Savings Rates Are Climbing Again After the Fed's First Hike Since 2023: Lock a CD Now or Wait for CPI and the Oct. 28 Fed Decision?

The Federal Reserve's Eccles Building in Washington, D.C., where the FOMC raised rates to 3.75%-4.00% on Sept. 16, 2026

The Federal Reserve's Eccles Building in Washington. The Fed's Sept. 16 hike to 3.75%-4.00% is pushing savings and CD yields higher. Photo: Federal Reserve, public domain, via Wikimedia Commons.

For the first time since 2023, the Federal Reserve is raising interest rates instead of cutting them, and savers are finally getting a raise too. The Fed lifted its benchmark rate a quarter point to 3.75%-4.00% on September 16, and banks have been bumping their yields ever since: ByTheMath logged 198 rate increases and only 9 cuts on U.S. savings, money market and CD products in the first 12 days of October. The best high-yield savings accounts now pay about 4.2%, and the top CDs on Bankrate's list reach 5.00%. Yet the FDIC says the average savings account still pays just 0.37%, and many big banks pay 0.01%. This week brings two events that could move rates again: the September inflation report on Wednesday, October 14, and the Fed's next decision on October 28. Here's where rates stand, whether to lock a CD now or wait, and a checklist for this week.

What changed: the Fed's first rate hike since 2023 is reaching your savings account

On September 16, 2026, the Federal Open Market Committee voted 12-0 to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. Its statement was blunt: "Inflation remains elevated," and the move "will support a timelier return to the Committee's 2 percent goal." The new range took effect September 17.

After six rate cuts in 2024 and 2025, deposit yields had been drifting down; the hike flipped the direction. Banks don't have to follow the Fed, but online banks that compete for deposits tend to respond quickly. NerdWallet noted that CD rate increases at the 50 institutions it tracks were already speeding up before the hike, from about 35 increases in June to about 60 in July and about 100 in August.

The Fed also signaled it may not be done. In the Summary of Economic Projections released with the decision, the median official expected the federal funds rate to end 2026 at 4.1%, the midpoint of a 4.00%-4.25% range. That implies one more quarter-point hike this year. Sixteen of the 18 officials penciled in at least one more increase; only two expected rates to stay where they are. Projections can change with the data.

Where savings and CD rates stand this week (the real numbers)

Here are several independent snapshots from this month:

Median high-yield savings: 3.35% APY on October 12, up from 3.28% on October 1, across 180 accounts tracked by ByTheMath. Twenty-six accounts raised their rate, six cut it.
Top high-yield savings: Bankrate's list on October 12 was led by Peak Bank at 4.27% APY, followed by CIT Bank at 4.25% (on its Platinum Savings, which needs a $5,000 balance), and Happen Bank, EverBank and Western State Bank at 4.20%.
Money market accounts: median 3.46%, up from 3.35% since October 1 (ByTheMath).
CDs: every CD term ByTheMath measures rose this month. The median 12-month CD is 3.80%, and the 18-month term jumped the most, from 3.70% to 3.95%. The top CD on Bankrate's list is 5.00% APY at Popular Direct, which requires a $10,000 minimum deposit.
National averages: the FDIC's national rate, published September 21, was 0.37% for savings, 0.63% for money market accounts, 1.73% for a 12-month CD and 1.38% for a 5-year CD. Bankrate's own national savings average is 0.65%.

Look at how individual banks moved. According to Bankrate's rate histories, EverBank's Performance Savings went from 3.90% to 4.20% in early October, Peak Bank from 4.01% to 4.27%, Western State Bank from 4.00% to 4.20%, and TAB Bank from 3.61% to 3.95% the week after the Fed meeting. Not every bank went up (ByTheMath recorded Barclays cutting its 9-month CD from 4.15% to 4.00%), so check your own rate.

Bar chart comparing U.S. savings yields in October 2026: big-bank savings 0.01%, FDIC national average 0.37%, median high-yield savings 3.35%, median 12-month CD 3.80%, top HYSA 4.27%, 1-year Treasury 4.44%, top CD 5.00%, versus 3.4% August CPI inflation

Chart: what $10,000 earns in a year at today's rates, assuming each rate holds. Sources: Bankrate, FDIC, ByTheMath, Federal Reserve H.15, BLS.

The 0.01% trap: what a big-bank savings account is costing you

A Fed hike doesn't help you if your money sits in an account that barely pays anything. Bankrate notes that many of the largest brick-and-mortar banks still pay 0.01% APY on standard savings. That's $1 a year on $10,000.

Online banks without branch networks compete on rate instead, and the difference isn't small:

$10,000 at 0.01% earns about $1 in a year.
$10,000 at the FDIC national average of 0.37% earns about $37.
$10,000 at the 3.35% median high-yield rate earns about $335.
$10,000 at 4.20% earns about $420.

Those figures assume the rate stays the same for 12 months. Savings rates are variable and can change at any time. But if your emergency fund is at a bank paying close to zero, moving it is the single highest-value step in this article.

Safety doesn't have to suffer. Deposits at FDIC-insured banks and NCUA-insured credit unions are covered up to $250,000 per depositor, per insured institution, per ownership category. Check the bank's FDIC status with the FDIC's BankFind tool before you open an account, especially with a fintech app that holds your money at a partner bank.

This week's calendar: Columbus Day transfers, Oct. 14 CPI and the Oct. 27-28 Fed meeting

Monday, October 12 (Columbus Day / Indigenous Peoples' Day): The Federal Reserve Banks are closed, and FedACH, the system behind most direct deposits and bank-to-bank transfers, stopped processing on Saturday, October 10, at 3 a.m. ET and resumes Monday at 5:30 p.m. ET. If you start a transfer to a new high-yield account today, expect it to settle Tuesday at the earliest, and often a day or two later. Don't move money you'll need for a bill due this week.

Wednesday, October 14, 8:30 a.m. ET: The Bureau of Labor Statistics releases the September Consumer Price Index. August CPI was up 3.4% from a year earlier, with gasoline up 27.4% over 12 months, while core inflation (excluding food and energy) was 2.4%. Forecasters expect headline inflation to rise again. TD Economics' October 9 consensus table calls for 3.6% year over year and 2.5% for core.

Tuesday-Wednesday, October 27-28: The FOMC meets again, with its decision due Wednesday afternoon. This is the next scheduled chance for another hike. After that, the last 2026 meeting is December 8-9.

Why the CPI matters for your cash: a hotter-than-expected reading, especially in core inflation, makes another hike more likely, and banks may raise yields in anticipation. A cooler reading could take some pressure off, and CD rates, which price in expectations, could level off or slip.

Lock a CD now or wait? How to think about the timing

1. Waiting costs very little if your cash already earns a top savings rate. If your money sits in a 4.20% savings account while you watch CD rates, you're giving up very little. On $20,000, the gap between 4.20% savings and a 4.40% CD is about $1.50 over two weeks. (CDs around 4.40% are available now. NerdWallet showed Synchrony's 13-month CD and Bread Savings' 9-month CD at 4.40% this month.)

2. Waiting costs a lot if your cash earns 0.01%. Then every week you delay costs real money. Move it to a high-yield account first, then decide about CDs.

3. The upside of waiting is limited. If the Fed hikes another quarter point and a 1-year CD you want goes from 4.40% to 4.65%, the difference on $20,000 is about $50 over a full year. That's worth having, but it's not worth losing sleep over.

4. A CD protects you if rates fall later. A savings rate can drop anytime; a CD rate can't. If the Fed's projections are right, rates stay high through 2027 and then drift lower (the median projection is 4.1% at the end of 2027 and 3.9% at the end of 2028). Locking part of your cash for 12-24 months guards against that.

5. You don't have to choose all or nothing. Split it: lock half now and half after the October 28 decision. Or use a CD with built-in flexibility. NerdWallet points out that bump-up CDs let you raise your rate at least once if the bank's rates go up, and no-penalty CDs let you withdraw early without a fee. They often pay a bit less than a standard CD, so compare.

One quirk in today's market: the CD curve is fairly flat. ByTheMath's medians are 3.80% for 6 and 12 months, 3.95% for 18 months, 3.70% for 2 years, 3.66% for 3 years and 3.75% for 5 years. Long terms aren't paying much extra right now, so the 12-to-18-month range is where many savers get the best rate for the time locked up. If you want a step-by-step plan for spreading money across terms, see our guide to building a CD ladder.

Calculator, U.S. coins, glasses and a ledger pad on a white wooden desk, used to compare CD and savings account interest

Run the numbers before you lock a CD: the rate, the term and the early-withdrawal penalty all matter. Photo: Artsy Crafty / StockSnap, CC0.

Worked examples: what your cash can earn right now

These are simple one-year estimates using rates published this month. Your actual rate depends on the bank, and savings rates can change.

Example 1: The $25,000 emergency fund. Maria keeps $25,000 in a big-bank savings account at 0.01%, which earns about $2.50 a year. Moving it to a 4.20% high-yield account would earn about $1,050 if the rate held. That's a raise of more than $1,000 a year for about 20 minutes of paperwork, and the money stays liquid and FDIC-insured.

Example 2: The $20,000 house fund with an 18-month horizon. James and Priya plan to buy a home in spring 2028. They put $10,000 in an 18-month CD near the 3.95% median, about $395 in the first year, and keep $10,000 in high-yield savings for flexibility. If the Fed hikes on October 28 and CD rates rise, they can lock the second half higher. If rates stall, half their money is already protected.

Example 3: The early-withdrawal penalty check. Before locking $20,000 in a 1-year CD at 4.40% (about $880 in interest over the year), read the penalty. A common structure is 90 days of interest. On this CD that would be about $217 (that's $20,000 × 4.40% × 90/365). If there's a real chance you'll need the money, that penalty can wipe out most of your advantage over a savings account. Penalties vary by bank and term, so read the disclosure before you fund.

Inflation and taxes: your real return is smaller than the APY

A 4.20% APY sounds great until you account for two things.

Inflation. With consumer prices up 3.4% over the 12 months through August, a 4.20% account earns only about 0.8 percentage point above inflation. The national-average savings account, at 0.37%, is losing about 3 points of purchasing power a year. If September's CPI comes in around the expected 3.6%, the cushion shrinks further.

Taxes. Interest from savings accounts, money market accounts and bank CDs is taxed as ordinary income, and your bank sends a Form 1099-INT if you earn $10 or more. If you're in the 22% federal bracket, a 4.20% yield is about 3.28% after federal tax, which is slightly below August's 3.4% inflation rate. On the $1,050 Maria would earn in Example 1, the federal tax would be about $231, before any state income tax.

Cash still has a job: emergencies and near-term goals. But money you won't need for five years or more usually belongs in long-term investments, not a savings account.

Treasury bills and money market funds: the alternatives worth comparing

Banks aren't the only place to park cash. Treasury yields rose along with the Fed's rate. The Federal Reserve's H.15 report shows the 1-year Treasury constant-maturity yield at 4.44% on October 8, the 6-month at 4.30% and the 3-month at 4.23%.

Treasury interest is subject to federal income tax but exempt from state and local income taxes. That's a real edge if you live in a high-tax state. For example, if you pay 5% state income tax, a bank CD would need to pay roughly 4.67% to match a 4.44% Treasury after state tax (4.44% ÷ 0.95). You can buy Treasury bills directly at TreasuryDirect or through a brokerage account. Brokerages also sell brokered CDs, which sometimes pay more than bank CDs but work differently if you sell early.

Brokerage money market funds (not the same as bank money market accounts) track short-term rates closely, but they are investments, not FDIC-insured deposits.

The other side of the hike: your credit card APR just went up

The same hike that's lifting savings yields is raising what you pay on credit card balances. Most U.S. credit cards have a variable APR set at the prime rate plus a margin. The prime rate rose to 7.00% on September 17, and it's still 7.00% in the Fed's H.15 data for early October. FinBedrock, which tracks 127 cards, recorded APR increases that exactly matched the prime move on 45 of them.

The Federal Reserve's G.19 report shows the average APR on credit card accounts that were charged interest reached 22.36% in August 2026, up from 22.15% in May. Here's the math on a $5,000 balance:

At 22.36%, a $5,000 balance costs about $1,118 a year in interest.
The quarter-point hike adds only about $12.50 a year.
Another quarter point on October 28, which would likely push prime to 7.25%, would add about another $12.50.

The hike is a rounding error; the real cost is the 20%-plus APR. If you carry a balance and you also have spare cash earning 0.01%, paying down the card is a guaranteed "return" of more than 20%, far better than any savings account. Keep your emergency fund, but put extra cash toward the balance, or look at a 0% balance transfer if your credit qualifies. Our explainer on how credit card interest works walks through grace periods and daily balances.

Your 20-minute savings checklist for this week

Find your actual rate. Look up the APY on your savings and checking accounts. Under 1% means you're losing ground to inflation.
Compare three options. Pick an FDIC- or NCUA-insured high-yield savings account paying around 4% or more with no monthly fee and a low minimum. Read the fine print for balance minimums (CIT's top rate needs $5,000) or monthly deposit requirements (Happen Bank's top rate needs $250 in deposits a month).
Verify insurance. Search the bank in FDIC BankFind or the credit union in NCUA's lookup. For fintech apps, find out which partner bank holds your money.
Start the transfer with the holiday in mind. ACH transfers started on Columbus Day won't begin processing until Monday evening. Leave enough in checking for bills due this week.
Size your emergency fund. Keep three to six months of essential expenses liquid in high-yield savings. Don't lock it in a CD.
Decide on CDs in two steps. Consider locking part of your extra cash now in a 12-18-month CD, and revisit after the October 14 CPI and the October 28 Fed decision.
Read the CD penalty and renewal terms. Note the maturity date in your calendar. Many CDs auto-renew at whatever rate is current, which may be lower than what you could get elsewhere.
Compare Treasuries if you pay state income tax. Check 6-month and 1-year bill yields at TreasuryDirect or your brokerage.
Check your credit card APR. Look at your latest statement. If you carry a balance, plan to pay it down faster or look into a balance transfer.
Set a reminder for October 28. Rates may move again after the Fed's decision. Recheck your savings APY in early November.

FAQ

Will my savings account rate go up automatically after a Fed hike?
Not necessarily. Banks set their own deposit rates. Many online banks raised yields after the September 16 hike, but many big banks still pay 0.01%. Check your APY, and move your money if your bank doesn't keep up.

Should I wait until after October 28 to open a CD?
If your cash is already earning about 4% in a high-yield account, waiting two weeks costs very little, and you could get a slightly higher CD rate if the Fed hikes. If your cash earns almost nothing, move it to a high-yield account now. Splitting your CD money, half now and half later, is a reasonable middle path.

Is a 5.00% CD worth it?
It can be, if you can leave the money alone for the full term and meet the minimum deposit. (The 5.00% top rate on Bankrate's list requires $10,000.) Check the term, the early-withdrawal penalty and whether the CD auto-renews.

What happens to my CD if the Fed raises rates again?
Nothing. A standard CD's rate is fixed until maturity. That protects you if rates fall but means you won't benefit from further hikes, unless you have a bump-up CD.

Does the hike affect my fixed-rate mortgage or car loan?
No. Fixed-rate loans keep their rate; new loans and variable-rate debt such as credit cards and HELOCs get more expensive. Shopping for a home? See our look at mortgage rates at a 3-year high.

Sources

Rates are as published by the sources above on the dates noted and can change at any time. Confirm current terms with the bank or credit union before opening an account. This article is for general education only and is not financial, tax or investment advice.

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