Here's a look at the state of CD rates from Bankrate.com's weekly national survey of large banks and thrifts conducted May 19, 2010.
CDsYields: 0.7 percent (1-year CD yield); 2.12 percent (5-year CD yield)
Following the trend of the past several weeks, CD rates are down for some maturities in the latest rate survey.
The average yield on a one-year CD lost 1 basis point to 0.7 percent. That is the lowest rate recorded for the one-year yield since Bankrate began tracking it in October 1983. The yield on the five-year maturity remained 2.12 percent.
Jumbo CDs fared no better this week, with the yield on the one-year CD yield losing 1 basis point to come in at 0.75 percent. The average yield on a five-year jumbo CD also fell 1 basis point to 2.1 percent.
The average yield on money market accounts stayed the same, at 0.22 percent.
On May 19, The Los Angeles Times' website published an article by Michael Hiltzik that could serve as a warning to CD investors.
The subject of the article, Daniel J.B. Mitchell, invested in a CD with E-Trade Bank. When the CD matured, E-Trade gave him the option to roll over the funds to a new 30-month CD at "prevailing rates."
He checked online and found that the average rate should have been between 2 percent and 3 percent. He soon found out that the prevailing rate applied to his new CD was 0.65 percent. By the time he knew what the rate was, the grace period had passed and he would be assessed a fee of $16.64 to get out of that stinker of a deal.
The article goes on to detail Mitchell's struggle with regulators over what he perceived as a bait-and-switch, but for other CD investors, the moral of the story is: Be clear on the rate you're going to receive before rolling over your investment.
For some of the best returns available across the country, check Bankrate's high-yield CDs and high-yield money market account tables.
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-- Sheyna Steiner