You can expect that longer term should pay a better APY as short-term CDs. Sometimes, this is not the case. In this case, the banks are tell you something.
It seems appropriate that CD rates with in the long term should be better. Make a stronger commitment, right you? In most cases, you will see higher CD rates in the longer term problems (all other things equal). Short term CD rates are higher than savings account rates, because they are less liquid, and long term CDs still less liquid. If interest rates unchanged, you would know that better you to get CD-rate on a longer commitment.
What happens if interest rates are expected to be changed? Perhaps the banks feel that interest rates in General (in the market, and by the fed, for example) are a little high. If this is the case, the banks have to believe that prices in General (and CD rates in particular) will be lower in future. How they indicate this? By the fact that in the long term CD rates relatively low.
View an example. You might have a 6-month CD with a decent price. In General, you would expect that the 12-month CD rate due to the larger time - may be higher, 0.3% higher being further. What's with the 18-month CD rate? This may be 6 months perhaps 0.7% higher than the CD. So far so good.
In cases where banks think that prices could fall, they keep the CD rates relatively flat. In the above example must you pay only 0.1% more than 6 months-CD for the 12-month CD. The 18 month CD (and the 2, 3 and 5-year prices for that matter) could be the same as the 12-month CD rate - or lower!
What should you do? You can buy the shorter term CD because you get the same price without locking up your money. However, prices could fall. If this happens, you are forced to buy, if your short-term CD matures - it better, would be locking in the longer term CD in lower CD prices.
Of course, if you knew what wanted to do CD rates psychics would be you. The best thing to do is to use your best judgment. Depending on how much time and energy that you want to display, you can choose according to your requirements. You know, how long you bind your Money CD rates in this ballpark can be found up, therefore acceptable.
If you think prices fall or will remain the same, you rebel against the extension of the duration. If you think that prices will rise, you rebel CDs or money market funds in the short term. She will not ruin himself either way. If you on CDs for a goal that is more than a few years, you should check out questions whether CDs are the right choice for your money.
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