It was a relatively quiet week for CDs and this is reflected in how CD rate averages ended up. Granted, there are a few ticks either going up or down but on the whole, CDs remained at their low levels. Could this be the bottom perhaps? If it is, then these are the rates where CDs are likely to stay at within the next few months.

CD-rates-averages-august-21-2009

UFB Direct cuts their rates

Of the banks followed by My Bank Tracker, only one bank saw fit to raise its CD rates and this is UFB Direct. The bank raised its 24-month, 36-month, and 60-month yields by 0.05% but these had little effect on this week’s CD averages.

On the other hand, two bank made CD rate cuts: TriState Capital Direct which lowered its 6-month CD from 1.74% to 1.59% for a 0.15% change in the APY, and M&T Bank which is now offering only 1.01% for its 6-month CD compared to the 1.15% APY last week.

Rates trends unlikely to change anytime soon

Like the country’ savers, banks are seemingly adopting a wait-and-see attitude when it comes to offering more attractive yields for CDs and other deposit products, even with some indicators pointing to better market outlooks. And it looks like we’re in for a long wait.

After the Fed declared that the economy is already on the recovery road and that interest rates won’t be going anywhere up anytime soon, Fed chairman Ben Bernanke may perhaps have moved on to other more pressing concerns. Like for instance, how to slowly recoup the billions of dollar that have been flooded into the market in the height of the government’s recovery efforts.

If the Fed manages to actually usher in some changes for the better soon, the agency’s next long-term goal could be to have the funds that were pumped into the economy to help prop up ailing banks and unfreeze credit markets, slowly siphoned back to the government’s coffers.

If and when that happens, banks may not have such a ready source of cheap funds and could turn to depositors then, giving better interest rates. But as this would still be a long way off, the best one can do for now is to look for the highest CD rates available.

It was a relatively quiet week for CDs and this is reflected in how CD rate averages ended up. Granted, there are a few ticks either going up or down but on the whole, CDs remained at their low levels. Could this be the bottom perhaps? If it is, then these are the rates where CDs are likely to stay at within the next few months.

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