Bread Financial , once home of the 5.25% yield on a 1-year certificate of deposit, has dialed back its rate. The financial institution recently dialed back its annual percentage yield for its 1-year CD to 5.
15%. Though the deal is still a compelling one for savers who want to lock up some of their idle cash and earn a solid of amount of interest in the meantime, other banks are expected to drop their yields on these products – especially ahead of Federal Reserve rate cuts. "We think banks will continue to slowly take rates down, particularly as the industry gains confidence that the Fed will cut rates this year," wrote BTIG analyst Vincent Caintic in a report earlier this week.
"Our understanding hearing from one participant is that depositors are relatively insensitive to 1yr CD rate cuts as long as they remain around the 5.00% range, but that crossing further below 5.00% results in meaningful deposit outflows," he added.
Fed funds futures trading suggests a 100% likelihood that central bank policy makers will dial back rates in September, according to the CME FedWatch tool . The upshot for savers, however, is that CDs allow them to lock in today's higher rates for a stated period. Banks can trim the yields they pay on savings accounts at any time.
See below for current APYs on select high-yielding 1-year CDs. Several institutions still offer CDs at rich yields. Popular Direct has a 1-year CD with an APY of 5.
2%, while Goldman Sachs ' Marcus and Sallie Mae still offer APY of 5.15% on their instruments. BMO Alto's 1-year CD weighs in at an APY of 5.
05%. Capital One and Citizens Access both come in at 5%..
