cds

CD Rate Trend Index

October 2009
Panel: Short-termPanel: Long-term
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Will CD rates rise, fall or remain relatively unchanged? Experts and Bankrate analysts provide their insights. Search high-yielding CD and money market accounts.

At least no one on the panel thinks rates will fall.

Industry experts and Bankrate commentary
Experts' commentsShort-termLong-term
By my measurements, the equity markets are ahead of themselves. Based on forward-looking P/E ratios, lack of economic drivers and pace of the recent snapback from earlier worries, it is difficult to value stocks much higher than they sit today. We are now at a point that third quarter company profits and outlook will have to surprise to the upside in order for the momentum to continue. If it does not, stocks, as well as interest rates, will stall. The recent drift higher in interest rates will not continue if a robust recovery is not in view. And I do not think that we are there yet.
N. Barry Vosler, CFP, CRPC, AAMS, Linsco Private Ledger, DeWitt, Iowa
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While we don't expect rates to move up much, we believe that rates are too low at current levels to attract many CD purchasers. To attract additional deposits other than in money market, banks will need to offer higher yields on CDs in order to get investors to tie up their money for any extended period of time.
Herbert G. Hopwood, CFP, CFA, president, Hopwood Financial Services, Inc., Great Falls, Va.
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Bankrate's analystsShort-termLong-term
CD yields are at, or near, the bottom. But we're unlikely to see sustained increases.
Greg McBride, CFA, senior financial analyst, Bankrate.com
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If the stock market continues to rise, consumers who may have too much money parked in fixed income may push some of it toward equities. That may prompt some banks to raise their rates a smidge -- a basis point or two a week. Nothing very appetizing.
Laura Bruce, senior reporter, Bankrate.com
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Certified Financial Planners, Chartered Financial Analysts and others with similar qualifications are invited to e-mail us if interested in participating in our CD Rate Trend Index survey. Please state your professional background, title, company name and address.

About the Bankrate.com Rate Trend Index
Bankrate.com surveys experts in the financial planning, banking and mortgage industries to gauge whether certificate of deposit and mortgage rates will rise, fall or remain relatively unchanged. The deposit index panel consists of financial planners and representatives of institutions that offer FDIC-insured CDs to the consumer. The mortgage index panel consists of mortgage banks, mortgage brokers and other industry experts who are actively engaged in providing residential first mortgages to the consumer. Results from the CD Rate Trend Index are released monthly. Results from the Mortgage Trend Index are released each week.

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Product Rate Change Last week
1 Year CD 0.90%  0.02 0.88%
2 Year CD 1.02%  0.01 1.03%
5 Year CD 1.59%  0.01 1.60%
 
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