Earn up to 2.05% from our leaders in 5-year CDs
The same bank as last month has the top deal on 5-year CDs, but it's offering a lower rate, according to our November survey of the best nationally available deals.
State Bank of India New York is paying 2.05% APY — down from 2.10% in October — with a $5,000 minimum deposit.
Overall, there are 10 banks paying 1.95% APY or better on 60-month CDs.
Yet we have to remember that these rates are still exceptionally low and could stay that way for a while.
The Fed mainly influences how much we make on our savings by setting the federal funds rate, the interest rate that commercial banks pay to borrow money from the Fed.
Eric Rosengren, Boston Federal Reserve president, told CNBC television this week that the federal funds rate could be "quite low for quite some time."
How long is "quite some time"?
"You could easily imagine if we have relatively slow growth in the overall economy, even though it picks up from where we are now, that it could be 2016,” he replied. “You’d certainly need to have growth 3% or faster if you’d want to see short-term rates rising at that point.”
We might seem closer to that 3% goal than Rosengren expected after the Commerce Department reported the economy grew by an annualized rate of 2.8% in the third quarter.
But a big chunk of the growth was driven by businesses replenishing depleted inventories. Take that away and GDP was up by something like 2%.
So not that close.
Here are the best nationally available 60-month certificates of deposit, as of today:
Top 5-year CD Rates
|State Bank of India-NY||2.05%||$5,000|
|GE Capital Bank||2.01%||$500|
|National Bank of Kansas City||2%||$5,000|
|Salem Five Direct||2%||$10,000|
|GE Capital Bank||1.95%||$25,000|
To qualify for this list, a bank must allow savers from all 50 states to buy its certificates of deposit online or through the mail.
Click here to compare these returns with current CD rates from dozens of banks in your area.
Our CD calculator will help you figure out the interest you'll earn, for any term, amount and interest rate.
How to buy the top 5-year CD rates
|State Bank of India-New York||The FDIC-insured New York branch of India's largest bank, which operates independently of other U.S. branches.||www.statebank.com|
|GE Capital Bank||One of two online banks, each with its own FDIC insurance, that are subsidiaries of GE Capital Corp., the financial services unit of the manufacturing giant.||gecapitalbank.com|
|National Bank of Kansas City||A community bank owned by Ameri-National Corp., with two branches in Kansas and four in Missouri.||www.bankofkc.com|
|Barclays||The online American operation of the worldwide British bank with more than $2 trillion in assets.||www.banking.barclaysus.com|
|Salem Five Direct||The online division of Salem 5 Bank, which has 23 branches just north of Boston.||www.salemfivedirect.com|
|BBVA Compass||A major regional bank with 688 branches in the Sun Belt region.||www.bbvacompass.com|
|Nationwide||An online bank owned by Nationwide Mutual Insurance Company and its affiliates.||www.nationwide.com|
|EverBank||Primarily an online bank with 14 branches in Florida.||www.everbank.com|
|Intervest National Bank||A community bank headquartered in New York City. It has one branch there and six branches in Clearwater and Pinellas counties in Florida.||www.intervestnatbank.com|
|GE Capital Retail Bank||The other bank that's a subsidiary of GE Capital Corp.||banking.gecrb.com|
Over the past several decades, savers could usually count on earning something like 5% on a 5-year CD.
But the Federal Reserve has driven returns to record lows in an attempt to haul the economy out of the worst financial crisis and recession since the 1930s.
It did that by lowering the federal funds rate to essentially zero in December 2008 — and leaving it there.
Since then, the average return on 5-year CDs has fallen from 3.13% APY to a record-low of 0.79% APY today.
Late last year, Fed Chairman Ben Bernanke said the central bank would start bumping rates up when the unemployment rate hit 6.5%.
With that goal in mind, savers anxiously watched the jobless rate fall to 7.3% in August. Not quite there, but closing in.
Then Bernanke told a news conference after the Fed's rate-setting committee met on Sept. 18 that “the first increases in short-term rates might not occur until the unemployment rate is considerably below 6.5%."
Indeed, the Fed chairman said a return to market-driven rates — and a reasonable return on our savings — could be "several more years" down the road.
Not surprisingly, the Fed policy-making committee decided to hold out on making any type of decision at its late October meeting, reiterating its commitment to hold short-term interest rates near zero.
Contributing editor Darci Swisher contributed to this report.
Follow Mitch Strohm on Google Plus.