While looking at the statistics, one will find out that some trends with regards to the previous CD rates have remained constant. Usually, institutions that offer the facility of CD, offer higher rates of interests for CD’s that are made on the basis of maturity period rather than on CD’s wherein the investor can withdraw the money at any given time. For instance, a popular Government Bank had offered an annual interest rate of 0.4% on savings account deposits as compared to the high interest rate of 0.8% on a 3 month CD and as high as 2% on a 2 year CD.

As per the statistics for the CD rates, the trend indicates that over the last 3 decades the rates on interest on CD’s were ranging from 2% to 16% annually. During 1979, the average rate of interest, before considering tax rate and inflation rate, on CDs was 11.44% worldwide. Interestingly, in the same year the interest rates for CD’s fluctuated from a high rate of 66% to as low as 13%. Due to this fluctuation, at the end, the net rate of interest of CD dropped to 9.41%.

Going back to the year 1981, the CD rate was almost 16% and in the same year the tax rate and inflation rate were 66% and 9%. All these factors have influenced in such a manner that the net rate of return on CD reduced to 3.5%. During 1986, the gross interest rate was only 6.6%. The tax and inflation rates were also comparatively low during this year and they varied from 52% to 1.1% . Owing to this, the number of deductions on the CD were reduced which further resulted in the net rate being 2.02%.

Irrespective of the previous rates, billions of dollars have still been invested in CD’s during the 20th and 21st centuries. In order to choose the best option of investment, you need to consider your goal and keep ion mind the rate of interest you are likely to earn at the end.