Even when a bank closes, its CD rates are still an issue. The FDIC closed down three more banks last Friday, bringing the total number of bank failures this year to 98. But while the federal agency was able to find buyers for all of these three failed banks, what remains a concern at this point is the possibility that the acquiring bank might be making cuts in the CD rates of the failed bank without properly communicating this move to clients first. This situation has certainly happened before.

For those depositors who were enjoying relatively good rates or have locked-in to high CD rates for the long term prior to the takeover, this could be a big blow especially since competitive CD yields are getting harder to find these days. If you are one of those on the lookout for a good bank with great CD deals, you’re definitely in luck as CD rates saw some promising changes this week.


6-month CDs

Ascencia continues to offer one of the best CD rates for the 6-month term, maintaining its 1.76% APY.

12-month CDs

The competition is getting stiff for the 1-year CDs. ING Direct and Ally’s CD rates for the 12-month term have surged forward very recently, giving consumers more CD options for $0 minimum deposit. The yields are at 2.10% for ING Direct and 2.05% for Ally. Bank of Internet also briefly hiked up its 12-month rate last week to 2.15%, only to decrease it this week to a still- competitive 2.02%.

24-month CDs

The 2-year CDs continue to be dominated by E-Loan at 2.37%, and Discover Bank, Ally and newdominionDIRECT at 2.35%. The small difference in the rates is more than made up for by the lower minimum balances required by the last three banks.

One more interesting CD deal that has cropped up lately is Hudson City Bank’s 2-year CD which offers a 2.50% interest. The minimum balance required for this rate is $5,000 and the account can be opened online.

36-month CDs

Another welcome news this week is the 3-year CD rate’s climb to hit the 3.00% mark again — well at least for the best CD rate for this term, which belongs to Flagstar Direct. This bank is a newcomer to the best CD rates list, dislodging Intervest National Bank which offers a 2.90% yield. Flagstar Direct’s 36-month CD only requires $500 minimum to open.

48-month CD and 60-month CDs

The highest CD rates and the banks offering them remain unchanged for the long term CDs. Intervest National Bank retains the top spot with its 3.20% APY for the 4-year CD, while Citibank continues to offer 3.50% on its 5-year CD.

Perhaps one of the most important lessons learned from this severe financial crisis is the value of saving. Interest rates may be at really low levels nowadays, but the rate at which Americans have been saving has jumped from 2.6% last year to 4.2% this year. Let’s hope this trend continues even as economic conditions get better. But more importantly, let’s hope we see an increase in CD rates soon.

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