Interest rates change almost every business day, but the size of the move matters more than the move itself
Interest rates do not drop or rise on a fixed schedule. The Federal Reserve sets its target rate eight times a year at scheduled meetings, but market interest rates—the ones that affect your mortgage, savings account, and credit card—move constantly based on what traders expect the Fed to do, what inflation is doing, and what's happening in the broader economy. A "drop today" might be 0.25 percentage points or 0.01 percentage points, and the difference between those two is enormous for your wallet.
To know whether rates actually dropped today, you need to know which rate you're tracking. The federal funds rate (what the Fed controls directly) only changes at scheduled meetings. The prime rate (what banks charge their best customers) follows the federal funds rate within hours of a Fed decision. Mortgage rates, savings account rates, and CD rates move on their own schedule based on bond market activity and what banks decide to offer. A mortgage rate can drop while the Fed rate stays flat, or stay flat while the Fed rate rises.
Key Takeaways
- The Federal Reserve sets its target rate eight times per year; market rates like mortgages and savings rates move daily based on trader expectations and economic data.
- A 0.25 percentage point drop saves you roughly $60 per month on a $300,000 mortgage, while a 0.01 point drop saves you about $2.40.
- Mortgage rates, savings rates, and CD rates are set by individual banks and move independently of the federal funds rate.
- Checking your own bank's rates directly is faster and more accurate than reading about national averages, because your bank may lag behind or lead the market.
Where to find what actually dropped today
The federal funds rate itself only moves when the Federal Reserve meets. You can see the Fed's target range on the Federal Reserve's website under "Monetary Policy"—it updates only after a scheduled decision. If the Fed did not meet today, the federal funds rate did not change.
The prime rate (the Wall Street Journal Prime Rate) moves within hours of a Fed decision and is published daily in the Journal. Most banks tie their credit card rates and home equity lines of credit to the prime rate, so if the prime rate dropped, your variable-rate credit card APR will drop within one or two billing cycles.
Mortgage rates, savings account rates, and certificate of deposit (CD) rates are set by each bank individually. Check your own bank's website or call their mortgage department directly—do not rely on national averages, because your bank may be offering something different. Bankrate, NerdWallet, and DepositAccounts publish daily rate surveys, but these are averages across hundreds of banks, not what your bank is actually offering you right now.
What a rate drop actually costs or saves you
The size of the drop determines whether it matters to your finances. On a $300,000 mortgage at 30 years, a 0.25 percentage point drop (from 7.00% to 6.75%, for example) saves you roughly $60 per month. A 0.01 percentage point drop saves you about $2.40 per month. If you see a headline saying rates dropped today, check the actual number before deciding whether to refinance or move your savings.
On a savings account or CD, the math is simpler. A $10,000 balance earning 4.50% annual interest earns $450 per year. If the rate drops to 4.25%, you earn $425 per year—a $25 annual loss. For most people, a 0.25 point drop on savings is not worth switching banks, but a 0.50 point drop might be.
For credit cards and home equity lines of credit tied to the prime rate, a drop affects your balance immediately if you carry a balance. A 0.25 point drop on a $5,000 credit card balance at 21% APR saves you roughly $10 per month in interest charges. If you pay your balance in full each month, rate drops do not affect you.
Why your bank's rate might not match the headline
National news outlets report on the federal funds rate and the prime rate because those are official numbers. Your bank's mortgage rate, savings rate, or CD rate is a separate decision. Banks may lag behind the market by days or weeks, or they may move faster than competitors. A bank that is trying to attract new mortgage customers might drop rates immediately; a bank that is full of mortgage business might hold rates steady or raise them.
This is why checking your own bank's website is always faster than reading a news article. If you see a headline that rates dropped, log into your bank's website and look at the actual rate they are quoting you. That is the only number that matters for your decision.
When a small rate drop is worth acting on
A 0.25 percentage point drop on a mortgage is worth refinancing if you plan to stay in the home for at least two more years and refinancing costs less than $3,000 to $5,000. Call your lender and ask for a no-cost refinance quote—some lenders will roll the closing costs into the loan, which means you do not pay upfront but your rate will be slightly higher.
For savings accounts and CDs, a 0.25 point drop is worth moving your money only if you have a large balance (over $25,000) and another bank is offering a meaningfully higher rate (at least 0.50 points higher). The time it takes to open a new account and move the money is usually not worth it for smaller amounts.
For credit cards, a rate drop does not help you unless you carry a balance. If you do carry a balance, the drop will show up on your next statement automatically—you do not need to do anything.
How to track rates without checking the news every day
Set a calendar reminder to check your bank's rates once a month instead of chasing daily headlines. Most people do not need to know about every 0.01 point move; they need to know when a meaningful shift (0.25 points or more) has happened and whether it affects their situation.
If you are shopping for a mortgage or CD, get rate quotes from three to five lenders and compare the full picture: the interest rate, the APY (annual percentage yield, which includes compounding), and any fees. A 0.10 point difference in rate is often less important than a $500 difference in closing costs or a higher APY from daily compounding.
For savings accounts, set a reminder to check rates every six months. Banks change savings rates frequently, and you may find a competitor offering 0.50 points or more higher than your current bank. That is worth moving for.
Frequently Asked Questions
Did the Federal Reserve meet today?
The Federal Reserve meets eight times per year on a published schedule. You can see the meeting dates on the Federal Reserve's website. If today is not a meeting date, the federal funds rate did not change. If the Fed did meet today, the announcement comes at 2 p.m. Eastern Time, and the new rate takes effect the next business day.
Why did my mortgage rate drop but my savings rate didn't?
Mortgage rates and savings rates are set independently by banks based on different market pressures. Banks may lower mortgage rates to attract borrowers while keeping savings rates flat because they have enough deposits. Check your bank's website to see what they are currently offering on both products.
If rates dropped, should I refinance my mortgage immediately?
Not necessarily. A 0.10 or 0.15 point drop is usually too small to justify refinancing costs. Wait until you see a 0.25 point drop or larger, and then get a no-cost quote from your lender to see whether refinancing makes sense for your situation and timeline.
How long does it take for my bank to lower my credit card rate after the Fed drops rates?
Variable-rate credit cards tied to the prime rate typically adjust within one or two billing cycles after the prime rate changes. Fixed-rate cards do not change when the Fed moves. Check your card's terms to see whether your APR is variable or fixed.
Where can I see historical interest rates to compare?
The Federal Reserve publishes historical federal funds rates on its website. Bankrate and the Mortgage Bankers Association publish historical mortgage rates. For savings rates, DepositAccounts maintains a historical database. These help you see whether today's rates are high or low compared to recent months.