Average CD Rates Flat - Top CD Rate at 3.41% APY

After last week's big drop, CD rates were flat this week. The spread between 5-year and 1-year CDs hit a new record high.

The average 1-year CD rate followed last week's 12 basis point drop with a much smaller 3 basis point drop as rates fell from 1.71% APY to 1.68% APY. 1-year rates are not at their lowest point since we began tracking. Despite the decline in the average, the top rate remains a 2% APY CD from First City Bank. First City is offering a top rate but be sure to stay under FDIC insurance limits - it is rated as 0 stars according to Bauer Financial for its safety and soundness.

The average 3-year CD rate remained at 2.57% APY. USAA Federal Bank continues to have the top rate with a 2.81% APY 3-year CD. The minimum deposit for that rate is $175,000. While you need a military connection to quality for their loan and insurance products, you do not need one to take advantage of USAA deposit products. In the banking world, USAA is highly regarded for its banking products and services. If you don't have $175,000 to deposit, then Bank United is offering a 2.75% APY 3-year CD with a minimum deposit of only $5,000.

The average 5-year CD rose 1 basis points to 3.20% APY after plummeting 13 basis points last week.

USAA continued to have the top 5-year CD rate at 3.41% APY but it does have that $175,000 minimum balance.. Everbank has the second highest rate at 3.33% APY with a minium balance of $2,000. One thing to note about Everbank is their penalty for breaking a CD early. According to their terms:

"This penalty will be equal to one-fourth of the total interest that would have been earned on the principal balance of the account if funds had not been withdrawn prior to the maturity date." On a 5-year, 60 month CD, that's 15 months of interest which is a little higher than others in the market (and we try to avoid penalties over 1 year's interest on 5-year CDs).

The spread between savings rates and CD rates has come down slightly over the past couple of weeks, although it is still very high by historical standards. That means a longer-term CD is paying more versus a savings account than it has in the past. The spread between 1-year and 5-year CDs hit a new record high this week. You can now earn on average 1.52% APY more in a high yield 5-year CD than a high yield 1-year.