Make 6 times more than average on 6-month CDs
There's a new leader in 6-month CDs, paying a slightly better return than you could have earned last month, according to our November survey of the best nationally available rates.
CapitalSource Bank is offering 0.90% with a modest minimum deposit of $1,000. This deal is only available online as part of the bank's promotional CD offer.
Doral Bank Direct, the leader in our October survey, continues to pay 0.87% APY. But that's only good for second place this month.
Overall you'll see that there are a dozen banks offering savers 0.65% APY or better on 6-month CDs.
While it's nice to see any increase in CD rates, we have to remember that these returns remain incredibly low and will likely remain that way for the foreseeable future.
The Federal Reserve 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 each other through the Fed.
The government-controlled bank has been keeping that rate at essentially zero since December 2008 in an effort to boost the economy, and expectations for when that policy might change continue to slip.
Economists who confidently predicted that the fed funds rate would be pushed up this year have had to push their projections back to 2014, then 2015 and now a growing number of experts don't think it will happen until sometime in 2016.
Take, for example, Aneta Markowska, the senior U.S. economist at Societe Generale, a French bank and financial services company.
In a note to investors, she analyzed the research papers Fed economists presented at an International Monetary Fund conference this month and what Janet Yellen — President Obama's nominee to be the next Fed chair — said during her Senate confirmation hearing this week.
Markowska concluded that the Fed would not allow short-term interest rates to rise until the unemployment rate reaches 6.0%, "which pushes our expected liftoff in the Fed Funds Rate to the first half of 2016."
Here are the best nationally available 6-month certificates of deposit, as of today:
Top 6-month CD Rates
|Doral Bank Direct||0.87%||$500|
|Colorado Federal Bank||0.70%||$5,000|
|GE Capital Retail||0.65%||$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 the top 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 6-month CD rates
|CapitalSource Bank||A Los Angeles-based lender to small and middle-market business which has 21 branches in central and southern California.||www.capitalsourcebank.com|
|Doral Bank Direct||The online bank of Doral Bank, the leading community bank in Puerto Rico, which also has five branches in northwest Florida and two in New York City.||www.doralbankdirect.com|
|EH National||Which has a single branch in Beverly Hills, Calif.||www.ehnbank.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|
|AloStar Bank of Commerce||An online bank based in Birmingham, Ala., formerly known as Nexity Bank.||retail.alostarbank.com|
|Ascencia||The online division of PBI Bank, which has 18 branches in Kentucky.||www.ascenciabank.com|
|Colorado Federal Savings Bank||An online bank based in Greenwood Village, Colo.||www.coloradofederalbank.com|
|Giant||The online division of Landmark Bank, which has a single branch in Ft. Lauderdale, Fla.||www.giantbank.com|
|BAC Florida||A community bank with one branch in south Florida and sells its products nationally through My e-BAnC.||www.bacflorida.com|
|Discover Bank||An online bank owned by the credit card company.||www.discover.com|
|Virtual Bank||The online division of Sabadell United Bank, which has 23 branches in Florida, and is owned by Banco Sabadell, Spain's fourth-largest bank.||www.virtualbank.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 2% or 3% on a 6-month 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 6-month CDs has fallen from 1.86% APY to a record low of 0.14% 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's policy-making committee continued to follow that policy at its late October meeting, reiterating its commitment to hold short-term interest rates near zero.
Several more years? That sounds like 2016 to us.
Contributing editor Darci Swisher contributed to this report.
Follow Mitch Strohm on Google Plus.