CD Rate Trend Index

The yield curve continues to steepen as buyers become more cautious in purchasing U.S. Treasuries. Talk of the U.K. losing their "AAA" rating started discussions of not if but when the U.S. may lose its coveted notion as a "risk free" investment. Worries of financial Armageddon have passed and safety conscious savers are now grumbling over negligible interest rates.
The extension of FDIC coverage gives CD holders the ability to reach for yield with more peace of mind. The falling U.S. dollar is something to be concerned with as commodity prices have started their advance again. Risk adverse savers have little in the way of options in garnering higher yields. Those who can tolerate a little more risk should look at non-hedged short- to intermediate-term international bond funds. The potential to gain from a weak U.S. dollar and higher foreign interest rates may be appealing for some. Rates on the 30-year U.S. Treasury bond climbed another 26 percent to a high of 4.60 percent before settling down a bit. This is nothing compared to the five-year rates which skyrocketed over 50 percent last month touching 2.5 percent.
Be a little more patient with cash and look to start extending duration on short-term investments over the next two quarters.
Edward W. Gjertsen II, CFP, vice president, Mack Investment Securities, Glenview, Ill.

With the increase in interest rates recently, we expect there to be a digestive process and thus, we expect rates to remain fairly unchanged for both short and longer term maturities over the next month.
Separate from CDs, we are finding good value in investment-grade corporate bonds. It is not uncommon to get from 4 percent to 6 percent yields to maturity depending on the company and the maturity. We are keeping most maturities from 6 months to 6 years and laddering. Also, be careful not to put more than a few percent in any one company overall and also diversify by industry (healthcare, financial, utilities, etc.).
Herbert G. Hopwood, CFP, CFA, president, Hopwood Financial Services Inc., Great Falls, Va.

I think there is very little chance for increased yields over the short term. The steepening yield curve indicates a recovery on the horizon and then we should see rates move higher. If you comparison shop between banks there are still opportunities to find some relatively attractive yields on new accounts if you don't mind opening money markets or CDs.
William Z, Suplee IV, CFA, CFP, Structured Asset Management Inc., Paoli, Pa .

Net interest margins contracted at all but the largest banks during Q1, and this just puts more downward pressure on deposit yields.
Greg McBride, CFA, senior financial analyst, Bankrate.com

We'll likely continue to see a downward bias on CD yields of 1 or 2 basis points per week on some maturities, while others stagnate. It will take a Fed move to really move the shorter-term CD rates.
Laura Bruce, senior reporter, Bankrate.com