CD Rates Forecast for 2026: Are CD Rates Going Down?

CD Rates Forecast for 2026

All signs point to CD rates going down in 2026. The Federal Open Market Committee (FOMC), a committee within the Federal Reserve, meets eight times a year to decide whether it will adjust the federal funds rate. This is the target rate range that financial institutions use when lending money to each other.

This rate influences the rates banks and credit unions offer to consumers. You can expect to earn more on CDs and savings accounts when the federal funds rate goes up, but pay higher interest rates on credit cards and loans. The opposite also tends to be true.

Are CD Rates Going up or Down?

Researchers at Goldman Sachs are anticipating a rate cut in December, followed by additional cuts in March and June 2026—which would bring the target rate range to 3.00% to 3.25%. Other economists say the Fed may wait until the January 2026 FOMC meeting.

But these are only predictions, and economic indicators have been a mixed bag. The latest jobs report showed better-than-expected job growth in September, which could cause the Fed to hold off on immediate rate cuts. Time will tell how future rate changes actually pan out.

CD Rate Trends From 2020 to 2025

The past five years have seen swings in CD rate trends due to COVID-19, inflation and general economic uncertainty.

2020-2023: Interest Rates Drop During the Pandemic, Then Soar

During the COVID-19 pandemic, the federal funds rate fell to almost zero—and CD yields dropped drastically as a result. Throughout March 2021, the national rate on a 12-month CD was just 0.14%, according to the Federal Reserve. But consumer prices eventually soared, prompting the Fed to increase its target rate range in an attempt to cool inflation. By July 2023, the target range reached 5.25% to 5.50%. While this increased borrowing costs, it also boosted savings earnings with CD yields exceeding 5% during this time.

2024-2025: Interest Rates Begin Falling

The Fed's target rate held steady at 5.33% for most of 2024, but started declining toward the end of that year. That's when the Fed carried out three rate cuts that resulted in a 1-percentage-point drop in the federal funds rate. By October 2025, the rate had fallen by another 0.50 percentage points. The target rate range is currently 3.75% to 4.00%.

As of November 2025, the best CD rates remained at over 4%. But it's worth noting that a rate cut could still happen before the year is out—and that would likely push CD rates down even more. The FOMC is scheduled to meet again in December.

Is Now a Good Time to Open a CD?

Putting money into a CD now could allow you to lock in a better rate before yields potentially drop again. According to the most recent Federal Reserve data, FOMC members are projecting a median federal funds rate of 3.4% by the end of 2026. That's slightly higher than estimates from investment research firm Morningstar.

CDs can help you grow your savings, but they aren't the right investment for everyone. Before opening a CD, you'll want to make sure that:

• It aligns with your investment strategy. CDs are low-risk investments that can help diversify your portfolio and offset risk from more volatile investments like stocks.
• You have a solid emergency fund. Pulling money out of a CD before the term ends often results in an early withdrawal penalty. It's wise to keep some emergency cash reserves in a high-yield savings account in case you run into a surprise expense.
• You don't have high-interest debt. The rate you'll pay on high-interest debt is likely higher than the interest you'll earn on a CD. As of the third quarter of 2025, the average credit card APR was 21.39%, according to the Federal Reserve.

Where to Find the Best CD Rates

CDs are available through banks, credit unions and brokerage firms, but rates vary. Your term length and deposit amount can also affect your yield. Here's a rundown of where you can find the best CD rates:

• Online banks: These banks have lower operating expenses than brick-and-mortar banks. That often allows them to offer better interest rates.
• Credit unions: A credit union is a member-owned, not-for-profit financial institution that may offer higher savings rates on CDs. It's one way they can return profits to their members.
• Brokerage firms: You can purchase brokered CDs with a regular brokerage account. That could help you secure higher rates, but some brokered CDs are callable. That means they can be redeemed before the term ends.

Alternatives to CDs

If a CD doesn't support your financial goals right now, the following alternatives might be a good fit:

• High-yield savings account: Funds are typically locked into a CD until it matures, but a high-yield savings account offers much more flexibility. You can access your money when needed and still earn a competitive interest rate.
• Money market account: Rates are often comparable to high-yield savings accounts, but most money market accounts come with a debit card or checkbook. That can allow for easier withdrawals.
• Bonds: These low-risk investments can provide steady interest payments. By purchasing a bond, you're lending money to the company or government entity that issued it. They're obligated to repay you, with interest. Just be aware that returns typically lag behind CDs' earnings.

The Bottom Line

The CD rates forecast for 2026 suggests that yields are on the decline. That could affect your financial planning, but remember that no one knows for certain how the federal funds rate might change over the next year. Whether you should open a CD right now ultimately depends on your financial situation and goals.