Highest 5 – year CD rate, slides to 3.05%
This makes the 19th straight week that 5 year CD rates have fallen. One would think that the decline would have to end sometime, but considering that the average 5 year CD rate is hovering around 2.7%, there’s still some room for the top performers to fall.
Currently the highest nationally offered 5 year CD is being offered by Nationwide Bank. Nationwide requires an investment of only $500 to get the account open, making it available to almost any investor. Astoria Federal Savings is also offering the same deal on their 5 year notes.
The lowest rates being offered are 2.3% for a $1000 minimum investment. Allstate and Heritage Banks are offering this palsy rate.
For most of these banks, the current numbers represent record lows in the 5 year CD yields. If that doesn’t give you a warm and fuzzy picture of the banking industry and the economy in general, nothing will. Because the rates of return are so low, investors are unwilling to purchase the CDs, which further exacerbates the banks’ liquidity situation. Given this vicious circle, it’s unlikely that things are going to improve anytime soon in the 5 year CD market.
Some in the banking industry are bashing the latest Federal Reserve policies and blaming them for the low interest rates. At this point, who knows? The financial situation is so messed up that it’s simply a guessing game what will happen next. These days no one has a clue, if they ever did, what ne calamity the market will bring next. One thing does seem sure; 5 year CDs will not be a good investment for the foreseeable future.