National CD rates for March 10, 2011

Interest Rate Roundup
CD rate graph


  • 0.47% (1-year CD yields)
  • 1.71% (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 March 9, 2011.

Another week finds CD rates mostly unchanged in the weekly rate survey.

The average one-year CD yield slid 1 basis point to 0.47 percent after 11 weeks with no change. The average yield on a five-year CD remains 1.71 percent for the second week in a row.

For deposits of about $100,000, the average yield on a one-year jumbo CD is unchanged at 0.53 percent. The five-year yield is also unchanged, at 1.73 percent.

The average money market account yield is 0.18 percent for the third week in a row.

Long-term CD yields bounced up 10 basis points two weeks ago. According to Market Rates Insight, a rate research service for financial institutions, that upward movement could presage a rise in inflation.

"The last time inflation was on the rise was in November of 2003, when the annual inflation rate stood at 1.77 percent. It's currently 1.63 percent. In late 2003 and into 2004 the five-year CD rate started trending up in tandem with the increase in the annual inflation rate, which could be the same scenario we are facing now," writes Dan Geller, executive vice president of Market Rates Insight, in the weekly "National pricing indicators and trend analysis for deposits."

CD investors should carefully consider locking into a long-term CD now or in the near future based on relatively higher rates. Banks may be trying to attract inexpensive deposits before a rate increase from the central bank.

"It is highly likely that institutions are hedging against higher inflation, and eventually higher rates, by attracting long-term money at relatively low rates, which will yield greater net interest margins once rates go up," Geller writes.

In 2004, writes Geller, the federal funds rate, the short-term interest rate set by the Federal Open Market Committee, lagged behind rises in inflation by eight months.

There's no telling when the FOMC will act this time around, but long-suffering CD investors will definitely want to avoid being "long and wrong" on interest rates when they finally do.

Use Bankrate's rate tables to find high-yield CDs and high-yield money market accounts.

All deposit products listed with Bankrate are FDIC-insured.

Read more at Bankrate's new blog for CD investors, the CD rates blog.

-- Sheyna Steiner




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