Bank CD rates are finally rising

LOS ANGELES, Aug. 23 (UPI) -- Certificate of deposit rates are going up at most U.S. banks after more than a year of decline, a survey of major banks indicates.

Some banks are now offering more than 4 percent on a one-year CD, reversing a trend that saw average annual yields fall to 1.92 percent from 3.75 percent in August, 2007. The nationwide credit crunch, last month's failure of IndyMac Bank and Bank of America's aggressive marketing are causing the rise, the Los Angeles Times reported Saturday.

Countrywide, now a mortgage lending division of Bank of America Corp., is pushing a seven-month CD that pays a 4.10 percent annual rate. Online lender E-Loan is marketing 4.17 percent interest for one-year deposits while First Federal Bank offers a nine-month CD at 4.23 percent.

"For banks that want to get their hands on cash, it's a lot easier to pay up on consumer deposits than to tap the credit markets," Greg McBride at Bankrate.com said.