As the financial world looks toward 2026, one burning question is on the minds of savers and investors alike: will certificate of deposit (CD) rates go up? A recent analysis from Forbes suggests that the answer is far from certain, with a mix of economic signals pointing in different directions. Here's a closer look at what could be in store for CD yields in the coming year.

Current Rate Environment: A Shifting Landscape

The trajectory of CD rates is closely tied to the Federal Reserve's monetary policy. Over the past couple of years, the central bank has engaged in a series of rate hikes to combat inflation, which has pushed CD yields to their highest levels in over a decade. However, as inflation shows signs of cooling, the Fed has signaled a potential pause or even a pivot to rate cuts, which would directly impact the interest rates offered on new CDs.

According to Forbes, the current average one-year CD rate hovers around 2.5%, while high-yield online accounts can offer up to 5.5% or more. This wide disparity highlights the importance of shopping around, but the bigger question is whether these rates will climb higher or start to decline as we move through 2026.

What Drives CD Rate Movements?

  • Federal Reserve Policy: The most significant driver—when the Fed raises its benchmark rate, banks typically pass on the increase to CD customers.
  • Inflation Expectations: If inflation remains sticky, the Fed may keep rates higher for longer, supporting elevated CD yields.
  • Economic Growth: A robust economy often leads to higher rates, while a slowdown could prompt cuts.

Predictions for 2026: The Bull and Bear Cases

Forecasting CD rates is never a precise science, but analysts point to several scenarios. The bull case for higher rates relies on the possibility that inflation proves more persistent than expected, forcing the Fed to maintain a restrictive stance. In this scenario, CD rates could remain at their current peaks or even inch upward, especially if banks compete for deposits to shore up their balance sheets.

On the flip side, the bear case suggests that as the economy cools and inflation normalizes, the Fed will begin cutting rates as early as late 2025 or early 2026. If that happens, CD rates would likely follow suit, with new issues offering lower yields. Existing CD holders who locked in longer terms would benefit, but those rolling over maturing CDs might face a letdown.

Expert Takes from Forbes

Forbes' analysis notes that "the peak for CD rates may already be behind us," citing market expectations for rate cuts. However, they also caution that "a resilient job market and consumer spending could delay the Fed's hand," keeping rates elevated longer than anticipated.

How to Position Your Savings for 2026

Given the uncertainty, financial advisors recommend a strategic approach to CDs. One popular tactic is laddering, which involves splitting your money across multiple CDs with staggered maturity dates. This method allows you to take advantage of current high rates while maintaining flexibility to reinvest at potentially higher rates later.

Another consideration is whether to lock in a long-term CD now or wait. If you believe rates will rise, a shorter-term CD gives you the chance to renegotiate sooner. Conversely, if you think rates will fall, grabbing a 12- or 18-month CD at today's rates could lock in a solid return.

  • Compare online banks: They often offer higher yields than traditional brick-and-mortar institutions.
  • Watch for special promotions: Some banks launch limited-time offers that beat the market average.
  • Read the fine print: Early withdrawal penalties can eat into your earnings if you need access to funds.

Key Takeaways

While no one can predict the future with certainty, the consensus among experts is that CD rates are unlikely to see a dramatic surge in 2026. The most probable outcome is a gradual decline if the Fed follows through on cutting rates, though a persistent inflation spike could keep yields higher for longer. For savers, the best defense is a diversified savings strategy that doesn't rely solely on CDs.

Stay informed, compare offers, and consider locking in rates if you find a deal that meets your needs. As always, consult with a financial advisor to tailor these insights to your personal situation.