Will HYSA and CD Interest Rates Drop Further in 2026?
Updated July 10, 2026 · SmartRates Editorial Team
⚡ In short
HYSA rates are variable and CD rates are fixed at origination, and both track the broader interest-rate environment set in large part by Federal Reserve monetary policy. Whether rates fall, rise, or hold in the future depends on upcoming Federal Reserve decisions, which are not predictable with certainty in advance — current rate levels and the Fed's own published outlook are available directly from the Federal Reserve and the FDIC.
📌 Key facts
- The federal funds rate, set by the Federal Reserve's FOMC, is a primary driver of the broader deposit rate environment, though not the only factor
- HYSA rates are variable and can change at the bank's discretion at any time, typically following the general direction of broader rate trends
- CD rates are fixed once opened, based on the rate environment and specific term length available at the time of purchase
- The FDIC publishes a national average deposit rate, updated regularly, as one benchmark for current conditions
🏛️ Official sources
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What drives deposit account rates
Bank deposit rates are influenced by several factors, but the Federal Reserve's target range for the federal funds rate — the rate banks charge each other for overnight loans — is a primary driver of the broader rate environment that HYSA and CD rates move within. Bank-specific competitive positioning and funding needs also play a role, which is why rates vary between banks even under the same Fed policy.
How Federal Reserve decisions filter through
The Federal Open Market Committee (FOMC) meets on a regular schedule throughout the year to set the federal funds rate target, and announcements from these meetings are closely watched because changes to the target rate tend to influence deposit and loan rates across the banking system, though the timing and size of the pass-through to any specific bank's advertised HYSA or CD rate varies.
Why HYSA rates move more freely than CD rates
Because a HYSA's rate is variable and can be adjusted by the bank at any time, it tends to reflect changes in the broader rate environment relatively quickly, in either direction. A CD's rate, once opened, is fixed for its full term, so a CD opened before a rate change does not adjust to reflect what happens afterward.
How CD rates are set at origination and then locked
A CD's advertised rate at the time of opening is based on prevailing market conditions and the specific term selected, and that same rate then applies for the entire term regardless of subsequent Fed decisions — this is the defining trade-off discussed further in whether to lock in a CD before a rate change.
Where to check current national average rates
The FDIC publishes a national average rate for savings accounts and CDs of various terms, updated on a regular basis, providing a benchmark independent of any single bank's advertised rate — comparing a specific offer against this published average is one way to gauge how competitive a given rate currently is.
Why exact future rate predictions aren't reliable
Federal Reserve policy decisions depend on evolving economic data — inflation, employment, and broader growth indicators — that are not fully known in advance, which is why neither individual forecasters nor the Fed's own published projections should be treated as guaranteed outcomes for future rate levels.
How this relates to CD ladders and rate diversification
Because future rate movement isn't known with certainty, some savers use a CD ladder — spreading funds across multiple CD terms — as a structural way to avoid committing an entire balance to a single rate at a single point in time, rather than attempting to predict the exact timing of future rate changes.
How rate changes are typically communicated to depositors
Banks are generally required to disclose changes to a variable HYSA rate to existing account holders, though the specific method (statement notice, app notification, or website posting) and advance timing vary by institution and are governed by each bank's account agreement together with Regulation DD disclosure requirements, rather than a single uniform notice period across all banks.
Comparing rate trends across recent years for context
Published historical rate data — available through both the Federal Reserve and the FDIC — shows that deposit rates have moved through multiple up and down cycles over past years, tied to the broader economic conditions the Fed was responding to at each point; this historical pattern illustrates that rate environments shift over time rather than remaining static, without implying a specific prediction for any future period.
Frequently Asked Questions
Does the Federal Reserve directly set HYSA and CD rates?+
No — the Fed sets the federal funds rate, which influences the broader rate environment that banks operate within, but each bank independently sets its own advertised HYSA and CD rates.
How often does the FOMC meet to review rates?+
The Federal Open Market Committee meets on a regularly published schedule throughout the year — the current schedule is available on the Federal Reserve's website.
Do all banks change their HYSA rates at the same time?+
No — each bank adjusts its own advertised rate on its own timeline and by its own amount, even when responding to the same broader rate environment.
Is there a way to see the Fed's own rate outlook?+
The Federal Reserve publishes economic projections, including FOMC participants' rate expectations, following certain scheduled meetings, available on federalreserve.gov.
Does a CD's fixed rate change if the Fed cuts rates after it's opened?+
No — a CD's rate is locked in for its full term at the rate in effect when it was opened, regardless of what happens to rates afterward.
Where can the current FDIC national average rate be checked?+
The FDIC publishes updated national average deposit rates for various account and CD term types directly on fdic.gov.
Are banks required to notify customers before lowering a HYSA rate?+
Generally yes, under Regulation DD and each bank's own account agreement, though the specific notice method and timing vary by institution rather than following one uniform standard.
Do CD and HYSA rates always move in the same direction at the same time?+
Not exactly — while both generally track the broader rate environment, the timing and magnitude of adjustment differ, since HYSA rates adjust variably at the bank's discretion while CD rates are only set at the moment a new CD is opened.