Fact Check: Are cd rates going up?

Are CD Rates Going Up?

The claim in question is whether Certificate of Deposit (CD) rates are currently increasing. This topic is particularly relevant as many consumers seek to maximize their savings amid fluctuating interest rates influenced by broader economic conditions.

What We Know

1. Current Rates: As of late October 2023, reports indicate that CD rates are indeed higher than those recorded in September 2023. For example, some institutions are offering rates as high as 6.00% for various terms, with most terms providing at least 5.00% APY 23.

2. Rate Trends: According to Investopedia, CD rates have risen in several terms during the week of October 24, 2023, suggesting a general upward trend 4. This aligns with the broader context of the Federal Reserve's interest rate adjustments, which have influenced savings rates across the board.

3. Historical Context: Historical data shows that CD rates have fluctuated significantly over the years. For instance, the average APY for a one-year CD was reported to have increased from 1.78% in September 2023, following a series of interest rate hikes by the Federal Reserve 10.

4. Future Projections: Some forecasts suggest that while CD rates may continue to rise in the short term, there is speculation about potential decreases in 2025 as economic conditions evolve 5.

Analysis

Source Evaluation

• Investopedia: This source is generally considered reliable for financial information, providing detailed analysis and comparisons of CD rates. However, it is important to note that while Investopedia aims for objectivity, it may have a slight bias towards promoting financial products due to its commercial nature 24.

• SuperMoney: This site offers a comprehensive overview of current CD rates and includes features like step-up CDs, which allow for rate increases during the term. The information appears accurate and well-presented, but it is essential to consider that SuperMoney may have a vested interest in promoting higher-yielding products 1.

• NerdWallet: Known for its financial advice and product comparisons, NerdWallet provides a forecast for CD rates. However, its projections are speculative and based on current trends, which can change rapidly 5.

• Yahoo Finance: This source provides up-to-date information on CD rates and is generally reliable. However, it is crucial to assess the context of the information presented, as it may not always include comprehensive analysis 68.

• Bankrate: This site offers historical data on CD rates, which is useful for understanding long-term trends. However, historical data alone may not accurately predict future movements 9.

Methodology and Evidence

The claims regarding rising CD rates are supported by multiple sources, indicating a consensus on the current trend. However, the methodologies used to assess these rates vary. Some sources rely on aggregated data from a range of financial institutions, while others may focus on specific banks or credit unions. This variability can affect the reliability of the reported rates.

Moreover, the influence of the Federal Reserve's monetary policy on CD rates is a critical factor. The Fed's decisions regarding interest rates directly impact the rates banks offer to consumers. Thus, understanding the timing and implications of these decisions is essential for interpreting current trends in CD rates.

Conclusion

Verdict: True

The evidence indicates that CD rates are indeed increasing as of late October 2023. Reports from multiple reliable sources confirm that rates have risen compared to September 2023, with some institutions offering rates as high as 6.00% APY. This trend aligns with the broader economic context influenced by the Federal Reserve's interest rate policies.

However, it is important to note that while the current trend shows an increase, future projections suggest potential fluctuations, with some forecasts indicating possible decreases in 2025. The methodologies used to assess CD rates vary among sources, which introduces some uncertainty regarding the exact figures and trends.

Readers should remain aware of these nuances and critically evaluate the information presented, as financial conditions can change rapidly and may affect the accuracy of future predictions.

Sources

1. Current CD Rates (Week of October 30th, 2023) - SuperMoney. Available at: SuperMoney
2. October CD Rates Even Higher Than September in Most Terms - Investopedia. Available at: Investopedia
3. Top CD Rates Oct. 27, 2023 - Investopedia. Available at: Investopedia
4. CD Rate Trends, Week of October 24: Rates rise in several terms - Investopedia. Available at: Investopedia
5. CD Rate Forecast: Are CD Rates Going Up in 2025? - NerdWallet. Available at: NerdWallet
6. Top CD rates today: Oct. 23, 2023 - Yahoo Finance. Available at: Yahoo Finance
7. Top CD Rates Oct. 6, 2023 - Investopedia. Available at: Investopedia
8. Top CD rates today: Oct. 20, 2023 - Yahoo Finance. Available at: Yahoo Finance
9. Historical CD Interest Rates 1984-2025 - Bankrate. Available at: Bankrate
10. Will CD interest rates rise again in 2025? Experts weigh in - CBS News. Available at: CBS News