A mid-month spike in benchmark Treasury yields, a heating-up housing market and generally better domestic economic news made for a mixed picture in terms of popular savings and loan products in March.
Although savers got clipped when it comes to money markets and interest checking, they were able to find a smidgen more yield in certificates of deposit. Borrowers, meanwhile, paid more for 30-year mortgages, but caught a break if they looked to take out loans on the value of their homes.
After popping above 2% mid-month, the benchmark 10-year Treasury note cooled off recently, leaving it poised to finish March close to where it started.
The crisis in Cyprus had the market scrambling for the relative safety of U.S. government debt for a while, but then the latest policy statement from the Federal Reserve made it clear that central bank remains fully committed to suppressing interest rates for a good long while.
Benchmark interest rates soared to 2.06% in mid-March from 1.85% at the end of February, but panicky demand for Treasury notes has since subsided, allowing yields to slide back down to about 1.9%
That relative volatility in the benchmark rate — along with stronger demand in housing and higher home prices — made it a mixed bag for lenders and borrowers alike.
Although they didn’t rise in March, at least some key savings rates have stabilized after trending downward throughout the summer. The national average interest rate on a money market account remained unchanged at 0.49% as of March 25, according to data from Bankrate.com (NYSE:RATE).
With the exception of a slight uptick in January, money markets have been stuck at the same level since September.
Meanwhile, yields on jumbo money market accounts slipped for the first time in five months. The national average dipped to 0.62% from 0.64%. That’s a rare change, seeing as the rate hadn’t budged since it went from 0.65% in September to 0.64% in October.
Elsewhere, short-term savings rates were down-to-unchanged, while long-term rates mostly improved. Here are the annual percentage yields on some popular savings products as of March 25, according to Bankrate:
- National Average Rate on Interest Checking Account: 0.51%, down from 0.56% a month ago
- Best Rate on Savings Account: 1% (Barclays [NYSE:BCS], no minimum), no change for four months
- Best Rate on 1-Year CD: 1.05% (Colorado Federal Savings Bank, $5,000 minimum), no change for two months
- Best Rate on 3-Year CD: 1.35% (Barclays, no minimum), up from 1.3% (Discover Bank [NYE:DFS], $2,500 minimum) a month ago
- Best Rate on 5-Year CD: 1.85% (Barclays, no minimum), up from 1.8% (Nationwide Bank, $500 minimum) a month ago
- Best Rate on 5-Year Jumbo CD: 1.8% (Nationwide Bank, $100,000 minimum), down from 1.85% (CIT Bank [NYSE:CIT], $100,000 minimum) a month ago.
At the same time — and in more evidence of an improving housing market — rates on the most common mortgage product jumped last month, while home loans got cheaper. Here are the average national rates offered on popular loan products as of March 25, according to Bankrate:
- 30-Year Fixed Mortgage: 3.73%, up from 3.64% a month ago
- 15-Year Fixed Mortgage: 2.89%, unchanged from a month ago
- 5/1 Adjustable-Rate Mortgage: 2.72%, down from 2.77% a month ago
- 30-Year Fixed Mortgage, Refi: 3.78%, up from 3.7% a month ago
- $30,000 Home Equity Line of Credit: 4.77%, down from 4.82% a month ago
- $30,000 Home Equity Loan: 6.25%, down from 6.26% a month ago