For July 2009, where are the current highest certificate rates? Have interest rates been moving up, down, or sideways? Investment rates throughout the spectrum of opportunities continue to be volatile and downright nerve wracking.
In June, the bond market pushed yields up to yearly highs for most terms. The 10-year treasury jumped above 4%. It has since fallen back to 3.50%. The higher rates gave many concern that the housing recovery would be further delayed. With the 10-year back down, that worry seems to be diminishing. However, today the unemployment rate continued to sneak up to 10%. I believe in the state of California it is hovering around 12%. Despite Fed Funds remaining around 0.25%, the bond movement did put upwards pressure on CD rates. For 1-year certificate of deposit rates, we saw an average increase of about 0.15%. On 5-year CDs, the increase was even higher, around 0.25%, and we saw a high of 4.00%. One bank even offered a 10-year at 5.10% (Yes, it would be a good idea to join our list).
The economic news that has been released over the last few days has not been hopeful. As a result, most feel the low Fed Funds rates will linger for some time and we've seen yields falling again. Especially for terms of 2-years or less. But, even some of the longer-rates have decreased. One credit financial institution had a 4.0%, 5-year CD for about 3-months.
For July, the interest rate was lowered to 3.50%. At some point, the Fed will have to reverse course and begin |increasing rates. I'm guessing that will be in six to nine months. However, rates will probably increase slowly to avoid stalling the recovery.Some of the Mega-banks that received TARP funds have been making requests to pay them back. Would you believe, they don't want the Government looking over their shoulders? Although, I'm a fan of low regulations, I think they need some serious watching over. It really doesn't seem like the banks have learned anything, except that the Big O will rescue them.
Other June happenings, commodities began to increase, especially oil. As a result, gas prices rose to around $2.50 per gallon. In California, they have moved up to 2.95%. Leave it to California. Earlier in the week, California got permission to put even more strict emission standards on the books. That is not going to help California's economic recovery. And of course, CAs big budget fight is spilling over to issuing IOUs.
Drop by our best bank CD rates site for some great deals. Keep some dough invested in cash instruments for emergencies. We will continue to keep you up to date and help you compare CD rates. If you are making certificate of deposit investments, be sure they are FDIC insured (banks) or NCUA insured (credit unions). Plus, checking the soundness of the bank or credit union is a good idea. With so many banks in a troubled state, you don't want to take the time to make a CD investment and have it closed a shortly-there after. On July 2, the FDIC closed seven banks and they closed five banks the week prior to that.
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