Each depositor insured to at least $250,000 per insured bank

Interpolation

Linear interpolation is a way of estimating a value based on at least two other values. For example, a 9 month and 12 month rate can be used to approximate an 11 month rate.

The 12 month CD is 3 months longer than the 9 month CD.
     (12 - 9 = 3)

The 12 month CD yields 150 basis points more than the 9 month CD.
     (350 – 200 = 150)

On average, the yield of the CD increases 50 basis points for every additional month of maturity.
     (150 / 3 = 50)

Using linear interpolation, we estimate a 10 month CD would yield 2.50% and an 11 month CD would yield 3.00%.
     (2.00% + 0.50% = 2.50%) and (2.50% + 0.50% = 3.00%)

In this example we would assume the comparable market rate for an 11 month CD is 3.00%, and the maximum allowable rate for a bank subject to Section 337.6 is 3.75%.

back to Weekly National Rates and Rate Caps