November 18th, 2008
CD Rates on terms of 2-years or less have been trending down. For about a week after the last rate cut, there wasn’t much movement. However, as it looks like the Fed Funds will remain low for sometime and some have predicted it may even go to 0.5%, the CD Rates have been going down.
A couple of weeks ago we had a 1-year CD rate at 4.40% APY. Today the highest is 4.25%. On the 2-year, we had a 4.50% APY and today it is down to 4.45%. The 3-year and longer rates seem to be holding. The 3-year rate of 5.00% APY remains good as does the 5.25% at 5-years.
As we get closer to the next Fed Meeting, look for rates to come down further. The next meeting is December 16. As it is, the yield curve between the CD Rates and Fed Funds is quite steep.
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-- By +Chris Duncan