Top national 6-month CD rates hold at 3 1/2-year high

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For the past two months we’ve enjoyed MySavingsDirect’s top return among nationally available 6-month CDs.

The online division of New York’s Emigrant Bank, which offers only a simple savings account and three CDs, pays a solid 1.05% APY.

Not only is that a full two-tenths of a percentage point more than the previous leader paid, it's the first time we’ve seen a national 6-month return above 1.00% since September 2011.

Indeed, with the exception of a few short-lived spikes to 1.00%, the top national yield had languished between 0.80% and 0.93% APY for nearly three-and-a-half years.

If you live in the right place, or work for the right employer, you might even qualify to buy a 6-month CD from a community bank or credit union that's paying as much as 1.74% APY (more on that later).

Of course, savers will never be able to earn 3% or more on 6-month CDs, as we did before the 2008 financial crisis and ensuing recession, until the Federal Reserve reverses its policy of pushing interest rates to unprecedented lows.

But the exciting news is that we could see that happen before a 6-month CD bought this month matures at the end of the year, making these deals a particularly savvy place to stash short-term cash while waiting to see what the Fed will do.

TOP 6-MONTH CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
MySavingsDirect 1.05% $1,000
California First National Bank 0.90% $5,000
California Business Bank 0.85% $5,000
BAC Florida 0.80% $1,500
EH National 0.80% $10,000
Silvergate Bank 0.75% $25,000
ableBanking 0.70% $1,000
Colorado Federal Savings Bank 0.70% $5,000
First Internet Bank 0.70% $1,000
GE Capital Bank 0.70% $500
Triumph Savings Bank 0.70% $1,000
AloStar Bank of Commerce 0.65% $1,000
Discover Bank 0.65% $2,500
Giant Bank 0.65% $2,500
Virtual Bank 0.65% $10,000
Umbrella Bank 0.61% $10,000
Ally Bank 0.60% None
Synchrony Bank 0.60% $25,000
TIAA Direct 0.60% $1,000

Many times, savers in certain parts of the country or affiliated with select employers can outearn these top national rates by instead buying CDs from a community bank or credit union.

In the 6-month category, we’re aware of a handful of such deals, paying up to 1.74% APY. However, customer eligibility is fairly limited with most of these.

TOP REGIONAL 6-MONTH CDS: Credit Unions & Community Banks

Bank States APY
Peoples Transport Federal Credit Union New Jersey 1.74%
NUVO Bank & Trust Massachusetts, Connecticut 1.26%
Four Corners Federal Credit Union Arizona, Colorado, New Mexico, Utah 1.26%
Division 726 Federal Credit Union New York 1.11%
LOMTO Federal Credit Union New York 1.10%

In addition, there are two 6-month deals that select savers living throughout the country can access:

As for what the rest of the nation’s 6-month CDs are paying, the national average return is slowly creeping upwards, yet still remains an unimpressive 0.17% APY.

According to our weekly survey of banks and thrifts, 6-month CDs sunk to a record-low average of 0.14% APY in September 2013, and sat there again in June 2014.

In stark contrast is the average from February 2007, before irresponsible mortgage lending led the economy over a cliff. At that time, the national average return for 6-month CDs was 3.50% APY.

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

All of that was before the Federal Reserve stepped in to talk the markets off a ledge, though, by embarking on a path of holding interest rates down — for six years now — to allow the economy to rebuild to full capacity.

This week, the Fed’s rate-setting committee will assemble for two days to assess whether the timing is ripe yet for its first rate hike in almost ten years.

Although theoretically they could decide to raise rates at this meeting, it’s considered all but certain they won’t, with Wall Street placing odds most heavily on this fall or early winter for the first rate hike.

While we wait for that much-anticipated event, short-term CDs paying one of the country’s top rates can be a smart play for savers who want to be ready for higher rates as soon as they begin arriving.