Many economists and financial experts expect the Federal Reserve to keep interest rates low for an extended period of time, which may stretch well beyond the second half of 2010 which is when many had predicted rates might increase.
Because of that savers will continue to be at the mercy of issuing banks when it comes to CD rates. Today's market conditions favor the issuer, "which means there is a strong demand for safe assets," says Bill Larkin, fixed-income portfolio manager at Cabot Money Management.
Banks can stack the decks in their favor when creating their deposit products, installing features that supplement their income while downplaying CD rates for investors.
When "the issuer gets to state the conditions of the debt ... you have lots of low coupons, low yielding and lots of call features in bonds and CDs," says Larkin.
"When it goes the other way and inflation becomes a fear and people are more into stocks and less in bonds a lot of the bonds have high coupons and no call features, all sorts of features that benefit the saver," he says.
In the most recent Interest Rate Roundup, the average yield on one-year CDs fell to the lowest rate recorded since Bankrate began tracking rates in October 1983, 0.7 percent. Despite that, there are still some worthwhile CD rates out there.