Title: National Banks and Credit Unions Offer Competitive CD Rates, Future Increases Possible
Subtitle: Investors urged to compare rates amid uncertainty
In recent data released by Investopedia’s daily rate research, the latest findings reveal the top CD rates offered by national banks and credit unions for various terms. As per the report, these rates have already reached record levels this year, and there is potential for further increases in the near future.
Among the most attractive CD rates mentioned, 3-month terms offer 5.36% APY at banks and 5.65% APY at credit unions, while 6-month terms showcase rates of 5.56% APY and 5.75% APY, respectively. For 1-year terms, both banks and credit unions offer a competitive 5.75% APY. Moving on to 18-month terms, banks offer 5.55% APY while credit unions offer 5.54% APY. The rates for 2-year terms stand at 5.55% APY for banks and 5.30% APY for credit unions. Lastly, for 3, 4, and 5-year terms, the rates range from 5.00% to 4.66% APY at banks and 5.13% to 4.77% APY at credit unions.
However, it is important for investors to note that jumbo certificate rates may not always offer higher returns compared to standard CDs. To make an informed decision, individuals are advised to thoroughly compare rates for different types of certificates before making a final decision.
These attractive CD rates have been driven by the central bank’s recent decision to raise the federal funds rate in an effort to combat high inflation. Federal Reserve Chair Jerome Powell has hinted at the possibility of further rate increases in 2023 if inflation persists or if economic growth accelerates too rapidly. The next Federal Reserve meeting, scheduled for September 19-20, has created divided opinions among Fed members.
Experts suggest that a rate hold in September could leave CD shoppers uncertain about future rate changes. When the Fed signals the end of its rate-hiking campaign, CD rates may have likely peaked.
Investopedia’s daily rate research tracks rate data from over 200 federally insured banks and credit unions nationwide. To ensure accurate rankings, institutions with a minimum initial deposit exceeding $25,000 or restricted availability in less than 40 states are excluded. Credit unions with donation requirements below $40 are also excluded. The full methodology for choosing the best rates can be found on the Investopedia website.
For investors seeking attractive CD rates, it is essential to consider the options offered by both national banks and credit unions, compare rates, and stay informed about potential rate hikes in the coming months.
(Note: This article was prepared using data from Investopedia’s daily rate research. The rates mentioned are subject to change based on market conditions.)
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