It has been 1 year since we wrote about the question “Will CD Rates Go Back Up In 2011” and so far rates have kept falling. Even mortgage rates are falling to their lowest levels in a year. As I write this post the United States has lost its AAA credit rating even though a default on its debt was diverted. The United States now has a credit rating of AA+ with a negative outlook, which means that the credit rating could drop again within the next 2 years unless if Congress reigns in on its overspending and debt problems.

Every program the Fed has enacted to build up the US economy has not translated into job growth or a pick up of the economy, which would translate into higher interest rates. When the Fed bought back billions of dollars worth of treasury bonds, it was speculated that interest rates would increase based on the growth of the economy and the increase of inflation. Once inflation increases so should interest rates.

In the past few weeks many CD rates were cut down a few basis points. Before the debt ceiling deal happened many were speculating that CD rates would actually increase because of Treasury yields being forced up by the small possibility of the United States defaulting. As Treasury yields increase so will interest rates, but right after the debt ceiling deal was passed, the stock market started crashing and Treasury yields actually started plummeting. Just this past week mortgage rates dropped close to 4.31%, down from 4.51% last week. It looks like CD rates will most likely continue their downward fall to record lows. How far will they go? Depends on multiple factors, but as long as the economy drags along there isn’t much hope for an increase in rates any time soon. I guess we should be asking the question “Will CD Rates Go Back Up in 2012” or more likely, ‘Will CD Rates Ever Go Back Up”. We thought last August 2010 that CD rates would surely be on the rise, since we haven’t created a magic ball and since no one can really predict the increase of rates, we made an educated guess that was completely wrong. We still have five months left in 2011 to see if rates will increase.

Here are some of the more active banks that consistently have some of the highest CD rates available nationally:

Bank of Internet cut its 12 month CD from 1.33% down to 1.20% and they also cut their short term 6 month CD rate of 1.15% down to 1.01%. The new leader for the 12 month CD term is now E-Loan at 1.26%.

First Internet Bank of Indiana currently holds the top spot for the 5 Year CD at 2.40% APY with a minimum deposit of $1,000. Discover Bank comes in second with a rate of 2.35% APY with a minimum deposit of $2,500.

If you are looking for the best CD rates, you might find better luck looking at your local credit union or a credit union that has no registration requirements like Melrose Credit Union out of New York.

You can always find the best cd rates here at www.bankaim.com.