2.64-Point Gap: Top One-Year CD Rate Leaves FDIC Average in Dust
The Federal Reserve's target range for interest rates remains between 3.50%-3.75%, but this hasn't affected the top one-year CD rate, which has beat the FDIC's national average by a significant margin.
According to recent data, the leading one-year CD offered an impressive 4.35% APY (annual percentage yield), which is a whopping 2.64 points above the FDIC's latest national average of 1.71%. This means that on a $10,000 deposit, savers can earn an extra $264 in annual interest.
The best one-year CD rate has reached as high as 4.50% APY across selected longer terms, but this is not reflected in the national average. The FDIC's data shows that average APYs peak at one year and then decline through four years, making it more beneficial for savers to lock into a one-year term.
Banks can take advantage of this selective pricing by paying up for targeted funding without repricing every account. Industry data supports this trend, with second-quarter net interest margin edging up to 3.32% and domestic deposits growing 0.8%. Quarterly bank profit reached $90.1 billion.