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In these difficult times it is harder and harder to find accounts at banks and credit unions that help you earn high interest.

The fact is with Fed Funds basically at 0% (technically it is a range from 0% to 0.25%, but we might as well round down), banks and credit unions can borrow funds pretty cheaply. It is actually amazing that high Best Jumbo CD Rates accounts can still be found in the 2.50% to 2.90% range for 1-year certificates of deposit.

The spread between Fed Funds and deposit rates is actually at near all-time highs. For instance in 2005 when Fed Funds peaked at 5.25%, 1-year CD rates ranged from 5.35% to 5.50%. That is only a difference of 0.10% to 0.25%. Now we have a spread of up to 2.90%. Unfortunately, people looking for Best Jumbo CD Rates are not doing much better than the rest of us.

The longer the Fed keeps rates down, the lower rates will go. It is expected that Fed Funds will start to rise sometime in 2010, probably sometime in the 2nd quarter. Historically, the Fed increases rates much slower than they dropped them so expect rates to remain somewhat low through 2010. By 2011 we may see 4.00% rates again.

It would seem with all of the spending our Government is doing, that rates are going to have to go up and maybe even way up. However, the last two bubbles have been created by a Fed that has unnaturally kept rates low. The first time was the extended time in 2002 and 2003 and now here we are again. I fear what bubble they will create this time.

So where can you find some higher yielding CDs? GMAC Bank is currently running a special of 2.65% APY. Alliant Credit Union has a 2.90%, but you have to join the credit union and the set-up process can be a pain. Those are for 1-year CDs. Alliant and Pentagon have a 3.50% APY for 3-years. Pentagon FCU is easier to set-up, but both have great customer service once the membership is established.

With prices falling in most areas, the above rates will allow you to keep up with inflation. However, the fear is inflation will begin moving faster and out pace the interest people are earning. When rates peaked some banks offered Prime Variable CDs. The Bank CD Rates were pegged to Prime or Prime – some %. These were a good deal until the bottom fell out on rates. As banks understood sometime in the next couple of years rates will increase, they haven’t been offering that product.

Some other Banks and credit unions with good rates have been Discover Bank, Zions Bank (through their CD auction), California Credit Union, Navy Federal Credit Union, and NASA Federal Credit Union. They tend to always have CDs in the top echelon.

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