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It has been another depressing week for bonds. As the stock market has been rallying (although, I’m not really sure why?), Bond prices have gone down and yields risen (bond prices and yields have an inverse relationship). This happend in June as well. In June, some certificate of deposit rates increased, but that hasn’t really happened here in July.

The top online 1-year bank rates are in the 2.50% range. Good rates are in the 2.00% to 2.25% range. The curve is fairly flat on terms of 1-year to 3-year. There is usually a tiny uptick for purchasing a 2-years Certificate of Deposit. Most 2-year CD rates are about 0.25% higher than the 1-year, and the 3-year is usually another 0.25% over that, around 2.75%. Good 5-year rates are close to 3.40 to 3.60% APY.

Typing the year and rate will produce some interesting rate data. This usually brings up a list of sites with current online yields. And if, for instance, you are attempting to find the hard to find 3%, you’ll probably locate it within the top twenty or so web pages. Try a search by state, too. For example, you could type New Jersey cd rates for rates in NJ – New Jersey

Over the next few months, the stock market and bond market will probably continue this current give and take. Since the banks also know it is a back and forth, give and take, they probably won’t respond with higher online CD Rates. I think it will take the FOMC to raise Fed Funds to drastically affect CD rates. It may be 9-months before that happens. Keep in mind that short-term CD Rates will probably increase speedier than longer-term rates, eventually leaving us with a flat or nearly flat yield curve. If at some point the curve inverts again (as it did in 2006/2007), I would lengthen your terms on your certificate of deposits. An inverted curve usally means lower rates are around the corner. Yet, I think we are in for a enduring time of awful yields. The economy isn’t improving. Everytime talking heads discuss a greenshoot, news comes out that it in reality was a brownout.

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