MERCER ISLAND, Wash.–In anticipation of a cut in rates by the Federal Reserve, approximately 74% of CD rate changes made from Aug. 01-Aug. 31 were decreases, according to analysis released by CD Valet.
CD Valet, which is a digital marketplace that connects consumers with the best CD rates and terms nationwide, further reported the share of rate increases during the same period was 26%, continuing a downward trend of CD rate hikes in recent months; 36% of rate movements in July and 42% in June were increases.
35,000 Rates Reviewed
In its monthly Ratewatcher report, CD Valet said it analyzes its digital marketplace of over 35,000 retail CD rates, representing over 4,500 banks and credit unions, to uncover patterns and trends.
According to the company, there were 1,361 CD rate APY decreases in August, averaging 21 basis points, and 468 rate APY increases reported during the month, averaging 36 basis points. Of these increases, approximately 57% impacted CDs with terms greater than one year.
Additional Findings
Other points of note from the August analysis include, according to CD Valet:
- Of CD rates that did increase, the most common term was the 12-month CD, which comprised of 26% of all total rate increases.
- The 12-month CD also saw the highest average increase at 56 basis points, up from 40 basis points in July.
- The yield curve remains inverted, also signaling the expectation for rates to decrease this fall.
- Of the institutions that increased CD rates, approximately 66% were credit unions while approximately 34% were banks, in line with trends from recent months.
The average credit union CD rate APY was approximately 17% higher than average bank CD rate APY, it said.
‘Risk Missing Out’
“As anticipation for a potential upcoming rate cut intensifies, many savvy savers are deciding to lock in CDs now to secure attractive rates,” Mary Grace Roske, head of marketing & communications at CD Valet, said in a statement. “The financial institutions that aren’t optimizing their CD strategy – including thoughtful pricing and visibility – risk missing out on attracting deposits and building customer relationships. The banks and credit unions that want to stand out are doing their research to understand both saver appetite and how peers are pricing and promoting their deposit products.”
