While there are no guarantees concerning how interest rates will move in the coming months, here are two predictions for CD rates moving into 2024. When the federal funds rate rises, interest rates normally rise on mortgages, credit cards, CDs and other loan and deposit products. The federal funds rate is what banks charge each other for overnight loans, and changes in the rate affect borrowing costs for various financial products. At the September and November 2023 meetings, however, the FOMC decided to maintain the current rate range.

Following that meeting, Fed Chairman Jerome Powell suggested that rates could rise again before the end of 2023. The FOMC met again in June and neither raised nor lowered rates during that meeting, but the committee raised rates by another quarter of a point in July. This was followed by subsequent rate hikes in March and May, bringing the range to between 5.00% and 5.25%. The Federal Reserve approved its first rate hike of 2023 in February, raising the target federal funds rate to between 4.50% and 4.75%. In 2022, the Fed boosted its benchmark federal funds rate seven times, taking it from near 0% to a range of between 4.25% and 4.50% in an effort to curb inflation. How various interest rates-including those on CDs-move during the coming months will depend greatly on what the Federal Reserve does. So, while mortgage rates have been soaring, CD rates are only inching up. When Will CD Rates Go Up?īanks typically move much more quickly to charge higher interest rates on loans and credit than they do to pay higher interest on savings. Some banks have raised rates during this period of uncertainty to incentivize existing customers and attract new ones. The good news is that your bank deposits are FDIC-insured up to $250,000 per depositor, per account ownership type and per financial institution. Recent bank failures have many consumers worried about whether funds kept in CDs are as safe as claimed. As the federal funds rate increases, you can expect CD rates at many banks to follow suit. In both September and November FOMC meetings, however, the Fed decided to maintain the current target range for the federal funds rate while actively monitoring inflation to determine whether another rate increase might be needed.īanks generally use the federal funds rate as a guide when setting rates on savings and lending products. In July 2023, the Federal Open Market Committee (FOMC) again raised the federal funds rate, this time to a range spanning from 5.25% to 5.50%.

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