Interest Rate Forecast

If you're an investor in certificates of deposit who is frustrated by low yields, prepare for more of the same in 2013.

CD yields will continue to fall this year as they did in 2012, says Dan Geller, executive vice president for Market Rates Insight, a banking industry research firm based in San Anselmo, Calif.

"I see them continuing to decline, however, at a slower pace," Geller says. "When they reach such a low level as they are now, relatively every decrease is a much greater portion of what's left, so the pace will slow down. But I do see a gradual decrease."

So why are CD rates still getting pounded? It all comes down to demand for business and consumer loans, Geller says. Banks make their money on the spread between the interest rate they charge customers and businesses to borrow money and the interest rate they pay account holders for deposits, known as the net interest margin.

Rate Movement in 2012

The one-year CD rate averaged 0.32% in 2012. As low as that seems by historical standards, it might look pretty generous to many CD investors by the end of 2013.

What's a Consumer to do?

While average rates will stay at historic lows, it's still possible to find meaningful CD yields by shopping around.

Some banks, particularly those that do a lot of auto lending, can afford to pay higher yields because they're able to turn around and lend those CD funds to borrowers, Geller says.

"Would shopping around be the right way to go? Yes, absolutely, because there are opportunities to get higher returns," he says.

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