CD rates for July 28, 2011

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  • 0.44% (1-year CD yields)
  • 1.62% (5-year CD yields)

Here's a look at the state of CD rates from's weekly national survey of large banks and thrifts conducted July 27, 2011.

CD rates were mostly static in this week's rate survey.

The average one-year CD yield stayed put at 0.44 percent for the seventh week in a row. The average five-year CD yield followed suit, staying put at 1.62 percent for the third week in a row.

Jumbo CD yields were also unchanged. The average one-year yield stayed at 0.48 percent and the five-year jumbo CD yield cruised for another week at 1.64 percent.

The average money market account yield, however, dropped 1 basis point to 0.16 percent.

With less than a week left until the U.S. government faces defaulting on its obligations, there's still plenty of optimism that a deal will be reached.

However, even if default is avoided, the sterling AAA credit rating the U.S. currently enjoys may still be in danger, Mohammed El-Erian, CEO of the PIMCO mutual funds organization, wrote in a blog on Huffington Post on Sunday. The blog was titled "Americans can ill-afford this debt ceiling debacle."

A downgrade in the nation's credit rating would be bad news for everyone who borrows. But it wouldn't do savers any favors, either. While rates charged for loans would increase, banks have no incentive to raise rates on deposit products.

"Bank deposits are going to be the consumers' safe haven, and banks are already swimming in deposits. Loan demand is already weak. If you raise borrowing rates and flood banks with a lot more deposits without loan demand to match, that is not going to do anything to help deposit yields," says Bankrate's senior financial analyst, Greg McBride, CFA.




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