The Federal Reserve decided on July 29 to keep the federal funds rate the same. The target range of the Fed rate remains 3.50% to 3.75%. That's still higher than it’s been for most of the last two decades. This marks the fifth meeting of 2026; the last rate change was a small decrease in December 2025. Uncertainty over the direction that inflation may take has likely impacted the trajectory of the Fed rate changes.
» COMPARE: NerdWallet’s best CD rates
When is the next Fed meeting?
The Federal Open Market Committee's next meeting is September 15-16, 2026. This is the next scheduled time that the FOMC could modify the federal funds rate.
This rate, which is what commercial banks use to borrow and lend money to one another, doesn’t directly raise or lower rates on certificates of deposit, but it can affect them indirectly. When there’s a Fed rate increase, you might see higher CD rates. A lowered Fed rate typically leads to lower CD rates.
Here’s a closer look at how it works.
Member FDIC
E*TRADE Certificate of Deposit
APY
4.05%
Term
6 months
Member FDIC
Synchrony Bank CD
APY
4.15%
Term
14 months
Member FDIC
Bread Savings® CD
APY
4.25%
Term
9 months
Certificates of deposit: 3.70% APY or higher
The most competitive rates on CDs for six-month and one-year terms have started to rise above 4%, while the best three-year and five-year CDs are in the high 3% range, according to a NerdWallet analysis in July 2026. CD rates remain higher than they’ve been for most of the past decade. The highest rates, regardless of the rate environment, tend to be at online banks and credit unions.
» LEARN MORE: CD rate forecast: Are CD rates going up in 2026?
Fed rate increases can mean higher CD rates
As the U.S. central bank, the Federal Reserve tries to keep the economy steady using an important rate it can influence: the federal funds rate. This is roughly the cost of borrowing cash overnight between banks. Typically the Fed lowers its rate to help stimulate the economy and raises it to help curb inflation.
» Learn more: What Fed rate cuts mean for savings accounts
Banks generally follow the direction of the Fed funds rate in setting their rates on loans and savings accounts, including newly issued CDs. So a lower Fed rate can result in lower CD rates, but it may not happen instantly. And CD rates may rise when the Fed rate does.
Locking in high CD rates while they're available might make sense if you’ve been eyeing CDs and they align with your savings goals.
Are CD interest rates rising?
The short answer is yes, but it’s unclear how long this trend will last. We started entering a falling-rate environment in 2024. Rates held steady or slowly dipped for most of 2025, but three Fed rate cuts starting in September 2025 accelerated CD rate drops. Economic uncertainty in mid-2026 has thrown the prospect of upcoming Fed rate decreases into question, and Fed rate increases are possible. The number of rate increases has nearly doubled from about 35 in June to 60 in July, based on a NerdWallet analysis of 50 financial institutions with competitive CD rates.
How different types of CD rates respond to Fed rate changes
- The most competitive rates change often and respond the most to Fed rate cuts. Online banks and credit unions, which have some of the highest CD rates, will likely continue dropping rates as a response to Fed rate cuts.
- More modest rate changes occur across the banking industry. National average CD rates for one- to five-year terms move more slowly than high-yield rates.
- Some rates barely budge in general. Standard CD rates at some of the largest U.S. banks have barely moved for years, regardless of Fed rate changes.
High CD rates for now
The Fed has kept its rate steady in 2026, though the anticipated direction has shifted from downwards to upwards. As a result, banks shifted from dropping to raising CD rates this summer.
Note: CD rate changes impact only new CDs available at banks and credit unions, not existing CDs you have. Step-up and bump-up CDs, which are discussed more below, are the two exceptions.
» Learn more: Historical CD rates
Member FDIC
E*TRADE Certificate of Deposit
APY
4.05%
Term
6 months
Member FDIC
Synchrony Bank CD
APY
4.15%
Term
14 months
Member FDIC
Bread Savings® CD
APY
4.25%
Term
9 months
Savings accounts vs. CDs
A Fed rate drop can lead to lower rates for regular savings accounts and CDs — and a Fed rate increase pushes rates up. But the differences between these accounts can impact which to use and when.
A regular savings account usually has a variable rate, meaning it can change. Your money may earn more interest when the rate rises and less interest when the rate drops. Since you can add or withdraw money over time, this account provides a flexible way to build up savings. See the latest high-yield savings account rates.
A CD generally has a fixed rate. When you open a CD, you lock up an upfront sum of money at one interest rate for a term usually ranging from three months to five years. CD rates tend to be higher than regular savings account rates, but in exchange, you lose access to money in a CD until the term ends unless you pay a penalty to withdraw early.
CDs can be good for setting aside a sum earmarked for a large future purchase, such as a car or house, or simply as a low-risk place for some savings you’ll need years from now. Learn more about when CDs are worth it.
Why would my bank change CD rates but not mine?
A bank generally changes rates on newly issued CDs over time, but CDs that customers already opened don’t have rate changes. The main exceptions are step-up and bump-up CDs, which are structured for potential rate increases during a term. However, bump-up CDs may not have the opportunity for rate increases anytime soon, since these CDs only allow such increases if newly issued CDs of the same term and at the same bank go up.
How to find high CD rates
1. Check out CDs at online banks or credit unions.
Every bank sets its CD rates, but only some have high-yield CDs. Online-only institutions can afford to offer higher rates than brick-and-mortar banks since they don’t have the costs associated with managing a branch network. See the best CD rates.
2. Consider longer CD terms or a CD ladder.
The standard trend is the longer the CD term, the higher the rate, though this hasn’t been the case since November 2022, according to NerdWallet data. Longer can mean four- to five-year CDs compared to six-month to one-year CDs. Bear in mind, though, another trend: The longer the term, the higher the penalty for an early withdrawal. The penalty is usually interest earned over a number of days or months, or even years.
If you want both ongoing access to some money in CDs and high rates, you might opt for a CD ladder. This involves opening multiple CDs with staggered end dates, allowing you to choose to reinvest or withdraw funds after each CD matures. Learn more about CD ladders.
Keep an eye on CD rates
CDs can be a great way to set aside some savings for a near-future goal. And although each Fed rate decrease might not lead to dramatic changes, it's still a good idea to monitor your bank or credit union’s response and compare it with those of other banks and credit unions.
Other ways to save
As you factor CDs into your savings strategies, consider looking into high savings account rates as well as bank bonuses, which can be for checking or savings accounts. If you want a broader overview of account options, here's a guide to multiple ways to earn more interest.
More fed rate coverage
Article sources
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- 1.Board of Governors of the Federal Reserve System. FRED Graph. Accessed Jul 29, 2026.
- 2.Board of Governors of the Federal Reserve System. Policy Tools: Open Market Operations. Accessed Jul 29, 2026.
- 3.Federal Reserve Bank of St. Louis. FRED Graph. Accessed Jul 29, 2026.
