CD Rate Trends This Week: Oct. 20

Are certificate of deposit investors souring on the Federal Reserve?

Even though there are no mass protests at the Fed's front door, you have to wonder if there will be soon, as CD rates are scraping the floor largely thanks to the Fed’s determination to artificially sit on interest rates.

Sure, investors did see some upward movement at the high end of the CD scale. Four-year CDs rose to 2.05% from 2.01%. Five-year CDs climbed as well to 2.35% from 2.30%.

Two-year CDs also bumped up a bit, to 1.53% from 1.5%.

One-year CDs, as measured by the BankingMyWay National CD Rate Tracker, also hiked upward to 1.06% from 1.04%.

But short-term CDs didn’t fare as well. Three-month CDs fell to 0.45% from 0.46%, while six-month issues slid to 0.69% from 0.7%.

At 0.45%, the three-year CD is at its lowest levels since 1989. Six-month CDs are at 25-year lows, as are five-year CDs.

Commercial bank rates also are seeing all-time lows, at 0% to 0.25%. With a tepid economic wind at its back, the Fed isn’t showing any signs that it will hike rates this year. The even money on Wall Street suggests that the earliest the Federal Reserve will lift interest rates is March 2010 — and even then the Fed might only raise rates by a quarter of a point.

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