With a very stronger than expected job report released today, we may see a lowdown in the trend of falling CD rates. It seems that the funds rate will stay at 5.25% at the next Fed meeting on December 12. If a strong job growth continues, this could lead to rising wage inflation and maybe a return to the rate hikes in 2007.

From history, it looks as if we are at the peak in the certificate of deposit rates cycle, and with long-term CD’s continuing to fall, perhaps it’s a sign to lock into some high yield long-term CD’s. IF you do lock into some long-term CD’s, be sure to check on the early withdrawal penalties. If the conomy surprises the banks and contiunes the growth, we could see high cd rates come back again by next year. If the early withdrawal penalty is small enough, it may be worth it to break the CD and jump on the new offer. The average penalties for long-term CD’s tend to be a 6-month of interest. A 3-month penalty is sometimes available. Becarefull for those who penalize you for half the CD term. That can be 30 months of interest on a 5-year CD rates.