Recent weeks have seen a steady rise in the yields on Treasury bonds, which have also taken mortgage rates higher. So why haven't CD rates risen?

By mid-June, 5-year Treasury bonds were 75 basis points higher than they were in May. Conventional mortgages had jumped 73 basis points. CD rates? They had actually declined from where they were in May.

There is an explanation for the difference between bond market trends and the way CD rates are behaving, and better yet, there is something you can do about it.

Treasury Interest Rates vs. CD Rates

A look at interest rates on Treasuries across all maturities reveals one reason why CD rates were slow to move. All of the action with rising interest rates has occurred from 2-years and out on the Treasury yield curve. Short-term Treasury yields, which bear more relation to CD rates, have barely budged, or have even declined slightly since May.

In part this is because of a difference in focus. A very short-term investment is going to react solely to the immediate economic environment. That environment is characterized by a recession and mild deflation, both of which are conducive to low interest rates. On the other hand, rising commodity prices and a weakening dollar have awakened concern that inflation may ultimately return. Longer-term income securities are more sensitive to this, because they would be exposed to a higher inflation rate for longer.

How You Can Find the Highest CD Rates

It's also helpful to remember that Treasury interest rates are set on a freely-traded open market, whereas CD rates represent a series of different business decisions by individual banks. This makes them slower to react to changing market conditions--and less uniform in their reactions.

Those differences are the silver lining. Some banks are being more aggressive than others about trying to attract depositors, and this means they are offering higher rates. This gives you an opportunity to shop around and find the highest CD rates.