2026 CD rate forecast: Should you lock in rates before expected cuts?

As 2026 gets underway, savers who rely on certificates of deposit (CDs) are facing an increasingly pressing question. Does it make sense to lock in today’s CD rates, or to hold out and see what happens next?

With CD yields hovering around 4.00% and some economists expecting the Federal Reserve to cut interest rates this year, the days of reasonable returns on cash may be limited. What looks like a pretty good rate today could be hard to find just months from now.

This article takes a closer look at the CD rates forecast for 2026, along with factors expected to create an impact in the coming months. You’ll learn what experts are saying about the timing and size of potential rate cuts, which CD terms could be hit first, and how waiting versus acting now could affect your returns. By the end, you’ll have a clearer sense of whether locking in a rate now makes sense for your savings — or if patience might still pay off.

Current CD rate landscape in early 2026

As of early 2026, CDs continue to offer attractive yields compared with where they stood just a couple of years ago. In fact, today’s best offers extend roughly 3.8%-4.1% APY on 6-month and 1-year CDs, and competitive yields on longer terms as well. These offers come from mostly online institutions like Capital One, Marcus by Goldman Sachs and Synchrony Bank.

That said, it’s important to note that promotional rates on the best CDs are much higher than national averages. According to the Federal Deposit Insurance Corporation (FDIC), the average 3-month CD offered just 1.35% APY as of Jan. 20, 2026, along with 1.57% APY for 6-month CDs and 1.61% APY for 12-month CDs.

To understand how we got here, we need to look at recent history. CD rates surged in 2022-2023 alongside the Federal Reserve’s aggressive rate-hiking cycle, which pushed benchmark interest rates higher. Since late 2025, however, the Fed has started easing rates with further rate cuts expected in the future. These shifts directly influence what banks are willing to pay on deposits, setting the stage for potentially lower CD yields later in the year.

CD rates forecast 2026: What the experts predict

The big question for savers now isn’t just where CD rates are today — it’s where they’re headed. The general forecast for CD rates implies the Federal Reserve is likely to loosen monetary policy this year, and that shift could put downward pressure on CD yields. While there isn’t a unanimous view, a consensus has emerged among economists, financial institutions, and markets that the Fed will pivot toward rate cuts in 2026.

Timeline of expected rate cut changes in 2026

Looking at the expected rate path, most forecasts point to modest easing rather than aggressive cuts. According to the Federal Reserve’s Summary of Economic Projections, the median expectation from policymakers calls for about a one-quarter-point rate reduction in 2026, bringing the federal funds rate down modestly by year-end.

Markets and private forecasts, however, lean a bit further. Many analysts and interest-rate futures pricing suggest the possibility of two rate cuts totaling around 50 basis points over the course of the year, with potential cuts clustered in the mid-to-late 2026 period (e.g., Q2 and Q3) if inflation continues to cool and labor markets soften.

However, some large banks and research houses now see a flatter path, with little to no cuts — or even a prolonged hold on rates if economic data proves firmer than expected. For example, JPMorgan Chase’s economists recently pushed back on earlier easing forecasts, arguing that strong employment figures and persistent inflation could keep the Fed on hold throughout 2026.

How much could CD rates fall?

Experts tracking Federal Reserve policy and deposit-rate trends generally project a continued downward drift for CD yields through 2026 — not a collapse, but a meaningful step below today’s levels. This means top offers on one-year CDs could slip to roughly 3.5% APY by year-end, while the best five-year CDs are likely to be around 3.8% APY — noticeably lower than many of the 4%+ promotional rates available in 2025 and early 2026.

What does that mean in real terms?

$10,000 in a 1-year CD:

• At 4.20% APY, you earn about $420 in interest over 12 months
• At 3.25% APY, you earn roughly $325 — nearly $100 less in earnings

$50,000 in a 5-year CD:

• At 4.00% APY, you earn approximately $2,000 in interest over one year
• At 3.80% APY, you earn about $1,900 per year — almost $100 less each year

Those differences add up even more for larger balances or if you’re building a laddered strategy.

Short-term CDs (like 6-month or 12-month terms) tend to adjust more quickly to rate moves, so they could see faster yield declines as the Fed cuts rates. Longer-term CDs may hold higher rates for a time because they lock in yields over several years, but their new issues will still reflect the lower interest-rate environment that develops as policy eases.

Should you lock in rates now? Strategic guidance for consumers

With the best CD rates still hovering over 4.00% APY and most forecasts pointing toward cuts later in 2026, it’s natural to wonder whether now is the moment to act — or whether you should just wait it out. The right answer depends on your goals, your timeline, and how much flexibility you need.

The case for locking in current rates

The strongest argument for locking in now is the most obvious one. Today’s rates may not be available much longer. If the long term CD rates forecast holds and yields slide closer to 3.00%-3.50%, locking in a higher rate today could help you score a higher return.

Consider a $10,000 deposit:

• At 4.20% APY, a 1-year CD earns about $420
• At 3.50% APY, that same CD would earn about $350 — a $70 difference in just one year

The gap in earnings widens even more across CDs with longer terms. A 3- or 5-year CD locked in at today’s rates could generate hundreds (or thousands) of dollars more in interest compared with waiting until rates fall. This difference is especially important for savers who likely won’t need access to their money in the next few years.

Early withdrawal penalties are worth weighing as well, but many banks cap penalties at a few months’ worth of interest. If you’re confident you won’t need the money, or you’re locking up only part of your savings, the risk of having to pay early withdrawal penalties may be worth it.

When waiting might make more sense

That said, locking in today’s CD rates may not always be the best move. If you expect to need the money soon, or you’re still building an emergency fund, liquidity matters more than yield. Short-term CDs, high-yield savings accounts and money market accounts offer the chance to earn interest without locking up your cash for longer than you need.

It’s also important to remember that the forecast for CD rates is not a guarantee. If inflation remains high or the economy stays strong, rate cuts may not come as soon as some experts think.

Consider a CD laddering strategy

For many savers, CD laddering offers the best of both worlds. Instead of committing everything at once, you spread your money across multiple terms.

For example, a $20,000 ladder could look something like this:

• $5,000 in a 3-month CD
• $5,000 in a 6-month CD
• $5,000 in a 1-year CD
• $5,000 in a 2-year CD

As each CD matures, you get the chance to reinvest at current rates or take the cash if you need it. Compared with putting the full $20,000 into a single short-term CD, a ladder typically delivers higher overall returns while maintaining regular access to your money.

In an uncertain rate environment, laddering helps hedge your bets and lock in attractive rates now without sacrificing flexibility later.

Comparing CD options: What to consider beyond rates

While a strong APY is important, it shouldn’t be the only thing guiding your decision. Two CDs with similar rates can look very different once you dig into the details. When comparing options, keep these key factors in mind:

• Minimum deposit requirements: Minimum deposit requirements for CDs can range from a few hundred dollars to $10,000 or more, especially for jumbo or promotional CDs. Make sure the minimum doesn’t force you to tie up more cash than you’re comfortable locking away.
• Early withdrawal penalties: If you have to access your CD funds early, early withdrawal penalties can add up to several months of interest or more.
• Bank safety and insurance: Confirm institutions you’re considering are FDIC-insured (or NCUA-insured for credit unions), and that your deposits stay within insurance limits. This protects your principal even if the institution fails.
• Special CD types: Keep specialty CD types in mind as well, including no-penalty CDs and bump-up CDs. If you have a larger amount to invest, consider jumbo CDs.
• Online banks vs. traditional banks: Online banks may offer higher rates thanks to lower overhead, while brick-and-mortar banks may provide easier access and in-person support.

Red flags to watch for: When shopping around for CDs, watch out for unusually high minimum deposits, vague penalty language, automatic renewals at much lower rates, and restrictions that limit access to your funds.

Alternative savings strategies to consider in 2026

In 2026, many savers are pairing CDs with other low-risk options to balance returns, flexibility and access to cash. High-yield savings accounts remain a solid choice for emergency funds or short-term goals since they offer competitive rates with full liquidity. Likewise, money market accounts offer similar flexibility, often with slightly higher yields but higher minimum balance requirements.

For savers comfortable with government-backed securities, treasury bills and bonds are another alternative. T-bills offer short maturities and state tax advantages, while longer-term treasuries can lock in yields similar to CDs.

At the end of the day, it may make sense to spread savings across multiple types of accounts, including CDs. That way, you can get the benefits of each one while keeping some of your cash within reach.

Bottom line

Whether you decide to lock in today’s CD rates or take a “wait and see” approach, now is a smart time to review your savings goals, decide how much liquidity you need, and compare CD rates from multiple banks and credit unions. While no one can predict interest rates with certainty, understanding the future CD rates forecast and your full range of options puts you in control of your financial future.

Also remember to check out other types of savings accounts, especially if you’re unsure when you’ll need your money. You can always pair today’s best CDs with a high-yield savings account or money market account for increased liquidity.