CD Rates Report April 2011: Forget CDs, Series I Bonds More Attractive

Simon Zhen

Updated on Mon Jul 14, 2014

Interest rates on CDs did not fluctuate by much during the month of April as the Federal Reserve announces the decision to maintain low benchmark lending rates.

Consumers continue to face economic conditions that encourage borrowing and spending rather than saving. Meanwhile, inflation is rising at a noticeable rate.

Certificates of deposits are not paying out enough interest to attract investments when a 5-year CD can barely beat 3.00% APY. A 3% return for locking money in a 5-year commitment appears to be an unwise move when there is a positive outlook for the stock market in this time frame.

… I-bond 12-month yields would top the 5-year CD rate national average.

An upcoming opportunity that may steal the spotlight from CDs are U.S. Treasury Series I Savings Bonds.

In May, I-bonds wills have a composite earnings rate of at least 4.60% for six months. Assuming that the next I-bond rate update in November is 0%, the 12-month yield on I-bonds would be at least 2.3% (after deducting the early withdrawal penalty of 3 months’ interest).

Read: Attractive Series I Savings Bond Yields Coming in May

The I-bond yields would nearly double that of the leading 12-month CD.

The Federal Reserve meeting on April 26-27 resulted in no changes to monetary policy – bond purchases will complete as scheduled and federal funds rate will be maintained at 0 to ¼ percent.

National CD Rate Averages for April 2011

With no major changes to benchmark rates, there were no substantial changes in national CD rate averages since March.

The table below shows the change of the national CD rate averages from March 25, 2011 to April 29, 2011. The figures are based on data acquired from banks that are tracked here on

CD TermAPY (as of 3/25/11)APY (as of 4/29/11)APY Change

The next Federal Reserve meeting is on June 21-22. Until then, CD rates are expected to remain at current levels.


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