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Like a 10-year-old gaining top speed on a water slide, certificate of deposit rates continue to fall at an alarming rate.

We’ll get to the BankingMyWay Weekly CD Rate Tracker in a moment, but suffice it to say that CDs are down and declining even more rapidly. For example, CD rates fell 29 basis points (0.29%) week to week in the 60-month CD territory.

Meanwhile, 48-month CDs fell by a similar number, declining 30 basis points in one week. And 24-month CDs — where interest rates are really starting to get tight — saw rates fall 21 basis points.

It’s carnage across the CD landscape and bank investors are wondering not when, but if, things will get better. Logic dictates that rates will go up, but the further they fall, the more ground rates will have to make up. It will also take CD investors longer to get back to historical norms.

Right now, it looks like bank investors have fallen into a 200-foot well and can barely see light at the opening.

The numbers listed above are all either at or above the average decline in specific CD rate categories from July 2009 to July 2010. According to Market Rates Insight, the average CD rate decline for that time period was 21 basis points.

So for last week, the rate at which CD rates are falling is picking up the pace in key categories.

What’s driving the rate decline this time? In a word, jobs. While the unemployment rate remains at 9.5%, the latest numbers from the U.S. Labor Department show that overall employment in the U.S. fell by 131,000 in July. Paralyzed by uncertainty, U.S. businesses aren’t hiring, according to the Wall Street Journal, and that’s keeping economic growth in check (if not pushing it into decline).

It’s not rocket science. A lousy job market begets a cautious consumer. And a cautious consumer begets less spending on products and services. As you probably guessed, that begets a business environment where companies aren’t hiring due to lack of consumer demand and uncertainty over the fallout from taxes, both real and imagined, stemming from Washington, D.C.

This domino effect results in a soft economy, where banks have really no incentive to jack up CD rates. With so much uncertainty, investors are once again fleeing riskier stock market investments for the safety of the bond market. And with so many investors looking for the safety of CDs, banks don’t need to raise rates to attract new business. Bank CD investors will need to see that scenario turned around before interest rates can pick up again.

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For the week, the picture is a negative one. Let’s go to the numbers, as calculated by the BankingMyWay Weekly CD Rate Tracker:

Description                          This Week                   Last Week

60-Month CD                          1.918%                        1.947%

48-Month CD                          1.615%                        1.645%

24-Month CD                          1.102%                        1.123%

12-Month CD                          0.691%                        0.703%

Six-Month CD                          0.445%                        0.453%

Three-Month CD                      0.284%                        0.29%

In this week’s edition of our CD Rate Tracker, the trend is not your friend if you’re looking for help from the bank CD market.

To help even the score, BankingMyWay’s CD Rate Search can help you find some decent CD deals. Week-to-week, it’s the most thorough review of bank CD rates in the market.

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