The average rate for certificates of deposit recently dropped below 1%, a move not seen since the 1950s.
According to research firm Market Rates Insight, the average rate for CDs at banks ranging from three months to five years reached 0.99% in October. The national average for all deposits, which includes CDs, money market accounts, savings and checking accounts, dipped below the 1% mark in July of this year, and is now at 0.80%.
"Many first-time records were produced by the last recession" said Dan Geller, executive vice president at MRI. "The lowest Fed Fund rate, the lowest overall deposit rates, and now the lowest average CD rates."
Geller said the current wave of rate decreases started in September of 2006, when the national average for CDs stood at 4.53% and the average for all deposit products at 3.53%. Since then, the national average CDs rate dropped 3.54% to its current level of 0.99%. The national average for all deposits dropped from its high of 3.53% in September of 2006 to its current level of 0.80%.