When the Fed makes a move, or even if it leaves rates unchanged, it affects your wallet. Here’s how the latest Fed announcement will affect interest rates on certificates of deposit.
Yields on long-term CDs, one-to-five-year maturities, range from 1.80 percent to 3.61 percent.
On the shorter end, the average yield on a three-month CD is 1.46 percent and 1.57 percent on the six-month.
Money market accounts are averaging 1.00 percent.
Best moves now:
Until the Fed makes a move to hike interest rates, rates on deposit products, such as CDs and money market accounts, will continue to stagnate.
If you have a laddered CD plan, stick with it. If a rung is coming due, replace it with the proper maturity. If you have a five-year ladder that was started even a couple of years ago, you have some CDs earning a very good return in comparison to what is offered today.
If your five-year rung is maturing, you may want to shop around and see if another institution is offering a better rate on the five-year than your present institution. There’s no law that says you have to have all the rungs in the same bank.
— Posted: Sept. 24, 2002