CD rates for Feb. 2, 2012



I'm Greg McBride, senior financial analyst with, and here is your weekly look at yields on certificates of deposit.

Yields on long-term CDs moved a tad higher, reversing last week's move lower. The average 3-year CD inched up to 0.68 percent, the 4-year CD notched higher to 0.88 percent, and the 5-year CD is now 1.16 percent.

Shorter-term CDs - anything with a maturity of less than 3 years, really - were unchanged, holding for the 3rd week in a row.

The movement in longer-term CDs, which remain only slightly above recently established record lows, and the non-movement in shorter-maturity CDs is surprising considering last week's announcement by the Federal Reserve that interest rates will remain on hold until late 2014. Normally, such an announcement would drive rates lower, and while we didn't see that this week, it doesn't mean that we won't in the weeks ahead. What the Fed has done is promised to keep interest rates so low as to guarantee that savers will lose ground to inflation. While hoping to generate economic activity and the movement of cash into riskier investments, it leaves the fixed income investor hamstrung.

Even in this prevailing low rate environment, it is important to shop around for the best yielding CDs, savings accounts, and money market accounts. To do that, go to

I'm Greg McBride.




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