July's top deals pay up to 1.1% on 6-month CDs
If you can earn 1.10% APY on a 6-month CD in this rate environment, you must be living right. Or at least you're living in the right place.
Although the best nationally available rate is just under 0.9% APY (more on that later), credit unions and community banks continue to offer local customers that much for their money.
Two of the best deals in the country can be found in New York City and Corpus Christi, where credit unions are treating their members very well.
LOMTO Federal Credit Union and NavyArmy Community Credit Union are both paying 1.10% APY.
But you'll have to live in the Big Apple or south Texas to join these credit unions and qualify for these rates.
There are residency and purchase requirements at the three other banks and credit unions paying local savers 1.00% APY in Ohio, Texas and the Washington, D.C., area.
TOP 6-MONTH CD RATES: Local Deals
|LOMTO Federal Credit Union||1.10%||New York||http://www.lomto.org|
|NavyArmy Community Credit Union||1.10%||Texas||http://www.navyarmyccu.com|
|Cintel Financial Federal Credit Union||1.00%||Ohio||https://www.cintelfcu.org|
|GPO Federal Credit Union||1.00%||Washington, D.C.||http://www.gpofcu.com|
|Gulf Coast Federal Credit Union||1.00%||Texas||http://www.ccgcfcu.com|
|Doral Bank||0.90%||New York||http://www.doralbank.com|
|Industrial Credit Union||0.90%||Massachusetts||http://www.icu.org/|
Can you find a similar deal where you live? Click here to search our extensive database of the best CD rates from dozens of banks in your area.
Nothing? Then the best nationally available deals on 6-month CDs are your best bet.
Los Angeles-based CapitalSource paid savers in all 50 states 0.90% APY from late October until early April.
When CapitalSource dropped its rates, Doral Bank Direct moved to the top of our rankings with a 0.87% APY return. And yes, that's the online division of the same bank that's offering savers at its New York branches 1.00% APY.
TOP 6-MONTH CD RATES: Nationally Available Deals
|Doral Bank Direct||0.87%||$500|
|National Republic Bank of Chicago||0.80%||$1,000|
|Colorado Federal Bank||0.70%||$5,000|
To qualify for this list, a bank must be FDIC-insured and allow savers from all 50 states to buy its certificates of deposit online or through the mail.
Our CD calculator will help you figure out the interest you'll earn, for any term, amount and interest rate.
TOP 6-MONTH CD RATES: About The Banks
|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|
|National Republic Bank of Chicago||Which has two branches in Chicago.||www.nrbchicago.com|
|EH National Bank||Which has a single branch in Beverly Hills, Calif.||www.ehnbank.com|
|AloStar Bank of Commerce||An online bank based in Birmingham, Ala., formerly known as Nexity Bank.||retail.alostarbank.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|
|Colorado Federal Savings Bank||An online bank based in Greenwood Village, Colo.||www.coloradofederalbank.com|
|BAC Florida Bank||A community bank with one location in Coral Gables that 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|
|Synchrony Bank||Formerly known as GE Capital Retail Bank, this predominately online bank has a single branch in Bridgewater, N.J. The huge manufacturer General Electric plans to end its ownership of this bank through a future stock offering.||www.myoptimizerplus.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 short-term interest rates to record lows in an attempt to haul the economy out of the worst financial crisis and recession since the 1930s.
It's done that by drastically reducing what's called the federal funds rate, which is what commercial banks pay to borrow money from each other through the Fed.
That rate has been essentially zero since December 2008, so who needs to pay savers for deposits when banks can get pretty much all of the money they need from the Fed, essentially for free?
As a result, the average return on 6-month CDs has fallen from 1.86% APY in late '08 to 0.15% APY today.
Last year, former 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 in September 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.
Several more years? Economists who had expected the bank to reverse course and start raising the fed funds rate by late 2015 were suddenly wondering if sometime in 2016 might be more realistic.
After Janet Yellen took over as Fed chairman, she seemed to lay out a quicker route to higher rates at her first news conference in late March.
Yellen said the Fed must first wind down its campaign to drive long-term interest rates lower by purchasing billions of dollars a month in Treasury debt and mortgage-backed bonds.
That process began in January and, at the current rate of "tapering" as the Fed calls it, is now expected to end in October.
Once the bond purchases end, Yellen said the Open Markets Committee would turn its attention to the fed funds rate about six months later — or perhaps as soon as April 2015 if the bond purchases end in September.
Yellen and other Fed leaders quickly walked back those comments and sought to tamp down expectations that interest rates could be on the rise that quickly.
But the economy is finally experiencing the kind of robust recovery we've been waiting five long years to see and the unemployment rate has fallen to 6.1%.
Now it looks like the Fed will start a gradually return to reasonable interest rates sometime in 2015 – perhaps as early as next April and almost certainly by the fall.
Contributing editor Darci Swisher contributed to this report.
Follow Mitch Strohm on Google Plus.