BestCashCow Blog

Short term Treasuries Yields Drop Dramatically As Investors Rush to Safety

Short term treasuries yields has their single biggest 1-day move in 19 years on August 20 with 3 month Treasuries falling under 3%.  The yield curve has now steepened dramatically.  While savings accounts and short term CDs are still offered well above 5%, cash and cash equivalent securities may soon become less attractive.

Fed Cuts Discount Rate by 50 Bps

The Fed cut the discount rate by 50 basis points after markets reeled yesterday and treasury yields fell dramatically.  In spite of the fall in treasuries, Countrywide increased its offering on 3-month, 6-month and 1-year CDs above those offered by its competitors.  E-Loan now has the most compelling 2-year and 3-year CD rates.  Countrywide rates are now just below the Fed discount rate.

Indymac Rates up on CDs and Money Markets

It looks like Indymac just raised the rates on its CD and Money Market accounts.  BankMan on the main BestCashCow site reported that Indymac is offering a 5.55% APY on a 1 year and 5 month CD with a $5,000 minimum balance.  According to our rates charts, these are top rates (BestCashCow does not cover 5 month CDs).  In addition, they have a competitive money market rate of 5.75% APY on balances of $25,000 or more.

As Rates Fall, So too do CD rates

CD rates came down dramatically over the weekend following Thursday and Friday's sharp fall in short term Treasury yields.  Some of the banks that have been quickest to drop their CD offers and savings rates have been very closely tied to the mortgage lending risks - including Countrywide, GMAC and IndyMac.  As always, please visit BestCashCow.com to see the best current offerings.