CD Rate Trends This Week: June 8 - TheStreet

It’s not exactly the heyday for bank deposit rates.

Take certificate of deposit rates. Bank Marketing News regularly charts the direction of CD rates on a year-to-year basis.

Its latest chart — as of May 21 — shows that three-month CDs have fallen 54.08% year over year.

The carnage is across the board. Six-month CDs are down 48.09% over the same period, while one-year CDs are off 40.24%. Two-year CDs fare only a little better — they’re down 26.53% over the past year.

You can find the entire chart, which includes year-to-year comparisons of other bank deposit rate trends, at Any way you look at it, there appears to be plenty of room for upward growth in the CD market.

What are the chances of seeing that growth? While the jury is still out, the short-term prognosis isn’t a good one. To check the health of CD rates, economists like to look at the strength of Treasury rates, and what we’re seeing this week indicates that Treasuries are at their lowest point of 2010. The five-year Treasury rates closed on May 28 — just before Memorial Day weekend — at 2.1%. Today it’s down to 1.98%.

The 10-year Treasury is also on the downslide. Over the same 10-day timeframe, it has fallen from 3.31% to 3.20%.

Treasuries are taking their cue from the U.S. employment market, which is bearing mighty thin gruel these days. While the overall U.S. jobless number, as measured by the U.S. Labor Department, fell from 9.9% to 9.7% in May, the bulk of new jobs created last month were credited to the U.S. Census. In fact, only 31,000 of the 440,000 jobs added in May came from the private sector.

That’s a pretty bleak scenario, given that the jobless rate is historically tied to consumer spending. With both statistics in the tank right now, and no inflation on the rise that might prompt the Federal Reserve to hike interest rates, bond rates are lagging.

It’s not that bank rate investors are giving up. A recent Gallup Poll survey of U.S. retirement trends shows that the percentage of Americans who plan to “rely heavily” on bank savings rates in retirement has held steady from 2007 to 2010 — at 23% three years ago and 22% today.

But the way things are going, you have to wonder how long bank investors will hold on — the CD market certainly isn’t rewarding their good patience.

For the week, bank CD rates, as measured by the BankingMyWay Weekly CD Rate Tracker, continued their year-long slide:

Description                        This Week                   Last Week

60-Month CD                         2.076%                        2.096%

48-Month CD                         1.765%                        1.781%

24-Month CD                         1.192%                        1.198%

12-Month CD                         0.747%                        0.752%

Six-Month CD                         0.488%                        0.492%

Three-Month CD                    0.312%                        0.316%

As always, there are opportunities out there for enterprising CD rate hunters. Check out the CD deals via BankingMyWay’s CD Rate Search. It’s the most thorough review of bank CD rates in the market.

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