When it rains it pours.
But it’s not the weather worrying bank rate investors, it’s the steady downpour of low interest rates dragging certificate of deposit rates down to historically weak levels.
Get your umbrellas out again this week, as the bad weather for bank CD rates continues.
Right down the line, in all six of the key CD categories, rates fell for the week, as measured by the BankingMyWay Weekly CD Rate tracker. We’ll get to the numbers in a moment, but the economic issue du jour that is keeping rates down - and there always seems to be one – is national unemployment.
According to the U.S. Deptartment of Labor, in the week ending Aug. 14, initial claims clipped the 500,000 levels, an increase of 12,000 from the previous week's revised figure of 488,000. The four-week moving average was 482,500, an increase of 8,000 from the previous week's revised average of 474,500.
It’s been a steady climb for the weekly U.S. jobless rate, which stood at 482,200 at the end of July. Clearly, instead of adding jobs, the private sector continues to shed them, and that’s bad news for not only the unemployed (and the soon-to-be-unemployed), but for bank deposit investors, too.
There is no shortage of key economic benchmarks that can influence bank interest rates, but unemployment figures are particularly important. If private companies aren’t adding jobs, or worse, are in fact cutting them, that tells central bankers that the economy remains mired in a ditch, as President Obama has referred to our national financial predicament.
We won’t get out of that ditch unless companies start hiring again, and the Federal Reserve and banks won’t start pushing rates until that begins to happen (especially with inflation off the Fed’s radar).
The American public certainly understands. In an Associated Press-Gfk Poll released last week, 60% of Americans think the U.S. is on the “wrong track,” and only 35% think we’re heading in the right direction. When six out of 10 Americans express significant doubts about the economy, there is little impetus for central bankers to start hiking key lending rates. Banks dance to the Federal Reserve’s music, so don’t expect them to lift interest rates, either.
Now, let’s go to the numbers calculated by the BankingMyWay Weekly CD Rate tracker:
Description This Week Last Week
60-Month CD 1.883% 1.901%
48-Month CD 1.589% 1.602%
24-Month CD 1.076% 1.088%
12-Month CD 0.672% 0.684%
Six-Month CD 0.433% 0.44%
Three-Month CD 0.277% 0.28%
You’ve got to dig deep to find some good CD deals, but that’s where BankingMyWay can help.
Make a date with your financial future at least once a week by checking out BankingMyWay’s CD Rate Search. Week-to-week, it’s the most thorough review of bank CD rates in the market.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.