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With Black Friday beckoning, perhaps that infamous holiday moniker fits bank savers like a glove.

Certificate of deposit rates remain on a downward spiral, even as most mortgage rates are moving up the scale. Black clouds are indeed hovering over the CD market.

The decline in CD rates isn’t an “off the cliff” event. Instead, it’s more of a steady, inch-by-inch decline that has been happening every week with the frustrating regularity of leaves piling up on the doorstep or the Redskins falling out of contention by Thanksgiving Day.

Look at the average five year CD, as measured by the BankingMyWay Weekly CD Rate tracker. The rate fell by 16 basis points – from 1.606% to 1.590%. Or how about the other end of the line, where the six month CD fell by just 10 basis points, from 0.370% to 0.360%?

Hey, CD rates can fall – that’s just a fact of life for bank savers. But when rates fall like clockwork, week after week, sooner or later bank savers just throw up their hands and cry “uncle”. After all, what’s the point?

The Federal Reserve sure isn’t helping. Its second round of quantitative easing (“QE2”) is certainly doing its job as far as bank rates go. Last week’s consumer price index (CPI) number showed scant evidence of inflation – a primary goal of QE2 is to keep inflation off the table.

While a deeper look at the CPI numbers shows too much reliance on housing prices (they’re going down because they were too high in the first place, not because of deflation), for now inflation seems to be limited as we head into the high-volume holiday shopping season.

As long as inflation is out of the picture, there is little reason for the Fed to hike interest rates – a trigger that bank savers really need if interest rates are to take off again. According to CME Group, which tracks Federal Reserve Interest Rate Futures (yes, there’s an index for that), the odds of the Fed boosting interest rates by June 2011 dipped from 16.9% to 14.2%. Even further along in the calendar, the odds for that happening by September fell from 44.3% to 37.7%.

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That sentiment has really hit CD rates hard. Remember Regular readers know that the bank’s CD rates are a regular item on our rate deals every Wednesday. But has cut its CD rates after months of keeping them highly competitive. We’d be surprised if more banks don’t follow suit – the demand for higher rates is there, but the appetite for providing them is not.

While that’s no certainty, it probably will happen. That’s why getting good rates now, while you still can, is paramount for bank rate investors. It’s just that they’re hard to get these days. For proof of that, let’s take a look at this week’s CD rates, as calculated by the BankingMyWay Weekly CD Rate tracker:


Description            This Week         Last Week

60 Month CD            1.590%        1.606%
48 Month CD            1.339%        1.357%
24 Month CD            0.827%        0.843%
12 Month CD            0.542%        0.559%
6 Month CD            0.360%        0.370%
3 Month CD            0.226%        0.232%


It’s not easy, but finding good deals on CDs is still doable. Start at BankingMyWay’s CD Rate Search. Week to week, it’s the most thorough review of bank CD rates in the market.

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