Federal Reserve officials completed a two-day meeting on October 28, 2026, and announced that they were keeping the federal funds rate steady. This follows a rate increase in September, which was the first increase since 2023. The target range remains 3.75% and 4.00%. Savers with high-yield savings accounts may still see some changes even though there wasn’t a hike in the federal funds rate this time.
When is the next Fed meeting?
Will high-yield savings rates go up?
After the increase in September, many of the accounts on our best high-yield savings accounts raised their rates. Many were modest rate increases — around 20 basis points. And that’s about what we expected. We could continue to see small movements in accounts after this announcement. Either way, the yields on the best accounts are much higher than average, and will likely continue to be higher than the competition.
» Learn more: What the Fed rate decision means for CDs
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What is the federal funds rate?
The federal funds rate, or the “Fed rate,” is the interest rate that banks charge each other to borrow money overnight. According to the Federal Reserve, institutions borrow money and lend from their reserves after hours in order to meet regulatory requirements and to be ready to manage market conditions.
The funds rate is set by the Federal Open Market Committee, which the Federal Reserve uses to help adjust monetary policy based on economic conditions.
For example, raising rates can help ease inflation: A higher federal funds rate generally leads to higher rates for loans or credit cards. This means households may be less willing to borrow money, which could lead to less spending and result in lower prices and less inflation.
When inflation is at or near desired levels, however, lowering rates can encourage more borrowing and spending.
Does the Fed rate affect FDIC insurance?
The federal funds rate is a separate subject from federal insurance, which allows bank customers to access their deposits in the event of a bank failure. Some accounts at banks, such as savings accounts, are typically federally insured by the Federal Deposit Insurance Corp., up to $250,000 per depositor, per ownership category (joint owners or a single owner, for example), per insured bank. If a bank fails, depositors can still access their money, up to the insured amounts.
If earning higher rates in your savings account means your balance will go above federal insurance limits, consider one of these strategies for protecting your money if you’re banking over $250,000.
» Want to dig deeper? Read more about FDIC insurance at banks and NCUA insurance at credit unions
Maximize your savings by choosing a high-yield account
Any time there’s a Fed rate announcement, it’s a good idea to check the interest rate on your savings accounts and shop around to see if there are better options. Not every bank offers strong rates. Some consistently offer a low APY of around 0.01%, and the national average savings account rate is only 0.38%, according to the FDIC.
But online savings accounts tend to offer better rates — many times higher than that average — because institutions that offer these accounts don't have to operate expensive brick-and-mortar branches and can pass the savings on to customers in the form of higher rates and low (or no) fees.
Do high-yield savings account rates change often?
High-yield savings account rates are variable and can change at any time. This is true for accounts with any kind of rate, whether it’s low or average or high. After the September 2026 Fed rate increase, we saw many financial institutions with HYSAs raise their rates. Before that announcement, we saw banks lower their rates following several consecutive decisions to leave the federal funds target rate unchanged. But HYSAs still consistently outperform their competition.
A higher APY can make a visible contribution to your bank balance. Say you have $10,000 in a savings account that earns a low 0.01% APY, which is typical for large banks. After a year, that balance would earn only about a dollar in interest. But put that amount in a high-yield savings account that earns a 4% APY, and it would earn a little more than $400 after a year. That interest would also earn interest over time, a feature known as compound interest. High-yield savings accounts may not make you rich, but you’ll automatically earn much more than you would with a lower rate option.
Use a savings calculator to determine what your bank balance can be with different APYs and see how your money could grow.
See how APYs have moved at high-yield accounts versus regular accounts
The chart below shows how savings account rates have changed over the last few years at a handful of online banks and one national bank.
In 2023 and 2024, many online banks raised savings APYs above 4%, and some offered more than 5%, as the Fed kept benchmark rates elevated. Rates dipped in 2025 and stayed lower for much of 2026. After the September 2026 rate hike, some banks raised their rates slightly. Many online bank APYs remain much higher than the national average.
By comparison, the savings account at the national bank stayed at 0.01% APY.
Note: Rates are shown only for dates when any bank’s APY or the national average changed. The high-yield savings account average (HYSA avg.) includes all the accounts on our best list at any given time, excluding Varo Bank. Current rates may change at any time. APYs are interest rates compounded over one year.
With inflation, why put money in any savings account?
The main reason to save cash is not to outrun inflation but to have easy access to money in case you need it quickly, say, for an unexpected car repair expense. Setting aside funds for financial emergencies can help prevent you from going into debt, which can be costly, especially when interest rates rise.
» See our rate tracker: Inflation vs. high-yield savings rates
Having at least three to six months’ worth of expenses tucked away in an emergency savings fund is ideal, but anything you can put away would help, and it adds up. For example, if you put $10 a week into savings and don’t have to dip into the funds, it’ll add up to more than $500 after a year. And having that money earn interest is a bonus way to have your dollars work for you.
If you have a fully funded emergency savings account, and you have extra cash that you don’t need to access right away, it may be worth looking at other short-term options to grow your money. Some certificates of deposit, for example, earn a better yield than even the best savings accounts. With a CD, you will need to leave the money parked in the account for a predetermined time period, often a year or more, for example. For longer-term goals, such as retirement, it makes sense to look into investing.
The federal funds rate is worth paying attention to. When the Fed rate decreases, savings rates are likely to fall as well. But if you put your cash in a high-yield account, your money can still work hard for you and your savings balance can continue to grow.
More fed rate coverage
Article sources
- 1.Federal Reserve. Federal Reserve issues FOMC statement. Accessed Sep 16, 2026.
- 2.Board of Governors of the Federal Reserve System. Why do interest rates matter?. Accessed Sep 16, 2026.
