Interest rates at R.I. banks dropped 25% from ’11, study says
EVEN AS INTEREST rates offered by Rhode Island banks and credit unions fell 25 percent between 2011 and 2013, the Ocean State's financial institutions still had some of the highest interest rates in the U.S. for savings accounts and CDs.
LOS ANGELES – Interest rates offered by Rhode Island’s banks and credit unions for certificate of deposit and savings accounts fell an average 25 percent between 2011 and 2013, according to a study released Wednesday by GoBankingRates.com.
The personal finance website compared Rhode Island’s average rates on savings accounts, 6-month CDs, 1-year CDs and 2-year CDS in 2013 versus averages from 2011.
According to GoBankingRates.com, the average deposit interest rates for Rhode Island’s 6-month CDs fell to a 0.43 percent annual percentage yield from 0.71 percent APY. The 1-year CDs fell to 0.61 percent APY from 0.88 percent APY. The state’s 2-year CDs showed the largest decline, to 0.98 percent APY from 1.31 percent APY. The average interest rate of savings accounts fell the least, losing 0.01 percentage points between 2011 and 2013.
“CD rates are set not based on today’s economic situation, but the future. It makes sense, then, that longer-term deposit account rates such as 2-year CD rates would experience the largest drop during the aftermath of a recession,” Casey Bond, GoBankingRates managing editor, said in prepared remarks.
Even as Rhode Island’s interest rates fell, the Ocean State’s banks surpassed those in the rest of the United States. Compared to the rest of the states in the U.S., Rhode Island ranked first for the highest interest rates in all but 6-month CDs, where it ranked second.
GoBankingRates compiled its report using its database of interest rates from more than 4,000 U.S. banks and credit unions. Current rates are as of Jan. 31, 2013, and 2011 rates were based on Feb. 28, 2011, data. Only local financial institutions were used in the study. National and online banks were not considered.