Top Of The 5 CD Rates Have Remained Stalled This Year – A Cause For Concern

When the top 5 Cds’ national yield for the year was announced, it created expectations in the market for a bright future. With a yield of around 2.35%, APY as calculated since last fall, the expectations of all rose to anticipate an even higher average yield this summer, but it did not happen. What was anticipated to be the start of a steady beginning of a high average yield, a rate which would help lead the market to a post recession climb back to normal rate, was dashed as the Cd rates did not meet expectations this summer.

The reason for this is attributed to the actions of the Florida based Citizens State Bank. The bank stopped selling the CDs in January, all over the country, which led to a direct impact on the leading yield of 5 years. The yield dropped to a disappointing 2.25% APY and has been changing erratically over the months ever since. A 5 year yield lead resulting in disappointing results.

In the month of July, the highest available bank return on a national level, for the entire 60 months duration, has been calculated to stand at 2.31% APY, which has been offered by both the EverBank and E-Loan.

Compared to the low point APY rate calculated in the summer months of the year 2013, the recent rate is a good improvement. From 1.75% APY to 2.31% it is indeed a great jump, however, it still falls short of what was expected of the yield for this year.

Ever since the last 17 months, the leading CD 5 year return has been observed to be quite stuck in a specific holding pattern, oscillating between 2.25 to 2.35% APY rates. The only exception to the rule was the 4 day special on the offer introduced by the Live Oak Bank, for a rate of 2.50% APY.

Over the past couple of weeks, there have been many trivial increases with many trying for the lead, but not actually providing any substantial improvement in the overall 5 year yields. There were some lucky savers who purchased their CDs from a credit union or community bank. These institutions have been observed to offer top yields to the savers who are employed with a certain employer or work nearby.

Brokered CDs are another option which has been found to be outpaying the current leading national rate. The Feds imposed a restriction and artificially repressed interest rates to help the economy to recover. The agency is expected to lift the restriction and raise the rates in the year, which will improve the CD rates.