It was better to be a saver than a borrower in December.
Interest rates rose steadily for the second straight month, as bonds sold off amid new record highs for stocks.
The good news is that yields on many savings products increased for the first time in a long time. The bad news is that most popular loan products — like 30-year fixed mortgages — went up by an even greater amount.
The yield on the benchmark 10-year Treasury note started December at 2.7% and climbed throughout the month. That has interest rates sitting at 2.98%, with a very good chance of breaking the 3% level by year-end. The rally in rates has been unbroken since late October, when the yield on the 10-year note stood at 2.49%
For the first time in what seems like ages, rising rates finally trickled down to popular savings products. For example, yields on savings and money market accounts posted gains for the first time in six months.
Rates Rise Across the Board
The national average interest rate on a money market account rose to 0.45% as of Dec. 26 from 0.4% a month ago, according to data from Bankrate.com (RATE).
Elsewhere, yields on savings products also moved higher after doing nothing a month ago. Here are the annual percentage yields on some popular savings products (with a minimum deposit of less than $10,000, except for jumbo CDs) as of Dec. 26, according to Bankrate:
- National Average Rate on Interest Checking Account: 0.49%, up from 0.48% a month ago
- Best Rate on No-Fee Savings Account: 1% (First Trade Union Bank), up from 0.9% a month ago
- Best Rate on 1-Year CD: 1.1% (AloStar Bank of Commerce), up from 1.05% a month ago
- Best Rate on 3-Year CD: 1.45% (Intervest National Bank [IBCA], $2,500 minimum), no change for three months
- Best Rate on 5-Year CD: 2.16% (EverBank [EVER]), up from 2% a month ago
- Best Rate on 5-Year Jumbo CD: 2.16% (EverBank), up from 2.05% a month ago
Unfortunately for borrowers, rates on the most common mortgage products also rose significantly over last month. Here are the overnight national average rates offered on popular loan products as of Dec. 26, according to Bankrate:
- 30-Year Fixed Mortgage: 4.51%, up from 4.34% a month ago
- 15-Year Fixed Mortgage: 3.56%, up from 3.39% a month ago
- 5/1 Adjustable-Rate Mortgage: 3.69%, up from 3.5% a month ago
- 30-Year Fixed Mortgage, Refi: 4.33%, up from 4.13% a month ago
- $30,000 Home Equity Line of Credit: 4.84%, up from 4.68% a month ago
- $30,000 Home Equity Loan: 6.1%, up from 6.09% a month ago