Savings rates are falling. CD rates are falling faster. Soon, interest rates across various deposit accounts will converge — making it harder to justify the illiquidity of a CD. Prepare to bulk up your savings account.

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Here’s why:

The Federal Reserve has kept interest rates unchanged at 0 to 0.25 percent since December 2008. And those rates are expected to stay at those levels for another two years. Meanwhile, the rates that banks pay depositors have continued to decline — and the rates on long-term time deposits have been steeper than those of savings accounts.

In 2011, the rates on certificates of deposit dropped 21 to 31 percent across all maturity terms, according to the banks tracked on Additionally, rates on savings accounts fell 20 percent in the same time period.

As an example, Ally Bank offered a 2.40% APY on its 5-Year certificate of deposit in January 2011. One year later, that rate has fallen to 1.79% APY. Over that same period of time, Ally Bank’s online savings account experienced a rate drop from 1.09% APY to 0.84% APY.

Should this trend continue, consumers will favor stashing their cash in a savings account, while CDs would be shunned for its lack of relevance.

Rate Trend Already Seen Today

In fact, you don’t have to wait to see what this converged-rate world would look like. At popular online bank ING Direct, the 5-year CD rate is 1.00% APY while the Orange Savings account pays 0.80% APY, as of February 1, 2012.

Would you lock in $10,000 to earn just $104 more in interest after 5 years (assuming the savings rate stays the same)?

Most Americans wouldn’t.

If you insist on opening a CD account in this environment, you best do so before rates fall further.

And because the outlook for savings rates isn’t attractive for the two years, it would be wise to keep maturity terms to two years or less. Plunking down funds in a CD with a longer term means giving up the opportunity of higher returns when rates do rise in a thriving economy.

Follow Simon in the Community and on Twitter: @simonzhen.

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