CD Rates Stuck At 1.30% – Progress Not As Expected

Anyone who has been investing in 12 month CDs has had quite a disappointing time this year. With only an incrementally improved rate of 1.30%, the market is not presenting any solid grounds for better future expectations.

In the September of last year, many were excited to observe that the top available return on a national level shot to 1.25% APY. This had served as a welcome contrast to the average rate calculated a year before, in which the top recession had been calculated to be at its worst level of the post recession period, at 1.05% APY.

It is again that time of the year, and where has the market reached now? Just an incrementally better rate of 1.30% APY! The yields were found to reach a 4 year high rate when the Colorado Federal Savings Bank, made a payment of 1.35% APY within the 5 weeks of the spring period. Yet all this improvement has been a part of the regime of taking two steps forward and one step back anyway.

The E-loan has been found to currently lead in the market, with making a payment of 1.30% APY at the end of July this year. The Portal Community Bank runs the portal and has around 50 branches spread throughout New York, South Florida and New Jersey. The FDIC has fully insured all the deposits made by the Popular Community’s deposit, including the ones made through the E-loan portal.

According to banking experts, the Popular Community is a fast growing bank that has been in the act of bolstering all its deposit reserves in order to effectively fund an ever escalating lending portfolio. In order to effectively draw and attract the deposits, the E- loan portal now has to offer the top 1 year return on a national level, as well as on lending rates of 2-, 3-, 4- along with 5 year CDs.

There has been much speculation in the market about how long the rates given by E-loan will last. Manuel Chinea, who is the chief operating officer of the efficient Popular Community Bank, shared his views on the matter when presented with the question, and said that they expected the rates to stay competitive throughout the rest of the year. But he also stressed that this speculation did not mean that they could not pull back a particular term while they managed the linked durations of their entire deposit portfolio.

The Fed is expected to reverse its former course and announce an increase in the first rate for over a decade, which is estimated to be announced as early as the upcoming weeks.