SEATTLE — Certificate of deposit rates continued to move higher in May, with more than two-thirds of all CD rate changes reflecting increases as banks and credit unions competed for deposits, according to a new analysis from CD Valet.
In its June Ratewatcher report, CD Valet said 68% of CD rate changes recorded between May 1 and May 31 were increases, while 32% were decreases. The company said the pace of rate hikes has accelerated compared with earlier in the year.
CD Valet, a digital marketplace that connects consumers with financial institutions offering CDs, said its analysis reviewed more than 40,000 publicly listed CD rates from nearly 5,000 banks and credit unions nationwide.
‘A Notable Shift’
“There is a notable shift in CD rate trends, with APYs ticking up much more quickly than earlier this year,” Mary Grace Roske, CD Valet’s head of marketing and communications, said in the report. “This should be a wakeup call for savers to put their idle cash to work. Yields are growing particularly competitive for mid-term CDs, such as 12-, 24- and 36-month offerings.”
According to CD Valet, community and regional financial institutions offered some of the most attractive yields during the month. Institutions with between $1 billion and $10 billion in assets posted average CD annual percentage yields that were 50% higher than those offered by institutions with more than $50 billion in assets.
The report said the trend reflects growing competition among financial institutions seeking deposits and creates opportunities for consumers willing to compare rates across providers.
The findings come as banks and credit unions continue to adjust deposit pricing strategies amid ongoing competition for consumer savings and funding sources, with mid-term CD products emerging as some of the most competitive offerings in the market, according to CD Valet.
