Deposits were stuck in the doldrums this week. Average rates on 1-year certificates of deposit and money-market accounts, two frequently used savings products, stood pat. The average rate on longer-term 5-year CDs remained level.
MMA rates stay put
This week's survey showed money-market accounts, which are savings accounts that often pay higher rates than conventional savings accounts and come with limited check writing privileges, are paying an average of 0.11 percent interest annually. That's unchanged from last week.
There have been substantial headwinds for savers since the Great Recession pushed deposit rates near zero at many institutions. The best way for savers to fight back may be to look for a higher rate. Some FDIC-insured banks offer rates many times higher than the national average on a variety of deposit products.
1-year CD rates stand pat
The average interest rate on 1-year CDs was unchanged 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 kept with that trend. The average rate for a 5-year CD was unchanged at 0.89 percent. A month ago, the average 5-year rate was the same as it is now. A year ago, it was 0.84 percent. Rates on three-year CDs, which split the difference between 1-year CDs and 5-year CDs, remained the same at 0.62 percent.
As you may have noticed, the longer that maturity is on the CD, the better the rate of interest you can expect to earn. There's no such thing as a free lunch, 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.
Also, don't forget FDIC insurance is a must-have for CDs, money market accounts and other deposit products. And if you find a rate you like at a bank that you've never heard of, 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 4/19/2017.|
|Money market account||1-year CD||3-year CD||5-year CD|
|This week's rate:||0.11%||0.34%||0.62%||0.89%|
|Change from last week:||N/C||N/C||N/C||N/C|
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."