Top national 6-month CD rate holds at 4-year high

White piggy bank on gold background

The Federal Reserve's recent decision to start pushing interest rates higher will undoubtedly lead to higher returns on 6-month CDs.

But we haven't seen any improvement yet.

MySavingsDirect has paid the top nationally available yield of 1.05% APY for eight months now.

But you can earn that much or more from about a dozen leading national savings and money market accounts.

The only place to get a better return on 6-month certificates of deposit has been from credit unions and community banks.

If you live in the right place or work for an employer that qualifies you for those deals, you could earn as much as 1.74% APY.

MySavingsDirect, an online division of New York's Emigrant Bank, rose to the top of our national rankings in April, when it became the first bank to pay a 6-month yield above 1.00% in more than four years.

Since mid-2011, 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.

Even after three contenders raised their 6-month returns this fall, the runners-up sit at just 0.90% APY, keeping MySavingsDirect's lead quite comfortable.

TOP 6-MONTH CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
MySavingsDirect 1.05% $1,000
AloStar Bank of Commerce 0.90% $1,000
EverBank 0.90% $1,500
California First National Bank 0.90% $5,000
Triumph Savings Bank 0.85% $1,000
BAC Florida 0.85% $1,500
California Business Bank 0.85% $5,000
ableBanking 0.80% $1,000
First Internet Bank 0.80% $1,000
EH National 0.80% $10,000
Giant Bank 0.75% $2,500
Silvergate Bank 0.75% $25,000
GE Capital Bank 0.70% $500
Colorado Federal Savings Bank 0.70% $5,000
Ally Bank 0.67% None
Discover Bank 0.65% $2,500
Virtual Bank 0.65% $10,000
Umbrella Bank 0.61% $10,000
TAB Bank 0.60% $1,000
TIAA Direct 0.60% $1,000
State Bank of India - New York 0.60% $5,000
Synchrony Bank 0.60% $25,000

As we've pointed out, credit union and community bank CDs are the best game in town for outearning a savings account, including two deals offered to savers across the country.

In addition, we're aware of eight more local deals that pay up to 1.74% APY for those who can meet the eligibility requirements.

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

Bank States Term (in months) APY
Peoples Transport Federal Credit Union New Jersey 6 1.74%
Central State Bank Iowa 9 1.45%
Self Reliance New York Federal Credit Union New York 6 1.41%
Bridgeton Onized Federal Credit Union New Jersey 6 1.30%
Four Corners Federal Credit Union Arizona, Colorado, New Mexico, Utah 6 1.26%
Red River Credit Union Texas, Arkansas 6 1.10%
LOMTO Federal Credit Union New York 6 1.10%
TELCO Credit Union North Carolina 6 1.06%

Whether it's one of these local deals or a leading national CD, you'll definitely want to take advantage of offers like these since they pay at least six times more than the current national average of 0.16% APY, according to our weekly nationwide survey of banks and thrifts.

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 embarking on a path of holding interest rates down to allow the economy to rebuild to full capacity.

That era finally concluded last week when the Fed's rate-setting committee began what's expected to be a series of gradual rate hikes over the next three years.

The initial step was a small one — an increase of just a quarter of a point in the federal funds rate.

That's what commercial banks pay to borrow money from each other through the Fed and it's the financial lever the Fed uses to control short-term interest rates throughout the economy.

But that modest increase still reverses seven years of monetary policy that meant Americans could earn no more than a pittance on the savings they entrusted to banks.

Now we appear to have entered the next waiting game — watching for the banks to react and begin modifying their rate sheets.

So far, none of the major CD terms have experienced an increase in the lead rate, meaning the case is as good as ever for buying top-paying short-term CDs while we wait for higher yields to arrive.