The Fed’s efforts to stimulate the economy provided a cash windfall to banks, which grew less interested in offering competitive yields to bring in deposits.

In the aftermath of the Great Recession, CD rates dropped to all-time lows. During the Great Recession (2007 to 2009), CD interest rates dropped from around 4% to less than 1%. By 2003, the average CD APY had dropped precipitously: The average six-month CD offered an APY under 1%. But as the dot-com boom of 2000 faded and the economy slowed, the Fed lowered interest rates to spur activity. In the early 2000s, the average CD interest rate varied between 4% and 5%. By the end of the decade, rates had reversed course, and the average one-year CD APY had increased to almost 6%. In 1993, the APY on a one-year CD was 3.10%.

CD rates in the 1990sĪs inflation cooled and the economy rebounded, interest rates declined. By the end of the decade, CD rates dropped below 8%. By the fall of 1984, six-month, one-year and five-year CDs had fallen below 10%. As the cost of goods and services increased, and the power of the dollar declined, people who saved were able to get double-digit returns on their CDs.ĭuring the summer of 1984, the average APY on a six-month CD dipped to under 11%. CD rates in the 1980sĪmid back-to-back recessions and high levels of inflation, CD rates surged to almost 20% in 1981. Read on for a decade-by-decade breakdown of how CD rates changed. In the mid-2010s, “CD yields continued to fall in the years following the Great Recession as the Federal Reserve kept benchmark interest rates near zero amid a sluggish economic recovery.” “Interest rates were significantly higher in the early 1980s as the Federal Reserve used high rates to corral double-digit inflation,” according to Greg McBride, a chartered financial analyst and chief financial analyst for Bankrate, CNET’s sister site. In the 1980s, CD rates were relatively high: The average APY for a five-year CD in July 1984 was 11.80%. The history of CD rates from the 1980s to today

Average cd interest rate