Although the Federal Reserve has yet to boost interest rates, yields on many certificates of deposit have begun to rebound in anticipation of Fed rate hikes in the second half of 2004. The average two-year CD yield increased from 1.7 percent to 1.75 percent, and the average five-year CD yield increased from 2.99 percent to 3.06 percent in Bankrate.com's weekly national survey of large depository institutions. While yields on maturities longer than one year are rising at a faster pace than shorter maturities, they are not yet a compelling investment option. Investors should favor maturities of one year and less, including money market accounts, and wait well into 2005 before considering longer maturities.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040122/FLTHLOGO ) Deposit averages from Bankrate.com's national CD survey Money market account: 0.46%, unchanged from last week 6-month CD yield: 0.94%, unchanged from last week 1-year CD yield: 1.17%, up from 1.13% last week 5-year CD yield: 3.06%, up from 2.99% last week
"Average yields for CDs with one-year or longer maturities have been rising by five or six basis points a week," said senior writer Laura Bruce, who covers savings for Bankrate. "Still, you'd have to buy a five-year CD to beat inflation, and the return really isn't worth tying up funds that long. The point is, rates do appear to have begun the long-awaited upward trend."
Investors can do much better than the average by using Bankrate.com's rate tables to shop nationwide for their FDIC-insured money market accounts and certificates of deposit. This week, Bankrate.com found six institutions yielding at least 2 percent on money market accounts. Bankrate.com also found ten institutions paying at least 1.8 percent APY on six-month CDs, and nine institutions paying at least 2.2 percent on one-year CDs. All yields are available nationally to customers who do not have an existing relationship with the institution.
Bankrate.com conducts two surveys each week for money market accounts and CDs:
* The 100 Highest Yields survey is conducted weekly to find the highest- yielding CD and money market accounts available to consumers nationwide. * Bankrate.com also conducts a weekly national CD survey, which compiles the rates from the largest banks and thrifts in each of the 10 largest U.S. markets to arrive at a national average.
To see data from Bankrate's 100 Highest Yields survey, go to http://www.bankrate.com/ and click on "CD/Savings."
About Bankrate, Inc.
Bankrate, Inc. owns and operates Bankrate.com, the Internet's leading consumer banking marketplace. Bankrate.com averages 5 million unique visitors per month, according to comScore Media Metrix, which ranks Bankrate.com first in unique visitors in the "Financial Information and Advice" category. Bankrate.com reviews more than 4,800 financial institutions in more than 300 markets in 50 states. Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes and small business finance. It is the leading aggregator of more than 250 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! , America Online , The Wall Street Journal and The New York Times . Bankrate.com's information is also distributed through more than 100 national and state publications. The Company's stock is included in the Russell 3000 Index and the Russell 2000 Index.
For more information contact: Paula Sirois, PR for Bankrate, Inc. 561-630-2400 x1499 psirois@bankrate.com
CONTACT: Paula Sirois, PR for Bankrate, Inc., +1-561-630-2400 ext. 1499, psirois@bankrate.com
Web site: http://www.bankrate.com/
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