Things are getting topsy-turvy in the certificate of deposit marketplace, with some short-term CDs outperforming ones that go longer up the yield curve.
Let’s take a look at three-month and six-month CDs as an example. Currently, the BankingMyWay Weekly CD Rate Tracker shows their rates as follows:
- Average three-month CD = 0.29%
- Average six-month CD = 0.454%
OK, that fits the script — the longer term CD pays out better than the shorter one does, so the world is in its proper orbit.
But poking around a bit reveals a much different result.
For example, Flushing, N.Y.-based iGObanking is offering a three-month CD that pays out 1.35% APY with a $500 minimum investment. That actually pays out higher than a host of six-month CDs on the BankingMyWay CD Rate Search, including these:
And even more than New York-based small financial institutions, which typically offer more competitive rates:
- Mohawk Valley Federal Credit Union = 1.31% APY
- Massena Savings & Loan Association = 1.22% APY
This is what we mean by topsy-turvy.