This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Savings Rates Could Head Even Lower

NEW YORK (TheStreet) -- Consumers could see interest rates on their savings accounts fall even lower early next year.

RateWatch -- a subsidiary of TheStreet that tracks interest rate data for over 90,000 financial service offices in the United States -- reported on Tuesday that average interest rates for 1 month CDs and 4 year CDs each declined by one basis point nationally, while overall interest rates on savings products remained at very low levels.

The national average rate for a one-month CD with a balance of less than $10,000 was 0.07%, while the rate for a four-year CD was 0.71%.

The Federal Reserve has indicated that it is likely to keep its short-term federal funds target range within the current range of zero to 0.25% until at least 2014. The federal funds rate has been in this historically narrow range since late 2008.

As part of its third major round of quantitative easing announced in September, the Fed is purchasing $40 billion in long-term mortgage backed securities each month and continuing to purchase roughly $45 billion in long-term Treasury securities each month. The purchases of long-term Treasuries are balanced by selling similar amounts of short-term Treasury paper, in an effort to keep the yield curve as flat as possible, in an effort known as "Operation Twist."

Neil Soss -- the chief economist for Credit Suisse Holdings USA -- said in a report on Monday that by the end of the year, the Fed's monthly sales of short-term securities "will have ended," which could have the effect of pushing short-term rates even lower, as the market supply declines.

Soss said that "an announcement to this effect will probably be included in the policy statement" next week after the Federal Reserve Open Market Committee holds its next round of meetings on Dec. 11 and Dec. 12. Of course, suspending the sales of short-term treasuries will accelerate the expansion of the Federal Reserve's balance sheet, which has been a controversial topic in Washington.

RateWatch said that the national average rate for a money market savings account was unchanged at 0.13%, while the average rates for three-month, six-month, one-year and two-year CDs were all unchanged from last week, at 0.11%, 0.17%, 0.27%, and 0.43%, respectively. The national average rate for a five-year CD with a balance of less than $10,000 was also unchanged, at 0.92%.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs