This Post Is Out Of Date, Please Refer To The Newest Post – Are CD Rates Going To Increase This Year – 2011
This is a question that is frequently asked and searched for. If people knew the time frame that CD rates would go up, they would wait until the perfect time. This is a question that no one has an answer for, so is it pointless on asking it? Well no, not for speculation purposes. If you are looking for a place to stash your money, then CD’s might not be the place, at least not in the near future. As long as the U.S economy stays where it is at, then interest rates, mortgage rates and even inflation rates will stay low. When inflation increases, so will CDs and mortgage rates.
While CD rates and mortgage rates are sitting at record lows, some credit unions are taking advantage of these times by keeping their rates higher than average. Credit Unions are smaller more personal banking institutions and while some have strict membership policies, some credit unions like Melrose are making it easier for the average person to join. Melrose Credit Union currently holds the top spot for the 12 month, 2 year, 3 year and 5 year CDs, all the while, major banks are lowering their average CDs to record lows. Just take a look at Bank of America’s CDs and their news release about dropping their longer term CD rates.
CD rates may increase starting in early 2011, but that is just speculation. As long as the U.S economy lags and continues its meager growth rates, interest rates of all kinds will lag as well. If you are looking for a place to stash your money, a savings account is probably the place to start looking. Having a high yield savings account will allow your money to earn interest and keep it free from being locked up in a Certificate of deposit. By being locked into a certificate of deposit with such a low interest rate, even if rates increase by the beginning of 2011, you will be stuck at such a low rate.
You will want to avoid long term CDs, such as the 5 year CD which is currently sitting around 2.60% and long term Bonds. Any investment that locks your money up at these low interest rates and does not move, will be an investment worth avoiding. Stocks and savings accounts might be the way to go until the U.S economy begins its recovery.
The next question that should be asked is, how low will CD rates go?