Savers didn't see much of a clear move in rates this week. The average rate for a 1-year CD grew, but average rate on a money market account was unchanged. The average rate on longer-term 5-year CDs went up.
MMA rates show no change
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.
Earning a decent return on your savings has been a difficult task for going on a decade now. That being said, there are opportunities for savers to earn multiple times the national average and still enjoy FDIC protection simply by shopping around.
1-year CD rates move up
This week the average interest rate on 1-year CDs rose to 0.34 percent, 1 basis point higher than it was last week. That's higher than the 52-week average of 0.30 percent.
A month ago, the average rate was 0.33 percent. 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 0.89 percent. A month ago, the average 5-year rate was 0.88 percent. A year ago, it was 0.83 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.
As you can see, going for longer-maturity CDs can increase the interest you earn from your deposits. 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 reduce 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're tempted by a rate but feel leery 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 3/22/2017.|
|Money market account||1-year CD||3-year CD||5-year CD|
|This week's rate:||0.11%||0.34%||0.63%||0.89%|
|Change from last week:||N/C||+0.000.01||+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."