April wasn’t exactly the cruelest month for savers and lenders, but a sharp drop in interest rates didn’t do them any favors. On the other side of the rate equation, it was a much better month to be a borrower.
Tepid economic growth and muted inflation helped the benchmark 10-year Treasury note rebound from a three-month downtrend. Indeed, falling bond prices had pushed the yield on the benchmark note up to a peak of 2.06% in the first half of March.
Since then, however, bond prices have gone up, meaning yields have come down — and rather sharply at that. The 10-year Treasury fell below 1.7% in the closing days of April.
The net result was that interest rates tipped in favor of consumers. True, yields on savings products inched down or were unchanged in April, but then many of the most popular loan products got significantly cheaper vs. a month ago.
Money markets, a popular place for investors to stash cash, have remained stable for months. The national average interest rate on a money market account remained unchanged at 0.49% as of April 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 second straight month after five months of no change. The national average dipped to 0.61% from 0.62% in March — a rare move, since jumbo money markets yielded an average of 0.64% from October through February.
Elsewhere, short-term savings rates were unchanged, but longer-term rates fell. Here are the annual percentage yields on some popular savings products as of April 25, according to Bankrate:
- National Average Rate on Interest Checking Account: 0.51%, no change
- Best Rate on Savings Account: 1% (CIT [NYSE:CIT] Bank, $25,000 minimum), no change for five months
- Best Rate on 1-Year CD: 1.05% (GE [NYSE:GE] Capital Retail Bank, $25,000 minimum), no change for three months
- Best Rate on 3-Year CD: 1.31% (Virtual Bank, $10,000 minimum), down from 1.35% a month ago
- Best Rate on 5-Year CD: 1.7% (Nationwide Bank, $500 minimum), down from 1.85% a month ago
- Best Rate on 5-Year Jumbo CD: 1.75% (Nationwide Bank, $100,000 minimum), down from 1.8% a month ago.
At the same time, rates on the most common mortgage products tumbled last month, and home loans got cheaper too. Here are the average national rates offered on popular loan products as of April 25, according to Bankrate:
- 30-Year Fixed Mortgage: 3.47%, down from 3.73%
- 15-Year Fixed Mortgage: 2.71%, down from 2.89% a month ago
- 5/1 Adjustable-Rate Mortgage: 2.61%, down from 2.72% a month ago
- 30-Year Fixed Mortgage, Refi: 3.46%, down from 3.78% 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