High Yield CD Watch: Where's the Beef?

Shopping around for decent CD rates?  Join the club, the pickings are slim, snap into a Slim Jim you say?  No, let's just stick to high yield cds, or what passes for that these days which is just about as impressive as Randy Savage pitching dried fatty beef sticks.

The first cd offer that caught our attention is from AIG Bank - Click to View. The best they can do is a 6 month cd rate at 1.5% APY. Its not great and if anything the only quality that makes this a noteable offer is that your money will only be locked away for 6 months.

With so many financial institutions vying for the patronage of consumers – online, local, and big banks, plus the credit unions — one easy way of getting depositors to switch banks is to offer attractive CD rates. Banks are willing to gamble on spending more on higher rates in hopes that customers will also transfer their other low-interest deposits such as savings and checking accounts. FYI America, feel at ease with your Certificates of Deposits since they are now FDIC insured to at least $250,000, not just up to $100K.

A better deal if you have the cash to spare would be to put your money with MetLife at the 3 Month high yield cd rates, depending on your cash position, here's how those cd rates work out:

To review MetLife's Offer - Click Here

WHY ARE RATES SO LOW?
CD rates are also dependent on the current economic environment. Deposits generated from the clients are typically used by banks to invest in higher-yielding investments or lent out to borrowers at a higher rate, thereby earning for themselves a neat little profit. However, banks can also borrow money from the government through the Federal Reserve for these same purposes, and when the federal funds rate offered by the Fed is low, banks will opt for a cheaper source of funds than pay a premium on customers’ deposits.

This scenario is clearly manifested during this economic recession where the Fed’s rates have dropped to less than 1% in an effort to get banks lending again, thereby thawing the frozen credit markets. As a result, CD rates have also dropped to rock-bottom levels in the past few months.

Some of these offers may be expiried, as usual, check out our sponsors for the latest and greatest offers:

Don't forget, the Masters cover the best cd rates and offerings each week - click to access our CD articles.

Junk CD rates have the got the Masters asking...

SOURCE: http://wallstnation.com/high_yield_cd_rates_08062009