Top 5-year CD rates remain stalled this summer

White piggy banks with stacks of money and moneybag

When the top national yield for 5-year CDs rose to 2.35% APY last fall, we hoped it was the beginning of a steady, post-recession climb back to normal.

But when Florida-based Citizens State Bank stopped selling its CDs nationwide in January, the leading 5-year yield dropped back to 2.25% APY and has faltered erratically ever since.

Today, the top nationally available bank return for 60-month certificates stands at just 2.31% APY, offered by both E-Loan and EverBank.

To be sure, it’s a significant improvement over the 1.75% APY low point we saw in the summer of 2013.

But for 17 months now, the leading 5-year return has been stuck in a holding pattern between 2.25% and 2.35% APY, with the only exception being a four-day special offered by Live Oak Bank for 2.50% APY.

Indeed, the past six weeks have brought us various trivial increases, amounting more to jockeying for the lead than providing any substantial improvement in 5-year yields.

TOP 5-YEAR CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
E-Loan 2.31% $10,000
EverBank 2.31% $1,500
Synchrony Bank 2.25% $25,000
Capital One 360 2.25% No minimum
Barclays 2.20% No minimum
CIT Bank 2.20% $1,000
Gulf Coast Bank & Trust 2.20% $2,000
First Internet Bank of Indiana 2.17% $1,000
State Bank of India - Chicago 2.12% $2,500
State Bank of India - New York 2.12% $5,000
American Bank 2.10% $500
Sallie Mae Bank 2.10% $2,500
American Heartland Bank & Trust 2.05% $1,000
Ally Bank 2.00% No minimum
Discover Bank 2.00% $2,500
GE Capital Bank 2.00% $500
Hudson City Savings Bank 2.00% $500
Salem Five Direct 2.00% $10,000
State Farm Bank 2.00% $500

Fortunately, there are always some lucky savers who can outearn the top national rate by purchasing CDs from a community bank or credit union.

These institutions often offer chart-topping yields to savers who live nearby or work for a particular employer.

Among the best local and regional offerings are 5-year CDs currently paying up to 3.05% APY.

TOP 5-YEAR CD RATES: Credit Union, Community Bank Deals

Bank States APY
Self Reliance New York Federal Credit Union New York 3.05%
Four Corners Federal Credit Union New Mexico, Arizona, Colorado, Utah 2.78%
Deere Employees Credit Union Illinois, Iowa 2.65%
IH Mississippi Valley Credit Union Illinois, Iowa 2.63%
Advancial Federal Credit Union Alaska, Louisiana, New Jersey, Oklahoma, Texas 2.55%
Green Mountain Credit Union Vermont 2.53%
Indiana Members Credit Union Indiana 2.53%
Institution for Savings Massachusetts 2.50%
Bank of Utica New York 2.50%
City Credit Union Texas 2.50%
Cove Federal Credit Union Kentucky 2.50%
Federal Savings Bank New Hampshire 2.50%
General Electric Credit Union Ohio, Indiana, Kentucky 2.50%
Kemba Credit Union Ohio, Indiana, Kentucky 2.50%
Ukrainian Selfreliance Federal Credit Union Pennsylvania, New Jersey 2.50%
Vibe Credit Union Michigan 2.50%

Another option beyond these local deals is brokered CDs, which also currently outpay the leading national rate. Through an account with Vanguard, Fidelity or another brokerage firm, you can now earn up to 2.35% APY with a 5-year term.

As for the rest of the nation’s banks, our weekly survey of banks and thrifts saw the average return for 5-year certificates of deposit bottoming out at 0.77% APY in the summer of 2013.

After gradually rising to 0.89% APY earlier this spring, it's foundered lately, down to 0.86% and 0.87% APY over the last eight weeks.

Back in February 2007, before irresponsible mortgage lending led the economy over a cliff, the national average return for 5-year CDs was 4.02% APY.

By most historical standards, that’s a reasonable rate for savers to expect.

But in December 2008, the Federal Reserve stepped in to avert a complete financial meltdown by artificially repressing interest rates until the economy could recover.

The Fed is expected to finally begin raising rates sometime this year, hopefully as soon as September, but possibly not until December.

When that day comes, CD rates in all terms will begin improving, and 5-year yields can certainly use the boost.