UPDATE: Citibank has lowered the rates on its 6 month CD. Please check the Citibank website for the most up-to-date rates.

Citibank is getting a bit more aggressive with its rates and is offering a competitive 6 month CD paying 4% APY. There is a minimum balance requirement of $500 to open the account.

4% is competitive when stacked against the best 6 month cd rates.

As is expected from a large bank, Citibank has an all electronic process for opening an account online. You verify your identify by answering a few financial questions which they match against a credit report. Once you are verified, the account is opened and you can transfer money into it from another via using your checking account number and your routing number. Or, you can fund it via a credit or debit card.

• Compare rates on 6 month certificates of deposit (cds).
  

Bank of America is offering a 4.25% APY 90 day (3 month) or 179 day (6 month) cd rate for some of the professional organizations listed on the site - i.e. The Society of Mechanical Engineers - but they are open to everyone. When I contacted Bank of America about the CD rates they said no special validation was needed to open an account. That means everyone is eligible.

Update 10-17-2008: We've received reports of technical problems on the site and the rate not being honored at 4.25% APY. The rate actually increased today to 4.28% APY for the Society of Mechanical Engineers. I called Bank of America and was told by the CSR that it was a valid online only rate. BankMan from bankdeals.blogspot.com also called and was told he could apply online or via the phone for the Defenders of Wildlife account. I have attached a screenshot below to show that I wasn't dreaming.

As the BestCashCow rate table shows, 4.25% APY is better than the top 3 month cd rates and one of the top 6 month cd rates. We didn't put the offer into the BestCashCow rate tables because it's not their standard cd rates. The minimum balance is only $1,000.

The term on the CD can actually be anywhere from 90 days to 179 days. When you apply you'll enter the number of days in that range.

To apply, follow these steps:

1. Go to BankofAmerica.com

2. Go to My Expression Banking ( you can click thie link or find it on the homepage).

3. Choose Organizations and then Professional from the drop-down.

4. Select the American Society of Mechanical Engineers

5. Go to Certificates of Deposit, check the rates, and then follow the steps to apply.

View the top savings and money market account rates.

In somewhat of a surprise move, the Federal Reserve cut rates by 50 basis points today. In addition, the central banks of Europe, Canada, the UK, Switzerland, and Sweden also lowered their rates. The global scope of this rate reduction is unprecedented.

While the timing was a bit unexpected, we've been foecasting a rate cut for some time. Yesterday, markets pegged the probability of a rate cut in October at greater than 80% with a drop to 1.25% being the most likely scenario. But that's not the end of it. Markets believe there is a 70% change that the Fed will drop rates to 1% by December. It appears that the markets expect further cuts.

These numbers reflect growing awareness that the financial system is in severe crisis and that the recently passed bailout package will not be enough to right the ship. The Fed is loading all of its weapons to try and reinflate the economy and get banks lending again.

Rates on savings accounts cds, and money markets will drop. In fact, we've already seen falling rates on some products. If you plan on opening a CD, you might want to consider locking in now. If the Fed Funds Rate drops, the rates on savings accounts and certificates of deposit will also drop.

For my ongoing commentary on interest rates and where they are going, please visit my Fed Funds Rate Discussion.

• View the best cd rates.
• View the best savings account and money market account rates.