Top Savings Rate Drops to 1.55% APY - CD Rates Steady

Savings and CD rate averages have held steady over the past two weeks although the top savings rate has dropped significantly.

Savings Rates

Average rates dropped slightly from 1.34% APY to 1.31% APY. The top rate has come down significantly. Two weeks ago the top rate was 1.75% APY and now the top rate is 1.55% APY. One month ago, the top rate was 2% APY. So, in four weeks the top rate you could get on a savigns account has fallen significantly. For promotional rates, Everbank remains on top with their 3-month introductory bonus rate of 2.25% APY. After the three-month period, the rate drops down to 1.26% APY for a blended one year APY of 1.51% APY.

CD Rates

The average 1-year CD also remained steady at 1.57% APY for the fourth week in a row. First City Bank continues to hold the top spot with a 1.80% APY CD. First City Bank is in bad financial shape and has been operating under a FDIC Cease and Desist Order since 10/09. Acacia Federal Savings has moved into the second sport with a 1.65% APY CD.

The average 3-year CD rate is the only average to dropped slightly from 2.43% to 2.42% APY. The top spot continues to be occupied by USAA Federal Savings Bank, which offers a 2.65% APY CD with a minimum deposit of $175,000. The next highest rate is Acacia Federal Savings at 2.50% APY and a $500 minimum deposit.

The average 5-year CD rate remained steady this week at 3.12% APY after dropping from 3.17% APY four weeks ago. The average is now closing in on the 3% mark.

USAA continues to have the top rate at 3.31% APY. Everbank which holds the second highest rate dropped from 3.30% APY to 3.26% APY. A month ago Everbank was offering the same CD for 3.39% APY.

The spread between savings and 3-year CD rates dropped slightly and now stands at 1.11, from from a high of 1.24 in March. The ratio between 1-year CDs and 5-year CDs has remained steady over the past month and appears to have topped off. What does that mean? Both 1-year and 5-year CD rates have stopped dropping and are maintaining their relative ratios. The flat trends of the past month seem to support this conclusion. If the economy continues to improve I expect we'll see longer term CDs begin to move up first, followed by shorter maturities once the Fed looks poised to raise the Fed Funds Rate.