Title: CD Rates Continue to Rise Following Federal Reserve’s Rate Pause
Introduction:
Yesterday’s decision by the Federal Reserve to maintain interest rates has not deterred banks and credit unions from boosting CD rates. In just one week, the number of nationwide CDs offering a rate of 5.65% APY or higher has increased from 15 to 21. The highest nationally available CD rate currently stands at 5.80% APY, with flexible terms ranging from 12 to 17 months.
The Rise in CD Rates:
The top CD rate of 5.80% APY is offered by Credit Human, allowing customers to choose any CD term between 12 and 17 months. The Federal Savings Bank is also offering a 5.80% APY on a 1-year certificate. With these developments, the count of nationally available CDs paying 5.65% or better has risen to 21, up from 15 the previous week.
Record-breaking Rates:
For those with jumbo-sized deposits, the highest nationwide rate is 5.85% APY, available for a 170-day term. In addition, the best 3-year CD currently offers a rate of 5.23% APY. Last week also introduced the option to earn 5.00% on a 4-year CD, marking the first time rates for this term have reached the 5.00% range.
The Federal Reserve’s Stance:
The Federal Reserve announced a rate hold, maintaining the benchmark rate at its highest level since 2001. However, Fed Chair Jerome Powell emphasized that the pause is temporary and rates may be increased in the future based on economic data. The Fed’s projections reveal that most members anticipate at least one more rate increase in 2023, with a potential decrease in rates in 2024.
Implications for CD Rates:
Until the end of the Fed’s rate-hike campaign becomes clear, CD shoppers can only speculate whether today’s hold is temporary or permanent. Another potential rate hike in 2023 would likely further increase CD rates. Ultimately, the end of the Fed’s campaign will signal that CD rates have reached their peak.
Conclusion:
Despite the Federal Reserve’s rate pause, CD rates continue to climb, with more banks and credit unions offering competitive rates. Customers can take advantage of the highest available rates, including the record-breaking 5.85% APY on jumbo certificates. It remains to be seen how long these exceptional rates will persist given the uncertain future path of the Federal Reserve’s rate policy.
Disclaimer: The rates mentioned in this article are based on Investopedia’s daily rate research and do not necessarily reflect the national average rates. Customers are advised to shop around for the best CD rates.