The rates for certificates of deposit (CDs) continue to climb as national averages show steady improvements in the past month. Rate increases are occurring on CDs of various maturity terms, but online banks are pushing the boundaries on 5-year CDs in particular.
VirtualBank, an online banking division of Florida-based Sabadell United Bank, currently offers the top nationwide 5-year CD rate of 2.31% APY ($10,000 minimum opening deposit). The rate barely beats the 5-year CD rate of 2.30% APY at GE Capital Retail Bank ($25,000 minimum opening deposit).
Last month, the top 5-year CD rate was held by EverBank at 2.27% APY.
Additionally, 1-year CD rates have been climbing too. The most notable rate bump came from EverBank, which raised its 1-year CD rate to 1.06% APY ($1,500 minimum opening deposit). It also happens to be the best nationwide 1-year CD rate.
The current rate environment poses tough terrain for consumers to maneuver because CD rates are rising while savings rates haven’t shown much movement. Toss in the the Federal Reserve’s prolonged stance on near-bottom interest rates and it becomes confusing for savers.
On one hand, jumping on CD rates now would mean that you are locked into sub-par rates when the Fed decides to increase the federal funds rate. On the other hand, you’re missing out if this period of low rates sticks around for longer than expected. Some people might just leave their cash in a savings account for the safety of liquidity.
Whatever your tolerance for interest risk may be, you can do something about it. Those who believe rates will stay low for some time can rely on savings accounts and short-term CDs until they are ready to commit for longer terms. Others who want to maximize their interest earnings may want to consider a CD ladder.
The table below shows the changes in national averages for CD rates from March 31, 2014 to April 30, 2014. The figures are based on the data acquired from banks that are tracked by MyBankTracker.
|CD Term||APY (as of 3/31/14)||APY (as of 4/30/14)||APY Change|
Use the below table to find the top CD rates currently available: