The best deal on a certificate of deposit still isn't thrilling. But savers are starting to see more promotions in the 1.25 percent to 2 percent range that might be worth a second look.
And better yet, rates could continue to improve into 2018, as competition heats up between banks.
The average yield for a one-year CD across the country is 0.41 percent -- up from 0.31 percent a year ago, according to Bankrate.com.
The average yield on a five-year CD is 0.99 percent -- up from 0.82 percent a year ago.
Today's CD rates aren't anywhere close to the 5 percent savers could snag in late 2007, just as the U.S. economy tanked and took down rates with it.
As a result, retirees who typically turn to CDs to offer some security for their nest eggs won't find too much relief ahead. Even so, it is worthwhile to note that savers who shop around for rates are being rewarded as more banks roll out limited offers.
Some deals require a sizable amount of savings, such as a deposit of $25,000 or more at Troy, Mich.-based Crestmark Bank for a 1.8 percent yield on a one-year CD.
But plenty of other offers only require minimum deposits that range from $500 to $5,000.
"You often can get the top rate or close to the top rate with a deposit as low as $500, and in some cases, the minimum deposit can even be lower," said Ken Tumin, founder and editor of DepositAccounts.com.
Typically, much lower CD rates will be offered at some large banks if there are no special deals. Tumin said the average CD rates at large bank are 30 to 40 percent lower than what's often offered at small and medium-size banks
Chase's website, for example, last week indicated that a 12-month CD has a yield of 0.02 percent for deposits less than $100,000.
Bank of America's web site stated that a 12-month CD with a minimum opening balance of $10,000 would have a yield of 0.07 percent.
Consumers should look at Internet-only banks, community banks and credit unions, which can have CD rates that are well above the averages, experts said.
The Capital One 360 one-year online CD has an APY of 1.65 percent. Capital One 360 has a five-year online CD with a yield of 2.45 percent.
Ally Bank has a no-penalty 11-month CD that has a yield of 1.5 percent with deposits of $25,000 or higher. The yield is 1 percent on that 11-month CD for deposits of less than $5,000. No penalties are charged for withdrawing the money before the CD matures after the first six days of putting money into the CD.
While CD rates are likely to gradually increase, many market watchers do not expect a dramatic increase in the next year or so.
"Banks that are currently paying a lackluster 0.1 percent on savings or 0.25 percent on CDs aren't suddenly going to hike rates enough to be competitive with the top payers," said Greg McBride, chief financial analyst for Bankrate.com.
"If you can live without the money for at least a year, the one-year CD is worth a look," McBride said.
The top promotional rates around 1.8 percent are solid and will give savers the chance to reinvest again 12 months from now in what is likely to be a higher rate environment, McBride said.
"What little additional yield is available in longer maturities isn't worth the trouble of the longer time commitment," McBride said.
He forecasts better rates on short-term CDs in 2018.
About The Writer
Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at email@example.com.
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