The Top CD Rates for The End Of August

This August we’ve seen a lot of things going on in the economy, there was a sudden fall in the market, the U.S. rating got downgraded, and CD rates dipped to its lowest in over 50 years. Now that it’s the end of August, certificates of deposit are holding steady to their numbers since last week. Below are the top ten contenders for 1 year certificates of deposit:

1. AloStar Bank of Commerce
Rate: 1.27% APY
Minimum Deposit: $1,000

2. E-Loan
Rate: 1.26% APY
Minimum Deposit: $10,000

3. Sallie Mae
1.20% APY
Minimum Deposit: $0

4. Aurora Bank
1.16% APY
Minimum Deposit: $1,000

5. Discover Bank
1.15% APY
Minimum Deposit: $2,500

6. Doral Bank
1.15% APY
Minimum Deposit: $1,000

7. Colorado Federal Savings Bank
1.15% APY
Minimum Deposit: $5,000

8. Ascencia (a Division of PBI Bank)
1.13% APY
Minimum Deposit:$500

1.11% APY
Minimum Deposit:$2,500

10. New Dominion Bank
1.10% APY
Minimum Deposit: $1,000

The National Average is currently at the low 0.41% so the rates above are already quite a steal. Now that interest rates are so low, people tend to wonder whether it’s a good idea to invest their money now. Well, the only other options are to either park their money in a savings account, or brave the volatility of the stock market. Most investors choose to play it safe by keeping their money out of the stock market, and since savings accounts always give the lowest rates, most investors choose to invest their cash in short term CD’s while waiting for the market to calm down. This could be a fairly secure investment move that can keep money safe until better times.

CD Rates Dropped Lower This Week, August 25th 2011

CD rates are either holding steady or continuing to drop. This week finds CD yields lower than last week. The average of one year CD’s dropped 1 basis point to 0.41 percent while the average for 5 year CD’s also dropped 1 basis point to 1.42%. Jumbo certificates of deposit of no less than $100,000 weren’t able to evade the drop with its 5-year jumbo rates down by a large 4 basis points to 1.46%. Thankfully, 1-year jumbo CD’s held steady at 0.45%.

Considering the state of the economy, many investors are looking to place their money in safer avenues. Generally, treasury bonds and certificates of deposits are considered to be safer than stock market picks. Despite the low yields and rates given by both types of investments, investors seem unfazed as evidenced by the $35 billion in four week Treasury bills sold by the Treasury Department even with an interest rate of zero percent.

Below are the top contenders of CD rates in different time frames.

1. 1 month CD
Lone Star Bank – 0.40%

2. 3 month CD
AloStar Bank of Commerce – 0.76%

3. 6 month CD
AloStar Bank of Commerce – 1.05%

4. 9 month CD
New Dominion Bank – 1.05%

5. 1-year CD
AloStar Bank of Commerce – 1.27%

6. 18 month CD
First Trade Union Bank – 1.30%

7. 2-year CD
Aurora Bank – 1.41%

8. 3-year CD
Discover Bank – 1.70%

9. 4-year CD
Discover Bank – 2.00%

10. 5-year CD
First Internet Bank of Indiana – 2.40%

Just like last week, AloStar Bank of Commerce beats other banks with their CD rates for short term certificates of deposit. Longer term CD’s are experiencing good rates with Discover Bank. However, most investors are only looking to put their money in short-term CD’s since the rates are considerably low. Once the market starts looking up, you wouldn’t want to have your cash stuck in a low rate for a period of 5 years or longer.

Certificates of deposits although safe investments, may trump the potential yield of money. They do however make a good and safe place to keep your cash until other investment vehicles stabilize.