CD Rates Calculated On the 17th of the Month
Certificates of deposit are a source of good investment and a great yield return for investors willing to put in their savings in a financial product, for a specified period of time.
CDs are mostly popular with people who want to invest savings for a good return that will provide them with comfort in their senior years. Many even reinvest their 1 or 2 year certificates of deposit in a 5 year CD and engage in the art of CD laddering. The main goal of investing money in a certificate of deposit is to safeguard the savings for the upcoming years and earn a decent return on the invested money for the time of the years of the CD.
But while many do invest to earn a good yield, the low interest rates imposed by the Federal Reserve are the main problem. Back in 2008, when the economy was in turmoil and suffering the effects of the crash in the housing segment of the market, the Fed restricted any rise in the interest rates and decreased them to an all time low. Doing so was a necessity as this authority is responsible for making sure that the economy is stable and keeping a check on the unemployment rate of the country, and as such, a restriction on the interest rate was the right thing to do to bring stability back to the economy.
What many experts assert is that while it might have been a necessary move at the time, keeping the rate at an all time low has caused concerns in people who have invested in CDs or are thinking of investing their money in this financial product. It has long been expected that the Feds will eventually announce a hike in the rate which will have a subsequent effect on the consumer.
But the Feds announced on the 17th of the month (September) that there will be no hike in the interest rates, which dashed hopes of many CD savers. Different experts cite that even if the Feds were to announce an increase in the rate, it will take some time for the impact to affect the certificate of deposit savers.
With no hike in the Fed rates, the CD stands at 0.28% for a 1 year CD. And the 5 year certificate of deposit will give a yield of 0.86%.
The Jumbo CD rates however, soared and gained by one basis point. For calculation purposes, it is important to know that a basis point is equal to one hundredth of 1%, or is 0.01%.
The Jumbo CDs now require an amount of $100,000 deposit. The average one year jumbo certificate of deposit yield was calculated to be 0.31%. The average evaluated 5 year CD yield was 0.91%.
For the regular sized deposits, the average one year CD yield for a 3rd week consecutively was 0.28%. The average 5 year yield for 2 consecutive weeks was 0.86%.
The average calculated for the money market account yield was estimated at 0.09%. This was the same for 49 consecutive weeks in a row.
