Will CD Rates Continue to Go Up in 2026?

The Federal Reserve began lowering the federal funds rate in 2024 in an effort to reduce the inflation rate, which was 2.9%. These rate shifts impact certificate of deposit (CD) rates, and through 2025, changing economic conditions and policy signals contributed to periods of market volatility. As 2026 begins, CD rates continue to reflect evolving monetary policy, inflation data and broader economic conditions, leaving their direction dependent on how these factors develop.

A financial advisor can help you understand how CDs fit into your overall investment strategy.

Will CD Rates Rise in 2026?

When the Fed raises interest rates, banks tend to increase CD rates, as well. However, recent history points to a trend of lower, not higher, rates. Ever since the pandemic wreaked havoc on the economy, the Federal Reserve has been actively adjusting the federal funds rate accordingly. 2023 and 2024 saw several increases before rate cuts began in September 2024, causing CD rates to drop in response. The Fed cut rates three times in 2025, dropping a quarter point by year’s end and creating today’s federal fund rate of 3.5-3.75%

CD Rates Will Likely Continue to Drop in 2026

More cuts may be necessary if the Federal Reserve wants to achieve its goal of a 2% inflation rate. “In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” it said in a statement during the last rate cut in December 2025.

2026 National CD Deposit Rates

CD Term	CD Rate
1 month	0.24%
3 months	1.44
6 months	1.58
12 months	1.63
24 months	1.41
36 months	1.33
48 months	1.24
60 months	1.34%

Source: Federal Reserve, as of December 15, 2025

Some of the best CD rates today stand as high as 4.10 percent, a full 2% below the record-high rates of 2024. We find that banks like Marcus by Goldman Sachs, Capital One and Synchrony Bank offer some of the highest rates.

According to Morningstar projections, growth should slow over the next two years with falling rates moving into 2027. Overall, Morningstar predicts future cuts to create a 2.25%-2.50% target rate by mid-2027.

This means now is a good time to open your CDs and ladder your accounts so you can lock in low rates and receive the greatest growth from the most interest possible.

Deciding Which CD Rates and Terms Are Best for You

CD rates typically offer terms ranging from three months to five years. Think carefully before committing to a timeline because accessing your money early exposes you to early withdrawal penalties. If you feel stuck as to where to put your cash and need to get a clearer picture of your options, speaking with a financial advisor can help you make a sound choice. An advisor can help you identify your savings goals and risk profile. They can also help you go over the pros and cons of CD investing so you know if it is the right savings vehicle for your needs.

How to Lock in Competitive CD Rates

If you are looking to get the most from a CD account, timing and strategy matter. CD rates tend to rise when the Federal Reserve raises interest rates, but they can fall just as quickly when the market shifts.

That is why it is important to shop around and compare CD rates across different banks, especially online banks and credit unions, which often offer the best deals.

One way to lock in a good rate while keeping some flexibility is to open a short-term CD. These usually have terms of six months to one year and may offer high yields without tying up your money for too long. If rates continue to climb, you can reinvest in a higher-rate CD once the short-term CD matures. This keeps your options open without missing out on current rates.

Another method is to build a CD ladder. This means splitting your savings across several CDs with different maturity dates, such as 6 months, 1 year, 2 years and 3 years. As each CD matures, you can reinvest it at the current rate or use the funds as needed. This strategy helps balance earning potential with ongoing access to your money.

You can also look into no-penalty CDs. These let you withdraw your money early without losing interest. The trade-off is a slightly lower rate, but the added flexibility can be worth it if you are not sure how long you can leave the money untouched.

Always read the terms carefully and compare the annual percentage yield (APY), minimum deposit and withdrawal requirements before choosing a CD.

What Could Change the Outlook for CD Rates in 2026

CD rates are influenced by Federal Reserve policy, but they do not move on a fixed schedule. If inflation shows signs of reacceleration or remains above the Fed’s target, policymakers may pause rate cuts or adjust the policy path. Such shifts can affect how banks price all types of certificates of deposit, particularly shorter-term offerings.

Labor market conditions may also play a role. Strong employment data or rising wage pressures can affect inflation expectations, which can influence interest rate policy. If economic data point to sustained growth rather than slowing activity, banks may be less inclined to lower CD rates as quickly.

Broader economic or financial disruptions could alter expectations. Events such as credit market stress, geopolitical developments, or changes in fiscal policy can affect investor demand for lower-risk investments. These factors may lead banks to adjust deposit rates independently of incremental changes in the federal funds rate.

CD rates can also vary by term length and institution. Short-term CDs often respond more quickly to policy changes, while longer-term CDs may reflect expectations about future rates. Differences in bank funding needs, competition, and balance sheet strategies can lead to uneven rate movements across the market in 2026.

Bottom Line

Conventional wisdom tells us that it is better to open a CD account before the rates fall,. A CD ladder with a short term goal, like a new emergency fund, can help you lock in today’s rates while giving you regular access to your cash. The only guarantee is that rates will change eventually, so doing your research or working with a financial advisor can help you make the best choice for your investment portfolio.

Tips for Investing

Whenever you’re considering specific types of investments then you may want to consider working with a financial advisor. An advisor can help you choose the right investments and make sure you’re on track to meet your financial goals. If you don’t have a financial advisor, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re trying to determine what a potential return might look like on a CD or another investment, consider using SmartAsset’s free investment return and growth calculator.