SEATTLE — More banks and credit unions raised certificate of deposit yields than lowered them over the last month for the first time in months, according to a new analysis from CD Valet.
The company said in its May CD Ratewatcher report that 54% of CD rate changes between April 3 and May 3 were increases, while 46% were decreases. According to CD Valet, 1,128 institutions increased CD rates during the period, compared with 969 that lowered yields.
CD Valet, a digital marketplace that tracks CD rates nationwide, said its monthly analysis reviews more than 40,000 publicly listed CD rates from nearly 5,000 banks and credit unions.
“The Federal Open Market Committee once again held rates steady, however the committee was unusually divided, which is likely due to economic signals that continue to conflict,” Mary Grace Roske, head of marketing and communications at CD Valet, said in the report.
‘Persisting Uncertainty’
Roske said persistent inflation and uncertainty surrounding future Federal Reserve rate cuts are prompting financial institutions to maintain or slightly increase CD yields, particularly for shorter-term products.
“As inflation remains high and there is persisting uncertainty around future Fed cuts, we’re seeing banks and credit unions maintaining their CD yields or even edging them higher, especially for short-term CDs such as 12-month offerings,” Roske said.
According to the report, 12-month CDs accounted for more than 20% of all CD rate hikes during the month, continuing a recent trend of stronger competition in shorter-term deposit products. Mid-term CDs, including 24- and 36-month terms, also experienced a notable number of increases.
CD Valet said the average increase among institutions raising rates was 28 basis points.
