Bank certificate of deposits finish 2009 with abysmal rates
Posted on December 29th, 2009
For bank deposit investors, the year of 2009 has been a year of extremes. The beginning of 2009 coincided with the first, and most severe half of the banking crisis which left many of the large national institutions desperate for funds and thus competing against one another for consumer deposits. Through this competition some of the most lucrative returns (through CD rates, money market rates, etc) were provided to consumers with excess cash seeking FDIC insured investments. This, needless to say, is no more.
A recent NYTimes article was sent in to BankVibe regarding the current state of bank CD rates. Upon reading the article you immediately gain a better understanding of how bleak the situation has become.
Unfortunately for us savers, the government’s response to the imminent collapse of some of the nations largest financial institutions may not have had our best interest in mind. The $200 billion spent on the bank bailout has allowed banks to pass on practically no returns in the form of savings rates to customers.
The outrage, however, lies in the audacity in which some of these banking executives possess — by proclaiming a 1.2% return on a “Savings Plus Account” as a “great rate” — which is what a recent CitiBank advertisement has done. To make matters worse, upon reading the fine print you notice the this rate only applies to balances of $25,000 and above. Shameful.
The NYTimes article goes on to state that in some cases people are actually losing money by opening these deposit accounts after the rate of inflation and potential fees that come with the banking product are factored in.
Timeline of Interest Rates Paid on CD’s throughout 2009:
- January 2009 – Elevations Credit Union offers a 7 month CD yeilding 7.0% APY
- Feburary 2009 – Regal Financial Bank offers 4.0% APY on a 12 month CD
- March 2009 – Navy Federal Credit Union offers 3.75% APY on a 12 month CD
- April 2009 – A 4 month online CD yields 3.0% APY by Danvers Bank
- May 2009 – A 12 month CD yielding 3.0% APY is offered through Melrose Credit Union
- June 2009 - Quantum National Bank offers a 12 month CD yielding 2.76% APY
- July 2009 – WYMAR Federal Credit Union offers highest CD rates in the country: 12 month CD yielding 3.30% APY with a minimum deposit of $5,000.
- August 2009 – Central Sunbelt Federal Credit Union offers 2.76% APY on a 12 month CD
- September 2009 – The best CD rates in New jersey (Newark) are only paying 2.50% APY
- October 2009 – The best CD rates in North Carolina (Charlotte) are only paying 2.25% APY – and that’s for a 5 year CD.
- November 2009 – The best 7 year CD rates are only paying 4.0% APY
- December 2009 – The best 6 month CD rates in Florida beat the national average by almost 2 x – and they only pay 1.76% APY.
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- Doral Bank Direct: CD rates and Review
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- JustBankIt.com – CD Rates and Review
- Making the Switch to a Credit Union
- 15 month CD “special” rate through Enterprise Bank of South Carolina
Tags: 2009, Finish 2009
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