Federal reserve rate decision: Benchmark lifted to 3.75%–4.00% target range
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What did the Federal Reserve decide at its September 16, 2026 meeting?
On September 16, 2026, the Federal Open Market Committee (FOMC) voted unanimously (12–0) to increase the target range for the federal funds rate by 25 basis points to 3.75%–4.00%. The policy shift comes as recent inflation data remained elevated above the central bank’s 2% long-term target. Commercial banks and online financial institutions are expected to adjust retail deposit APYs across high-yield savings accounts (HYSAs) and short-term certificates of deposit (CDs) in response.
Key takeaways
The target range for the federal funds rate moves up to 3.75%–4.00%.
Variable high-yield savings account rates typically track benchmark increases upward within 1 to 2 weeks as banks compete to attract deposits.
Today's rate decision sets a fresh floor for short- and mid-term CD rates. Locking in fixed yields allows savers to capture competitive APYs before future policy adjustments.
The FOMC statement breakdown
In an official statement released at 2:00 p.m. ET, the Federal Open Market Committee noted that domestic economic activity continues to expand at a solid pace because people and businesses are still spending steadily.. However, persistent pressure in energy and consumer price measures prompted the 12–0 vote to adjust policy rates higher.
Previous target range | New target range |
3.50% – 3.75% | 3.75% – 4.00% (Effective Sept. 17, 2026) |
The Committee reiterated its commitment to returning inflation to its 2% objective, signaling that monetary policy decisions will remain data-dependent entering the final quarter of the year.
What the September decision means for your cash strategy
When the Federal Reserve raises its rates, banks usually follow suit and pay you more for your savings. But this doesn't happen instantly; each bank gets to decide how quickly they pass those higher rates on to you.
High-yield savings accounts (variable APYs): Because HYSAs feature variable interest rates, top-tier online banks typically adjust their advertised yields upward following a central bank rate increase. Savers with idle checking or traditional savings cash earning the national average (0.38%, as of August 2026) stand to gain by moving funds into competitive liquid accounts.
Certificates of deposit (fixed APYs): Unlike variable accounts, CDs lock in your annual percentage yield for the entire term — whether 3 months, 1 year, or 5 years. Following today's benchmark move, banks adjust fixed CD yields to align with market borrowing costs. Locking in a fixed CD rate today allows savers to hold that yield regardless of economic shifts in 2027.
Options for cash positioning
Product type | Rate type | Many savers use for |
High-yield savings | Variable | Emergency cash, short-term spending, and liquid buffers |
Short-term CDs (3–6 mo.) | Fixed | Capturing immediate competitive yields while maintaining quarterly liquidity |
Long-term CDs (1–3 yr.) | Fixed | Locking in competitive multi-year returns against potential long-term rate declines |
No-penalty CDs | Fixed + flexible | Capturing today's yield with flexibility for early withdrawal |
Boost your savings with Raisin
Navigating interest rate shifts shouldn't require managing multiple accounts across different institutions. With one single login at raisin.com, you can browse, open, and manage competitive high-yield savings accounts and fixed CDs from a nationwide network of partner institutions eligible for FDIC or NCUA insurance, up to $250,000 per depositor, per institution, subject to certain conditions — with zero hidden fees.
Exploring the Raisin newsroom
Interest rate decisions, inflation data, and deposit market dynamics change rapidly. Savers can check back for updated rate snapshots, macro breakdowns, and educational personal finance guides to help keep cash earning competitive yields.
Frequently asked questions
How fast do bank savings rates change after a Fed meeting?
Online partner banks and credit unions usually update variable HYSA rates and CD offers within 3 to 10 business days following an FOMC rate announcement. Traditional brick-and-mortar institutions often move much slower, maintaining low national averages.
Does a 25-basis-point increase mean CD yields rise by 0.25%?
Not always exactly 0.25%. While benchmark rates set wholesale borrowing costs, individual financial institutions adjust consumer CD yields based on their specific deposit funding needs and market competition.
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
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*APY means Annual Percentage Yield. APY is accurate as of September 16, 2026. Interest rate and APY may change after initial deposit depending on the terms of the specific product selected. Minimum opening deposit is $1.00.
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†Based on $250,000 in FDIC or NCUA insurance coverage per insurable category of ownership at each partner bank or credit union on the Raisin platform (each a "Product Bank"), when aggregated with all other deposits held by you at such Product Bank and in the same insurable category. Deposits made through Raisin will be eligible to receive deposit insurance from the FDIC or the NCUA (each a "Deposit Insurer") in accordance with and up to the maximum amount permitted by law at each Product Bank. Raisin is not a bank or credit union and does not hold any customer funds. Funds are held at FDIC-insured banks and NCUA-insured credit unions. Deposit insurance covers the failure of an insured bank or credit union. Certain conditions must be satisfied for pass through deposit insurance coverage to apply. Customers may choose to deposit funds with identically registered accounts at different Product Banks on the Raisin platform to be eligible for Deposit Insurer coverage up to $10 million for individual accounts and $20 million for joint accounts when at least 40 Product Banks are utilized. Please be aware, however, that any deposits you have at a Product Bank, whether through the Raisin platform or outside the Raisin platform, that you may hold in the same capacity (such as in an individual capacity or joint capacity) count toward the applicable Deposit Insurer's deposit insurance maximum amount, and any such amounts that you hold in the same capacity at a Product Bank that exceed the maximum insurance coverage by the applicable Deposit Insurer will not be insured. For more information on FDIC deposit insurance, please see here. For more information on the NCUA share insurance fund, please see here. You are solely responsible for monitoring the amount of funds you have on deposit at each a Product Bank, whether through the Raisin platform or outside the Raisin platform, to confirm that the deposits you hold in the same capacity at each Product Bank do not exceed the maximum deposit insurance coverage provided by the applicable Deposit Insurer.