How High Could CD Rates Go in 2026?
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Certificate of deposit (CD) rates are expected to plateau through the first half of 2026, offering a narrow window for savers to lock in yields before the Federal Reserve potentially cuts rates.
While the national average for a 1-year CD remains stagnant at 1.81%, top-tier online banks like Synchrony, Capital One 360, and Ally are maintaining rates between 3.50% and 4.00%.
Analysts suggest that while the era of 5% yields is largely over, competitive pressure among online lenders will keep specialty "no-penalty" and short-term CD rates significantly higher than traditional savings accounts for the next six months.
The Fed factor
The primary driver for 2026 rates is the Federal Reserve's shift toward a "neutral" stance. After a period of aggressive hikes, the central bank is expected to hold steady or begin incremental cuts by mid-year.
For savers, this creates a "use it or lose it" scenario. Once the Fed officially pivots, banks typically lower CD marketing rates within 24 to 48 hours. Locking in an 18-month or 2-year CD now ensures a fixed return even if market rates drop to 3% by year-end.
The cost of inaction
The gap between "big bank" yields and online CDs remains the largest hurdle for consumer wealth. On a $25,000 balance:
- Traditional savings (0.01%): $2.50 annual interest
- High-yield CD (4.00%): $1,000 annual interest
The opportunity cost of leaving funds in a standard savings account could be around $1,000. You can compare some of the best CD rates available right here, right now.
What to do now
Favoring "odd-term" CDs, such as 7-month or 11-month durations, seems to be the play right now without committing to long-term high payouts. No-penalty CDs are also seeing a surge in popularity, allowing savers to exit the certificate early if a better rate or an emergency arises.
CD rates in 2026 could edge a little higher. But the upside is limited, and the downside of waiting can be permanent.
For most savers, the smarter move is not chasing the peak. It's comparing rates and locking in certainty while it's still available.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.
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Ally is an advertising partner of Motley Fool Money. Synchrony Financial is an advertising partner of Motley Fool Money. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.