Here come the 5% CDs

[mahatmakanejeeves]

I was in a bricks and mortar branch of a bank last week to cash a check. There were flyers on a desk saying that the bank would be paying 2.96% or on CDs, depending on the amount and the time period. I hadn't seen such a flyer in quite some time.

Brett Arends's ROI

Here come the 5% CDs

Last Updated: Feb. 18, 2023 at 10:52 a.m. ET
First Published: Feb. 14, 2023 at 1:58 p.m. ET
By Brett Arends

Don’t touch that dial. If you’re looking for certificates of deposit, the interest rates on offer should be—here’s hoping—heading higher following the latest inflation numbers out Tuesday morning. ... You can already get 5% on a one-year CD if you shop around, and there should be more—and maybe better—on offer soon following the latest economic news, which has sent the money markets jumping around.

January’s inflation data came in higher than expected, and the markets were surprised by the news, even though Federal Reserve Chairman Jay Powell had basically told them this was going to happen at his press conference a couple of weeks ago. ... In response, the money markets now see the Fed hiking short term rates by a further 0.75% percentage points by the fall, and maybe by as much as a full point. That’s according to the market data tracked by the CME. ... That could take short term rates, currently 4.6%, over 5.5%.

Meanwhile, according to Bankrate.com, the national average at the moment for a one-year certificate of deposit is just 1.44%. ... No, really.

In America, it seems, it’s illegal for you to rob a bank, but not the other way around. ... As a result you need to shop around to get the best deals.

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