Interest rates move every business day, and the rate you see today won't be the same tomorrow

The interest rate you get on a savings account, money market account, or CD is not fixed by the government or any single authority. Banks set their own rates based on what the Federal Reserve does, what other banks are offering, and how much money they need to attract right now. This means the rate advertised on Monday might be lower on Wednesday, and a rate you saw last week is almost certainly different today.

The Federal Reserve does set a target range for the federal funds rate — the rate banks charge each other for overnight loans. When the Fed raises or lowers that range, banks typically adjust the rates they offer to customers within days or weeks. But the Fed does not set your savings account rate directly. Your bank decides how much of that Fed rate increase (or decrease) to pass along to you, and how much to keep.

This is why you cannot rely on a rate you read yesterday. If you are comparing accounts or deciding whether to open a CD, you need to check the current rate at the bank you are considering, not a rate from an article or email from last month.

Key Takeaways

  • Banks change savings and CD rates almost daily based on Federal Reserve decisions and competition with other banks.
  • The Federal Reserve sets a target range for the federal funds rate, but individual banks decide what rate to offer you.
  • You must check the current rate directly with your bank on the day you plan to open an account, because rates posted online can change within hours.
  • Different account types at the same bank often have different rates, and online banks typically offer higher rates than brick-and-mortar branches.
  • Rates on savings accounts and money market accounts can change after you open them, but CD rates are locked in for the full term.

Where to find the rate your bank is offering right now

The most reliable place to check is your bank's website, in the section labeled "Rates" or "Savings Rates" or sometimes "Products." Look for the specific account type you are interested in — savings account, money market account, or certificate of deposit — because the same bank will offer different rates for each one.

If you bank in person at a branch, the rate posted in the window or on a printed sheet may be outdated. Call the branch or log into your online account to see the current rate. Many banks also show the rate when you start the account-opening process online, before you commit to anything.

If you are comparing banks, websites like Bankrate, DepositAccounts, and the FDIC's National Information Center let you see rates from multiple banks side by side. These sites update their data regularly, but they are still a snapshot from when they last checked — not a live feed. Always verify the rate on the bank's own website before you open an account.

Why the same bank offers different rates for different accounts

A savings account, a money market account, and a CD are three different products with three different purposes, so banks price them differently. A savings account lets you withdraw money whenever you want, which means the bank cannot count on having your money for any set period. A CD locks your money in for a specific term — three months, one year, five years — so the bank knows exactly how long it can use that money. Because the bank has more certainty with a CD, it usually pays a higher rate on a CD than on a savings account.

A money market account sits between the two. It typically pays more than a savings account but less than a CD, and it usually requires a higher opening balance. The exact difference varies by bank and by how much money you deposit.

Online banks — banks with no physical branches — often offer higher rates across all three account types than traditional banks do. They have lower overhead costs, so they can afford to pay you more. If you do not need to walk into a branch, an online bank is usually worth checking.

What happens to your rate after you open the account

For a savings account or money market account, your rate can change at any time after you open it. The bank does not have to notify you in advance, though most banks do send an email or letter when they change rates. Your rate might go up (usually when the Fed raises rates and banks compete for deposits) or down (usually when the Fed cuts rates or banks need less money). You cannot lock in a rate on these accounts — that is the trade-off for being able to withdraw your money whenever you want.

For a CD, your rate is locked in for the entire term. If you open a one-year CD at 4.5 percent, you will earn 4.5 percent for that full year, no matter what happens to rates in the market. This is the main reason people choose CDs — the certainty. The downside is that if rates go up after you buy the CD, you cannot move your money to a higher-paying account without paying an early withdrawal penalty.

How the Federal Reserve's decisions affect the rates you see

The Federal Reserve meets eight times a year to decide whether to raise, lower, or hold steady the federal funds rate. When the Fed raises rates, banks usually raise the rates they offer on savings accounts and CDs within a few days or weeks. When the Fed cuts rates, banks usually cut the rates they offer to customers, though sometimes they cut deposit rates faster than they cut loan rates.

You can find out when the Fed meets and what decision it made by visiting the Federal Reserve's website. Major financial news outlets also cover Fed decisions on the day they happen. If you are watching rates and waiting for the right time to lock in a CD, knowing the Fed's schedule can help you understand whether rates are likely to move soon.

However, banks do not always move in lockstep with the Fed. One bank might raise its savings rate by 0.25 percent after a Fed increase, while another raises it by 0.10 percent or does not raise it at all. This is why shopping around matters — different banks respond differently to the same Fed decision.

The difference between APY and interest rate

When you look at a rate, you will see two numbers: the interest rate and the APY, which stands for annual percentage yield. The interest rate is the basic percentage the bank pays you. The APY includes the effect of compounding — the way interest earned gets added to your balance and then earns interest itself.

For example, if a savings account has a 4.0 percent interest rate and compounds daily, the APY might be 4.08 percent. The difference is small, but it adds up over time. Always compare APY to APY when you are looking at different banks, not interest rate to APY. Banks are required to show you the APY prominently, so it should be easy to find.

Why rates today are not the same as rates last month

Interest rates move because the Federal Reserve changes its target rate, because banks compete with each other for deposits, and because economic conditions change. When inflation is high, the Fed typically raises rates to cool down the economy. When the economy slows down, the Fed typically cuts rates to encourage borrowing and spending. Banks watch these moves and adjust what they offer you.

Banks also watch each other. If one bank raises its savings rate to attract more deposits, competitors often follow. If a bank needs less money because loan demand is down, it might lower its rate. All of this happens continuously, which is why the rate you see on a Tuesday is different from the rate on a Friday.

This constant movement is normal and expected. It does not mean you made a mistake by opening an account last month at a lower rate — it means the market is working. If you want to take advantage of higher rates, you can always open another account at a different bank or move money to a higher-paying CD when your current one matures.

Frequently Asked Questions

Is there a best time to lock in a CD rate?

There is no way to predict exactly when rates will peak, but you can watch the Federal Reserve's meeting schedule and financial news to get a sense of whether rates are likely to rise or fall soon. If the Fed has been raising rates and signals it might stop, that is often a good time to lock in a CD. If the Fed is cutting rates, waiting usually means lower rates ahead.

Why do online banks pay more than my local bank?

Online banks have no physical branches, so they spend less money on buildings, staff, and overhead. They pass some of those savings to customers in the form of higher interest rates. If you are comfortable banking online and do not need to visit a branch, an online bank is usually worth considering.

Can I move my money to a higher-paying account if rates go up after I open my account?

Yes, but it depends on the account type. For a savings account or money market account, you can withdraw your money and move it to another bank's higher-paying account anytime. For a CD, you can withdraw early, but most banks charge an early withdrawal penalty that eats into your earnings. Wait until the CD matures to move the money without a penalty.

How often do banks update the rates they show online?

Banks update their rates at different times — some daily, some weekly, some whenever they decide to change. The safest approach is to check the rate on the bank's website the same day you plan to open the account, because online rates can change within hours.

What does it mean if a bank's rate is much higher than everyone else's?

It usually means the bank is trying to attract deposits quickly, perhaps because it is new or because it needs cash for lending. Higher rates are real and legitimate, but always verify the rate on the bank's official website and check that the bank is FDIC-insured before you deposit money.