Why are C/D Rates so low at banks?

http://www.bankofamerica.com/deposits/ch...


http://www.synergyonthenet.com/prodserv/...





I mean, they were up around 5% last year. Now they're below 3% (unless you're putting in more than $10,000).





What's going on?

Why are C/D Rates so low at banks?
There are plenty of banks offering higher cd rates just google it and you will find some. Try ING bank for instance. The banks that give higher rates are usually virtual banks that have no brick and mortar costs so they can offer higher rates. The reason that traditional bank cd rates are so low is because most banks are heavily invested in mortgages which have a huge number of defaults and foreclosures and the banks have been bleeding cash for months. Even though the Federal Reserve has lowered the Fed Funds Rate (the rate at which institutions borrow money) the banks have been in the red for a while and have absorbed that rate reduction to keep doors open and bolster financial health. We saw two huge rate drops and still we are not seeing much in the way of better savings, cd or mortgage rates. That is a testament to how bad it had gotten. The good news is though that we seem to be coming of the rock bottom now and thing will improve in the near future.
Reply:I know exactly what you mean. I had 2 CD's last yr, one at 5.25% and another at 4.75% and this year they matured and dropped significantly, to 2.48 and 1.51 respecively. The reason they dropped is because the FEDS keep lowering the interest rates because of our economic struggles, not until the economy picks up will our CD rates start to go up again. If you are aggressive you should look at investing in stocks, as for me, I am more conservative knowing that I wont lose any money in Cds, in stocks you can lose money but then again you can again alot more than in Cds.