Average CD Interest Rates First Week of 2011

As we head into 2011, rates on certificates of deposit are still pathetic but there is hope for the future direction of rates. Rates on bond yields have increased 100 basis points which has sent mortgage rates higher by almost the same amount.

On October 8, 2010, bond yields were 2.38 percent.Yesterday 10 year yields closed at 3.48 percent. Yields were up almost 10 basis points in one day on news that hiring is picking up. A survey from payroll processor ADP found that private companies added 297,000 jobs last month, almost triple the number that economists were expecting.

CD rates probably won't move higher for at least 5 more years. Inflation is low, the jobless rate is still high and job growth is still sluggish. Until the economy picks up steam we don't expect the Federal Reserve to increase the federal funds rate. As a result, CD rates at banks and credit unions will remain low.

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