How do today's CD rates compare to the past?

By Sabrina Karl

It’s been more than three years since the Federal Reserve began pushing up interest rates, and CD rates have inched up accordingly. But exactly how far have they climbed compared to the historical lows of a few years ago?


First, a nutshell history on rates. In December 2008, the Fed dropped the federal funds rate to zero to lift the economy out of the Great Recession, and tethered it there for seven years. As a result, savings, money market and CD interest rates plummeted through 2015.


Since then, the Fed has hiked rates eight times, significantly raising bank deposit rates. The easiest way to compare today’s rates to the past is to look at FDIC national weekly averages. But this is important: The averages across every U.S. bank are far below what you can easily find by shopping around. In fact, the top nationally available rate in any term is three to four times the national average.


That said, national averages offer a scale of comparison. For instance, the FDIC national average for 1-year certificates was 0.66 percent last week. That’s double the 0.33 percent average of a year ago, and far above the 0.19 percent low between 2013-2016.


But the 1-year average in May 2009 (when the FDIC began weekly tracking) was 1.29 percent, indicating we’ve only made up about half the ground lost since the financial crisis.


Similarly, last week’s national average for 3-year certificates was 0.99 percent, compared to 1.82 percent in 2009. And for 5-year CDs, we reached 1.27 percent last week, while the 2009 average was 2.23 percent.


The steady uptick in CD rates over the last three years has certainly been welcomed by savers everywhere, but clearly the verdict is still out on whether a return to pre-recession rates is on any foreseeable horizon.