Another one for watching CD rates would fit right in.
Over the last 12 months, average returns on certificates of deposit have remained essentially unchanged, barely budging from their record lows.
The good news is that the long-term steadiness indicates rates have hit bottom, said
Yields on one-year CDs averaged 0.23 percent nationwide last week, Bankrate.com said. That compares with 0.23 percent in January and a nearly identical 0.24 percent one year ago.
Meanwhile, yields on five-year certificates were averaging 0.79 percent last week vs. 0.79 percent in January and 0.78 a year ago.
By comparison, savers were earning an average of 3.77 percent on one-year certificates and 4.02 percent on five-year CDs in
CD rates have been stagnant locally, too.
The top 10 banks in the
The outlook for deposit rates the rest of the year is for more of the same,
With the Federal Reserve pledging to hold the federal funds rate at record lows into the middle of 2015, it will be some time before savers see any meaningful upturn,
Yields on longer maturities, such as five-year CDs, could inch up later this year if the economy continues to improve. But the gains would be "nothing to write home about," he said.
Meager returns on bank deposits underscore the need to have a diversified savings portfolio beyond federally insured cash investments, including dividend-paying stocks, bonds (including municipal, inflation-indexed and floating-rate bonds) and real estate investment trusts,
No matter where interest rates stand, the best way to maximize CD yields is to shop around, he said.
Nationwide, the top-yielding one-year CDs at federally insured institutions were paying 1.1 percent last week vs. the national average of 0.23 percent.
"It won't blow anyone's hair back, but it's a nearly fivefold increase from what you would get if you settled for average,"
The highest-paying six-month certificates currently top out at about 1 percent, a nearly sevenfold increase compared with the national average of 0.15 percent.
Besides comparing rates on standard CDs, savers should ask about special deals. Banks periodically offer higher promotional rates when they want to attract deposits.
Locally, for example,
Many banks also offer other ways to earn higher returns, such as bonus rates for customers who maintain a checking account with the institution or have large balances.
At PNC, for example, customers with at least
Don't overlook savings and money market accounts, which can pay the same or more than a CD and provide the added benefit of extra liquidity.
"I don't see any appeal in longer maturities right now," he said. "You are marrying yourself to a return that will not keep pace with inflation."
To help locate the best yields nationally, visit www.bankrate.com and www.bauerfinancial.com.
(c)2014 the Pittsburgh Post-Gazette
Visit the Pittsburgh Post-Gazette at www.post-gazette.com
Distributed by MCT Information Services