The CD Rate Gap: What Banks Pay Savers vs. Treasuries

Key findings

1. Average CDs pay well under half the Treasury yield. The FDIC's national average for a 12-month CD was 1.73% on August 31, 2026, while the 1-year Treasury yielded 4.16%. That's a gap of 2.43 percentage points: savers earned about 42 cents for every dollar of the risk-free rate. On $10,000, that's $173 in a year instead of $416.
2. Locking money up longer pays less, not more. The average 60-month CD paid 1.38%, less than the average 12-month CD, even though the 5-year Treasury yielded 4.49%. The gap is 2.43 points at 12 months and 3.11 points at 60 months. Over five years, $10,000 earns $710 in the average 5-year CD and $2,456 at the 5-year Treasury yield.
3. The average CD hasn't beaten inflation since this data series began. In all 65 monthly readings since February 2021, the average 12-month CD rate was below the annual inflation rate. In August 2026, inflation was 3.40%, which puts the average CD's real return at −1.67 points.
4. CD rates barely followed the Fed, in either direction. From February 2022 to the CD rate's peak in August 2024, the Fed raised its target rate by 5.25 points while the average 12-month CD rose 1.73 points, about 33 cents per dollar of increases. When the Fed then cut by 1.75 points, the average CD fell 0.27 points by December 2025.
5. Savings accounts lag even more. The average savings account paid 0.37%, less than a tenth of the 3.91% yield on a 3-month Treasury bill.

The Fed just raised rates. Will CD rates follow?

The Federal Reserve's new target range of 3.75%–4.00% took effect on September 17, 2026, a 0.25-point increase and the first since July 2023. The FDIC figures in this edition reflect rates on August 31, 2026, before the move.

History suggests savers at the average bank shouldn't expect much. During the last hiking cycle, the average 12-month CD captured about 33 cents of every dollar of Fed increases. At that pace, this 0.25-point increase would lift the average 12-month CD by roughly 0.08 points: about $8 a year on a $10,000 deposit.

Treasury yields have already moved. The 1-year Treasury yielded 4.45% on September 21, 2026, compared with 4.16% on August 31, 2026.

Next update: the FDIC's next national rates are expected on October 19, 2026. They will be the first to show whether banks raised CD rates after the Fed's move, and this report will be updated the same week.

What this means for savers

• Treat the average as a floor, not a target. CD rates vary widely from one institution to the next. The Treasury yield for the same term, in the table above, is a useful yardstick for any offer.
• Taxes widen the gap for many savers. Interest on Treasury bills and notes is exempt from state and local income taxes; CD interest is not.
• Know the trade-offs. CDs at FDIC-insured banks are protected up to $250,000 per depositor, per bank, per ownership category, and cashing out early usually costs a penalty. Treasuries are backed by the U.S. government and can be bought at TreasuryDirect or through a brokerage; if you sell before maturity, the price can be lower than what you paid.
• Longer isn't automatically better. At the average bank, a longer CD doesn't pay a higher rate. Compare each term on its own.

To see what a specific rate earns on your deposit, use the CD calculator, or go straight to a term: 3-month, 6-month, 1-year, 5-year, jumbo or IRA CD.

Methodology

CD and savings rates. FDIC national rates for deposits under $100,000, published monthly in the FDIC's National Rates and Rate Caps. Since April 2021 the national rate has been the average of rates paid by all insured depository institutions and credit unions with available data, weighted by each institution's share of domestic deposits. Each release reflects rates on the last business day of the previous month: this edition, published in September 2026, reflects rates on August 31, 2026.

Treasury benchmark. Daily constant-maturity yields from the Federal Reserve's H.15 release, taken on the same date as the FDIC data and matched by term: 3- and 6-month bills, and 1-, 2-, 3- and 5-year notes. There is no 4-year Treasury, so the 48-month benchmark is the average of the 3- and 5-year yields.

Calculations. The gap is the Treasury yield minus the average CD rate, in percentage points. "Cents per $1" is the CD rate divided by the Treasury yield. Dollar amounts assume $10,000 held for the full term, with both rates compounded once a year. Treasury yields are quoted on a semiannual (bond-equivalent) basis, so this simplification slightly understates Treasury earnings and the gap.

Inflation. The year-over-year change in the Consumer Price Index for All Urban Consumers (CPI-U, not seasonally adjusted) for the month of the FDIC data. FRED has no CPI value for October 2025, so that month is left out of the inflation comparison.

Pass-through of Fed moves. The change in the average 12-month CD rate divided by the change in the upper bound of the federal funds target range: from February 28, 2022, before the first increase of the 2022–23 cycle, to the CD rate's peak on August 30, 2024, and from that peak to December 31, 2025, after the last cut of the 2024–25 cycle.

Sources. All series were retrieved from FRED, Federal Reserve Bank of St. Louis:

• FDIC National Rates and Rate Caps (via FRED): NDR3MCD, NDR6MCD, NDR12MCD, NDR24MCD, NDR36MCD, NDR48MCD, NDR60MCD
• Treasury constant-maturity yields, Federal Reserve H.15 (via FRED): DGS3MO, DGS6MO, DGS1, DGS2, DGS3, DGS5
• Consumer Price Index for All Urban Consumers, BLS (via FRED): CPIAUCNS
• Federal funds target range, Federal Reserve (via FRED): DFEDTARL, DFEDTARU

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The figures and charts on this page may be republished with a credit to MortgageRatePro and a link to this page (CC BY 4.0).

• Rates and gap by CD term (CSV)
• Monthly history since Feb 2021 (CSV)
• Chart, gap over time: PNG · SVG
• Chart, gap by term: PNG · SVG

Suggested citation

MortgageRatePro, “CD Rate Gap Report,” September 2026 edition, https://www.mortgageratepro.com/research/cd-rate-gap/