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What's caused cd rates to drop so much in the last 20 years?

In april of 1990 the average was 8.61% and now it’s around 1.50%. What’s causing this and will they ever go back up?

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Answer #1

…sigh.

CD, in this case, means “certificate of deposit”…I removed the other answer because they didn’t read that it’s in politics.

Thing is, CD rates are determined by the prime rate, which is also tied to T-bills, economic outlook, etc, etc.

As a result, CD rates are really low, because T-bill yeilds are basically at 0.0% right now…in other words, you’re not making a single penny on what has been, traditionally, a hedge against inflation and a sure thing, long term, as the US economy grows…which means the long term outlook is pain, suffering and no economic growth.

Answer #2

Agreed with dosierosie, everyone can download songs they want for a fraction of the cost you paid for a CD. Also isn’t CD a thing of the past now, you have iPods; even mobile phones can be used as a media player now. CD players and CD disks would be obsolete soon..

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