, Discover Bank’s 2.35% APY for the 24-month CD, is a good alternative as well.

36-month CDs

As with the previous week’s list, both Hudson City Savings Bank and Flagstar Direct offer the highest CD rate for the 3-year term at 3.00% APY. Again, Discover Bank is second, offering 2.75% APY for a minimum of $2,500.

48-month CDs

Hudson City Savings Bank also continues to hold the top spot for 4-year CDs, maintaining its attractive 48-month CD yield of 3.25% APY.

60-month CDs

For 5-year CDs, Hudson City Savings Bank still gives the best CD rates at 3.50% APY. Other competitive rates worth considering are from Discover Bank and Onewest, Fsb at 3.40%, and Ally at 3.35% with $0 minimum deposit required.

For an updated list of the best CD rates in your area, check our comprehensive database of CD rates available.