Everyone Told You to Lock In a CD Before Rates Fell. CD Rates Went Up Instead.

Update, September 17, 2026: It was a hike. The Federal Open Market Committee voted 12 to 0 on September 16 to raise the target range a quarter point, to 3.75 to 4 percent, and said flatly that “inflation remains elevated.” That settles the question this post has been tracking since August. The lock-it-in-before-rates-fall advice was wrong twice over: rates never fell, and the next move went the other way. Now here is the number nobody puts in a press release. Money a bank does not lend out can sit at the Federal Reserve, and as of today the Fed pays 3.90% on those reserves. The FDIC’s national average savings account pays 0.38%. That gap is not an accident and it is not going to close on its own. Nothing below changes. Keep the maturities short, and go collect the 4% that already exists.

Update, September 5, 2026: Two things. First, a correction: this post previously put the September FOMC meeting on the 16th and 17th. The Federal Reserve’s own calendar has it on September 15 and 16. Every date reference below is fixed. Second, the August jobs report landed on September 4 and it did not help the case for a cut. Payrolls rose 162,000 against a consensus near 55,000, the biggest gain in five months, and the unemployment rate held at 4.1%. July, first reported as a loss, was revised up to a gain of 21,000. Market-implied odds of a quarter-point hike at the September meeting moved from roughly even to about 60% on the release. The August CPI print due September 11 is still the swing factor. Nothing here changes the advice: keep maturities short and stop paying a bank for a five-year commitment it prices at five basis points.

Update, September 4, 2026: The odds kept moving, and not toward a cut. The 37 percent hike probability cited below was the August 19 reading. By August 30 the CME FedWatch Tool had it at 57 percent, and by September 3 traders were at roughly even odds between a 25 basis point hike and a hold at the September 15 and 16 meeting. Bank of America economist Shruti Mishra says the August inflation print due September 11, not the jobs report, is the release that decides it. Meanwhile your bank is moving the other way: the top nationally available savings rate is 4.10 percent at CIT Bank while the FDIC national average sits at 0.38 percent. Banks started trimming deposit yields months ago on the assumption cuts were coming. That assumption is now the minority position. Everything below still holds. Keep maturities short.

If you moved money into a long CD this spring because everyone said rates were about to fall, you can stop kicking yourself. The rates went the other way.

The nationwide average CD yield across all maturities was 3.03 percent APY in February. By August it was 3.56 percent. The top one percent of rates went from 4.06 percent to 4.25 percent over the same months.

That is the exact opposite of what the entire industry predicted in January, when the consensus called for one to three more Fed cuts and the advice everywhere was to lock in before the window shut.

Nobody is going to write a correction. So consider this one.

The reason this matters isn’t scorekeeping. It’s that the same voices are still telling you to lock in, and the market is no longer agreeing with them. As of August 19, the CME FedWatch Tool put a nearly 37 percent probability on a rate hike at the Fed’s September 16 meeting. Not a cut. A hike. That’s not a prediction, it’s a roughly one-in-three chance that the next move goes the direction almost nobody planned for.

Now look at what the CD market is actually paying you to take a long view. As of August 19: 4.20 percent at six months. 4.20 percent at 12 months. 4.20 percent at 24 months. 4.25 percent at 60 months.

Read that again. Five years of your money, locked, penalty attached, for five basis points more than six months.

That’s a flat curve, and a flat curve is the market telling you it has no idea what happens next either. When the bank won’t pay you a premium to commit, don’t commit. There is nothing clever about accepting a rounding error in exchange for four and a half years of not being able to change your mind.

So here’s the move. Keep the maturities short while the curve is flat: six and 12 months, laddered so something comes due every few months and you can react instead of predict. If a five-year CD ever pays a real premium over the short end, take it then. Right now it doesn’t.

And shop the rate. The gap between the average CD and the top of the market is roughly seven-tenths of a point, which is most of what you’d earn arguing about term length. Your own bank is almost certainly not paying the top rate, and it is counting on the fact that you won’t check. Our savings calculator will show you what that gap is worth on your balance, and the savings hub and best savings accounts pages cover where the top rates actually live.

One thing that doesn’t change: your existing CD is fine. A fixed rate is fixed until maturity no matter what the Fed did on September 15 and 16, or does in December. The only decision in front of you is what you do with the money when it comes back.

The forecasters were confident. They were also wrong. Ladder short.

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