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Key Takeaways
- The Federal Reserve is expected to trim rates by about half a point by year-end, which could cause savings and certificate of deposit (CD) yields to decline similarly.
- Even with rates likely to drift down, it’s still smart to move cash to a high-yield savings account—earning 4% to 5%—so inflation doesn’t erode your buying power.
- The best nationwide CDs let you lock in rates above 4% for months or years, offering guaranteed earnings no matter what the Fed does next.
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Why Savings and CD Rates Are Easing—and How Much More They Could Slip
The rates banks and credit unions pay on savings depend directly on what the Federal Reserve does with its benchmark interest rate. When the Fed keeps its rate high, yields on savings, money market accounts, and certificates of deposit (CDs) rise too. When it cuts rates, those yields fall.
Right now, the Fed’s rate is still elevated. It’s just below the 22-year high it reached in 2023 and maintained through much of 2024. That’s why it’s still possible to earn more than 4% on your savings today.
But that may start to change soon. The central bank is widely expected to cut rates later this month, and again in December. Further reductions are also possible in 2026.
Why This Matters for You
The Fed’s rate drives what banks pay on savings and CDs, and if a half-point cut arrives this year, it will nudge yields lower. Savers may want to take advantage of today’s still-high savings rates while they last—or even consider adding a CD to lock in top rates before they drift lower.
Of course, no Fed cut is guaranteed until it happens. But with the year winding down, a combined half-point in rate reductions looks like a reasonable bet. And while banks don’t always move in perfect sync with the Fed, a half-point drop in the federal funds rate could translate to about a half-point decline in top savings and CD yields.
That means today’s best rates in the low-4% range could slip to high-3% territory by year-end.
Still, plenty of uncertainty remains. Inflation has ticked higher even as job growth has weakened, leaving the Fed torn between cooling prices and supporting employment. The ongoing government shutdown is also complicating the picture by blocking access to key data on jobs and prices. That means the Fed’s next move in October could easily differ from what policymakers projected just a few weeks ago.
Smart Moves for Savers Right Now
Even if rates fall in the coming weeks and months, it’s still an excellent time for the cash you keep in the bank, especially if you choose the right account. The national average savings rate across all FDIC-insured banks is just 0.40%, but many high-yield savings accounts pay more than 4%, and some offer 5% if you meet certain requirements. You can always check our ranking of today’s best high-yield savings accounts to see which ones are leading the pack.
You can’t control what your bank does to your savings rate, and those yields should eventually slip. But it’s still smart to move your cash into a top-paying account as soon as possible. Inflation was 2.9% in the latest Consumer Price Index report, meaning any money earning less than that is losing purchasing power. Earning 3% or more keeps you ahead of inflation for as long as possible.
If you have more savings than you’ll need in the short term, consider putting some in a CD. With a CD, the rate you sign up for is the rate you keep until it matures—whether that’s in three months or five years. Our daily ranking of the best nationwide CD rates currently maxes out at 4.45% for a 5-month offer, but rates in the lower-4% range are available for every term.
With the Fed expected to lower rates in 2025 and 2026, it’s an ideal time to secure one of today’s top CD rates, locking in a high yield and boosting your future cash earnings no matter what happens next.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is different from the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
