It was a quiet week for deposit rates. Average interest rates showed no change for two popular savings products, 1-year certificates of deposit and MMAs. The average rate on longer-term 5-year CDs ramped up.
MMA rates stay flat
The average interest rate on money-market accounts -- savings accounts that often pay higher rates than conventional savings accounts and come with limited check writing privileges -- was 0.11 percent this week. That's the same as last week.
Savers have had a rough time of it since the post-financial crisis decline in interest rates. While there's not much savers can do about the low-rate environment besides hunker down and wait for it to improve, it is possible to earn multiple times the national average on your savings simply by shopping around for a higher-paying institution.
1-year CD rates stay put
The average interest rate on 1-year CDs stood pat at 0.34 percent this week. That's above the 52-week average of 0.31 percent.
A month ago, the average rate was the same as it is now. A year ago, the average rate was 0.28 percent.
Longer maturities followed suit. The average rate for a 5-year CD rose 1 basis point to 0.90 percent. A month ago, the average 5-year rate was 0.89 percent. A year ago, it was 0.82 percent. Rates on three-year CDs, which split the difference between 1-year CDs and 5-year CDs, were up, rising 1 basis point to 0.63 percent.
Going long on your CD's maturity is definitely one way to earn more interest on a CD. There are trade-offs, however; if you need to access the money before the term is up, you'll likely pay an early-withdrawal penalty, and if rates rise, you'll be locked into that lower rate for a while. One way to mitigate those risks while still earning a decent return is through CD laddering.
It may go without saying, but FDIC insurance is a must-have for CDs, money market accounts and other deposit products. And if you find a rate you like but feel a little worried about its safety and soundness, Bankrate's free Safe & Sound ratings can help you do some digging into its financial situation.
Weekly savings and CD rate survey
|Results from Bankrate's survey of banks and thrifts conducted 5/17/2017.|
|Money market account||1-year CD||3-year CD||5-year CD|
|This week's rate:||0.11%||0.34%||0.63%||0.90%|
|Change from last week:||N/C||N/C||+0.01||+0.01|
Methodology: The "Bankrate.com National Average," or "national survey of large lenders," is conducted weekly. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We've conducted this survey in the same manner for more than 30 years, and because it's consistently done the way it is, it gives an accurate national apples-to-apples comparison.
To learn more about the different rate averages Bankrate publishes, see "Understanding Bankrate's Rate Averages."