Top national 6-month CD rates pay 0.95%
For most of the past 18 months, the top nationally available 6-month CD rate held steady at 1.05%, offered almost unwaveringly by one leading bank.
But September changed that, and not for the better.
For the first time since April 2015, the most you can earn from a 6-month certificate is below 1%.
So what's a saver looking for worthwhile short-term yields to do?
One option is to sink your funds into a nation-leading savings or money market account instead, since a dozen options pay more than the best 6-month bank CD.
But if you'd rather lock in your investment and your rate for a guaranteed six months, your best bet is to shop the local or regional deals that beat the national banks, some paying as much as 2.00% APY.
What about the future? Can we expect another bump from the Fed anytime soon?
Our crystal ball is as nonexistent as everybody else's, but we'll tell you what to watch.
The top national deals
The previous 1.05% APY leader among nationally available 6-month CD rates was MySavingsDirect, an online portal of New York's Emigrant Bank.
When it rose to the top of our rankings in April 2015, it became the first bank to pay a 6-month yield above 1.00% in more than four years.
Indeed, from 2011 to early 2015, the top national yield had languished between 0.80% and 0.93% APY (if you don't count a few spikes to 1.00% APY that lasted a day, a week, or one time up to a month).
But in early September, MySavingsDirect abandoned the lead when it lowered its 6-month return to 0.85% APY.
Inheriting the top spot is TAB Bank, which is paying 0.95% APY on 6 months.
Formerly Transportation Alliance Bank, TAB was established to provide financial services to the transportation industry. It now offers an array of online business and personal banking services and is based in Ogden, Utah.
TOP 6-MONTH CD RATES: Nationally Available Bank Deals
|Live Oak Bank||0.90%||$2,500|
|Colorado Federal Savings Bank||0.90%||$5,000|
|First Internet Bank||0.86%||$1,000|
|EH National Bank||0.86%||$10,000|
|Triumph Savings Bank||0.85%||$1,000|
|Federal Savings Bank||0.80%||$10,000|
Earning more locally
As we've pointed out, credit union and community bank CDs are usually the best game in town for those who live in the right place or work for a certain employer.
In fact, we can tell you about more than a dozen offers that outpay TAB's 0.95% APY on CD terms of 3 to 9 months.
The best of these is paying 2.00% APY for qualified savers willing to stretch to 9 months. For a strict 6-month term, 1.74% is the leading offer.
TOP REGIONAL 6-MONTH CDS: Credit Unions & Community Banks
|Bank||States||Term (in months)||APY|
|Village Credit Union||Iowa||9||2.00%|
|Peoples Transport Federal Credit Union||New Jersey||6||1.74%|
|Self Reliance New York Federal Credit Union||New York||6||1.41%|
|Bankers Trust Company||Arizona, Iowa||7||1.30%|
|Down East Credit Union||Maine||5||1.00%|
|State Employees’ Credit Union||North Carolina||6||1.00%|
|American Investors Bank & Mortgage||Minnesota||6||1.00%|
|Riverdale Credit Union||Alabama||6||1.00%|
|Sun Community Federal Credit Union||California||6||1.00%|
|Triangle Credit Union||New Hampshire, Massachusetts||6||1.00%|
|Sharonview Federal Credit Union||North Carolina, South Carolina||7||1.00%|
|HarborOne Bank||Massachusetts, Connecticut, Maine, New Hampshire, Rhode Island, Vermont||7||1.00%|
Whether it's a local deal or a leading national CD, you'll definitely want to take advantage of offers like these since they almost all pay at least five times more than the current national average of 0.19% APY, according to our weekly nationwide survey of banks and thrifts.
Waiting for a Fed impact
The national average for 6-month CDs sank to a record low of 0.14% APY in September 2013 and remained there as recently as June 2014.
Back in February 2007, before irresponsible mortgage lending led the economy over a cliff, the average return for 6-month CDs was 3.50% APY.
But then the Federal Reserve stepped in to talk the markets off a ledge by holding interest rates down to allow the economy to rebuild to full capacity, and keeping them there for seven years.
That era finally concluded in December when the Fed's rate-setting committee began what was expected to be a series of gradual rate hikes over the next several years.
But while we had hoped this would compel banks to raise their own rate sheets, the Fed's small increase simply hasn't been enough to move most banks.
Add to that the global and market uncertainty we've seen this year, and the Fed's previously anticipated strategy of continuously raising rates has been downgraded to a wait-and-see approach, with no hikes announced at the six meetings since December.
The Fed's next rate-setting meeting will be held November 1-2. However, a majority on Wall Street predict we'll be left waiting until December, or even 2017, for the next hike.
In any case, relief for long-suffering CD savers can't come soon enough.
The rates above were gathered on October 3, 2016. Before applying, check with the bank or credit union of interest to confirm the offer still stands.