In a Sept. 11 post, I noted the screwed up state of interest rates on super-safe investments. My evidence was an offering from the Pentagon Federal Credit Union of a 1-year insured CD, paying 1.06% with just a $1,000 minimum investment.
Pretty good, but the problem was that PenFed’s 2- and 3-year CD rates dropped to 1.05% and the 5- and 7-year CDs were paying a measly 1.21%.
Ridiculous, I noted. But now PenFed has attempted to repair that problem by upping its rates to more attractive levels, at least for 5- and 7-year CDs. These new rates are logical and competitive nationally.
According to BankRate.com, the national average for a 5-year CD is 1.87%, but you can find higher, such as:
- 2.30% at Synchrony Bank
- 2.53% at Chartway Federal Credit Union
- 2.25% at Barclays
- 2.25% at GE Capital Bank
My hometown credit union, Truliant, is paying just 1.40% for a 5-year CD with a minimal deposit. It shows how important it is to shop around when you have a CD maturing.
Treasury Inflation-Protected Securities 
And when you are shopping around for those CD rates be sure to check Bankrate’s rating of the issuer. Sure it’s insured, but that doesn’t mean you’ll get your money immediately if the bank goes belly up. Of course you need to observe coverage limits as well.
mlonier, I will be writing about this soon. The September inflation number comes out Wednesday and that will set the adjusted rate for November to March. There will be the period from Oct. 22 to Oct. 31 that you can choose to buy immediately or wait until Nov. 1, because you will know the new inflation-adjusted rate. But the fixed rate could drop from 0.1% to 0.0%, given how low interest rates have dropped this month. It could stay the same but I don’t think it will go up.
What’s your take as the end of month i-Bond adjustment nears?