Strong CD rates should continue to reward savers

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Certificates of deposit are continuing to earn high yields in spite of recent dips, and we expect these rather lucrative rates to stick around throughout the summer – maybe longer.

Our weekly surveys of major banks show six-month CDs have been paying an average yield of around 3.6% – the annual rate of return including interest on the interest you earn – for several months. That’s nearly four times more than six-month CDs were earning when rates bottomed out in September 2003 at an absolutely pitiful 0.91% on six-month CDs.

And remember, those are just the average rates. Our CD rate comparison charts show that some banks are paying more than 5% on shorter-term CDs.

Interest.com’s weekly survey of CD rates found the average annual yield for a:

• Five-year CD held at 4.02% -- its fourth straight week above 4%. But this yield has been trending down over the past 12 months. It is one-quarter of a percentage point lower than the 4.27% it was paying one year ago, and it's only about one-fifth-point higher than the 3.8% of August 2005.

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