Banks raise CD rates as competition for deposits increases

Several banks increased their certificate of deposit, or CD, rates in April as competition for deposits picked up, according to a Morgan Stanley analysis published Wednesday. The analysis found that rates on CDs maturing in one year or less rose to 3.71%, while rates on CDs with terms of 13 to 36 months edged up to 2.62%. Eight of the 35 banks Morgan Stanley follows raised their CD yields. The report said stronger loan demand and an uncertain path for interest rates are helping push banks to offer better returns on cash deposits. Analysts also expect CD rates to stay roughly flat to slightly higher if borrowing demand remains firm and the Federal Reserve keeps rates unchanged.