website statistics

Historical CD Rates

Looking back on historical CD rates, common trends begin to appear. CD rates are naturally correlated very closely with interest rates. Here is a chart I found showing historical interest rate trends (click for full size):

interest rate chart Historical CD Rates

It’s important to have an idea where CD’s are headed; when you put your money into a CD, you lock in a rate of return for that period of time (anywhere from 3 months to 5 years). Withdrawing your money early from a CD almost always results in severe penalties that might even leave you with less money than you started with. As a result, it is important to compare CD rates and make sure you lock in the best rate.

Over the past year, the Federal Reserve has been steadily increasing rates by selling bonds on the open bond market. This leads to a decrease in autonomous investment as well as interest sensitive consumption, leading to an overall decrease in equilibrium income. Historically, increasing rates have had a negative effect on the stock market, and the recent bullishness of the market can be partially attributed to the Fed’s decision to stop increasing rates. This suggests that it might be a good time to lock in a decent CD rate.

Here are some sites that show historical CD rates: