Current CD Rates August 2009

The Federal Open Market Committee (FOMC) meet for two days this week to decide the future direction of monetary policy. As expected, the FOMC decided to keep the fed funds rate in it’s current targeted range of zero percent to one quarter percent.

Even though economists are forcasting the economy will grow this quarter and next the fed isn’t concerned about inflation at this point because there is ”substantial resource slack”. Fed speak for too many idle factories and unemployed people to cause companies to raise prices or wages.

Another factor that will keep a lid on inflationary pressures is the productivity rate which has gone up to a very high rate of 6.2 percent in the second quarter. Companies are doing more with less employees causing productivity to skyrocket.

Current CD Rates

The average rate on a 3-month certificate of deposit is currently at 0.684 percent for the week ending August 14, 2009, down from the prior week’s average  CD rate of 0.701 percent. Ally Bank is offering one of the highest CD rates for a 3-month CD, their current rate is 1.14 percent.

6-month CD rates are averaging 0.937 percent this week, down from the previous week’s average CD rate of 0.988 percent. You can find 6-month CD rates at banks that are higher than the national average rates. Today’s 6-month CD rate at AIG bank is 1.55 percent.

12-month CD rates are averaging 1.257 percent this week, down from the prior week’s average rate of 1.271 percent. Discover Bank is offering one of the top CD rates around for a 12-month CD, their rate is currently 1.98 percent.

The average CD rate on 18-month certificate of deposit is at 1.409 percent this week, down from the prior week’s average rate of 1.418 percent.

24-month certificate of deposit rates are averaging 1.686 percent this week, down from last week’s average CD rate of 1.692 percent.

The average certificate of deposit rate on a 36-month CD is at 1.975 percent today, down from the prior week’s average CD rate of 1.978 percent.

48-month CD rates are averaging 2.203 percent the week ending today, down from last week’s average CD rate of 2.205 percent.

60-month certificate of deposit rates are averaging 2.449 percent this week, down from the previous week’s average rate of 2.450 percent.

Looking for the best CD rates in your zip code? MonitorBankRates.com has CD rates a lot higher than the national average CD rates. Search for CD rates using our CD rate tables.

CD Rates Increasing – More 5.00% CDs

The number of certificates of deposit with yields of 5.00% or more has increased.

The same high-yield certificates that were reported at Capital One are still available. The 60 month CD (5 Year) earns 5.00% annual percentage yield (apy), the 84 Month CD (7-Year) and 120 Months (10-Year) both earn 5.30% apy. The minimum deposit to open these CDs is $5,000.

If you are looking to deposit $100,000 or more, Capital One offers Jumbo Certificates with 5.00% apy on the 4-Year CD and 5.25% apy on the 5-Year CD. The 84 Month CD (7-Year) and 120 Months (10-Year) Jumbo Certificates earn the same as the regular CD, which is 5.30% apy.

Discover Bank has offered a great rate on its 5-Year CD since the beginning of July. With a minimum deposit of $2,500, their 5-Year CD earns 5.12% apy.

E-LOAN has kept rates on the 5-Year and 6-Year Certificate of Deposit steady and high at 5.01% apy for the 5-Year CD and 5.10% apy for the 6-Year CD. Minimum deposit to open is $10,000.

For those with $100,000 or more, E-LOAN has boosted the rate on the 5- and 6-Year Jumbo Certificates. Both Jumbo terms earn a super sized rate of 5.25% apy.

GMAC Bank added a 5.00% yield to their lineup at the end of June, then increased the rate on July 18. The rate on the 5-Year CD now earns 5.05% apy with a minimum balance of $500.

Finally, Third Federal Savings & Loan offers 5.00% annual percentage yield on both the 5-Year (60-Month) and 6-Year (72-Month) CD. Minimum deposit to open the CDs are $500.

ING Direct – Paperless Checking Account

ING Direct is laying the claim to “America’s first paperless checking account”. The Electric Orange Checking account is environment-friendly by eliminating all checks and account statements but has also been widely acclaimed for their online banking platform and the exceptional rates paid on deposits. The tiered rates have been as high as 5.30% on checking accounts earlier in 2007 and have consistently placed in the top twenty highest checking account rates posted on Money-Rates.com.

ING Direct Electric Orange Account Features:

* free ATM access at 32,000 locations

* electric checks – With the Electric Orange checking account, you can send money to an individuals’ bank account with Electric Checks for free. Simply enter the person’s information, the details of the payment, and an email will be sent to the recipient. The person can click on the link within the email to go to a secure page to enter their account information and the money is transferred!

* no fee overdraft protection

* mastercard debit card convenience

* download account information into Quicken or Microsoft Money

the Electric Orange checking account pays interest at the following rates:

$0 – $49,999 1.75% APY
$50,000 – $99,999 3.20% APY
$100,000 or more 3.40% APY

Low Interest Rates Can’t Keep Up With Inflation

With a federal funds rate at 2.25 percent, the lowest since 2005, investors are faced with receiving interest on their short-term investments that may not even outpace inflation. This presents a pitfall for investors who may be tempted to take on riskier investments or longer-term investments to make up for lost yield.

It is important to remember that the Fed reiterated during its meeting that “downside risk to growth remains,” suggesting that they may be forced to cut rates further. While we may be nearing the bottom, low interest rates for extended periods of time tend to create an environment of higher inflation which would eventually force the Fed to ratchet interest rates back up.

Because of this, investors should resist the temptation to lock up low interest rates for long periods of time, instead focusing on maintaining the flexibility and liquidity to react to the changing economic environment.

GMAC Bank CD Rates, Money Market Rates

GMAC Bank currently has some of the highest long term CD rates available. Here are some current GMAC Bank CD Rates:

Balance	Term	Rate	APY
$500 or more	3 months	3.44%	3.50%
	6 months	3.54%	3.60%
	9 months	3.54%	3.60%
	12 months	3.83%	3.90%
	18 months	3.54%	3.60%
	2 years	3.68%	3.75%
	3 years	3.92%	4.00%
	4 years	3.92%	4.00%
	5 years	4.07%	4.15%

$500 minimum opening deposit required. Deposit term will begin upon receipt of initial deposit. Your interest rate will be the one in effect on that date. Interest compounded daily. Fees could reduce the earnings on account. Penalty for early withdrawal.

The rates on their savings/moneymarket accounts are also pretty high:

Balance	Rate	APY
$0 – $499.99	2.86%	2.90%
$500 – $4999.99	2.96%	3.00%
$5000 or more	2.96%	3.00%

Bank of USA Checking Accounts

Bank of Internet USA has long been offering high yield checking accounts. Take a look at some of their offerings:

For those who want high yields on their checking without the hassles of reward checking accounts, Bank of Internet checking accounts are a good option. The best rate is on the Senior Checking which is only for those 50 or older. Some of the perks include:

• Yield of 3.75% APY on all balances as of 2/28/08
• Minimum opening balance of $50
• No monthly service charge, no minimum balance required
• Free checks. Limit one box per order.
• ATM fees reimbursed up to $8 per month
• Free banking by mail using BofI postage paid envelopes
• Unlimited Bill Payments at no charge

Almost as good is the Boomer Checking which is only for those 40 or older. It seems to have all the perks of the Senior checking except a lower yield (currently 3.45% APY on all balances).

For those under 40, Freedom Checking has a yield close to the Boomer Checking (currently 3.40% APY on all balances). The main downside is the $1K minimum balance required to avoid a monthly fee. Below are the features that are different than the Senior and Boomer Checking accounts:

• $1,000 minimum balance to avoid a $4/month fee
• Initial order of 50 checks provided free
• ATM fees you pay reimbursed up to $7 per month

Bank of America Current Interest Rates

Bank of America has dropped their rates along with the rest of the banking industry. Big banks like Bank of America have historically offered lower rates, and their current rates have not broken this trend. Bank of America’s high yield CD has a yield of 3.06% APY, with a 4 month maturity term. Minimum balance on this CD is $5,000.Their Risk Free CD offers an even lower rate of 2.75% APY and a 9 month term. However, this CD allows you to withdraw funds prior to maturity without a penalty, which makes it similar to a high yield savings account.

The Bank of America regular savings account yields a pitiful .20% APY compared to Washington Mutual’s 4.00% APY or E*Trade Financial’s 4.10% APY.