What Savers Should Expect From CD Rates in August

Certificate of deposit rates should hold close to their current levels in August, with the best offers still paying 4% or more, according to analysts who track the market. The consensus behind that forecast is the Federal Reserve: traders see roughly a 64% chance the central bank leaves interest rates unchanged at its July 28-29 policy meeting, which would keep CD yields on a steady footing.

That does not rule out movement. Some forecasters expect a modest rise, especially on longer maturities. Alastair Wood, chief executive of the financial technology marketplace Raisin U.S., says CD rates are likely to keep increasing gently as they did in July, with longer-term CDs gaining more than short-term ones. Wood also points to geopolitical risk, arguing that the escalation of the conflict with Iran, including attacks by Iranian-aligned proxies in the Red Sea, is pushing oil prices up and could feed into inflation and interest-rate expectations.

For savers, the practical picture is still favourable. The national average 12-month CD pays just 1.68% APY, according to WalletHub analyst Chip Lupo, but many online banks and credit unions continue to offer 4% or more on comparable terms. CD Valet data cited by its chief financial officer, Bryan Johnson, shows 2,305 CD rates paying at least 4.00% APY as of the week of July 20, with only 193 cut. Because the Fed is widely expected to stay on hold in late July, and markets price only one rate hike before the end of 2026, experts say August is a reasonable window to lock in today's guaranteed yields rather than wait for a better deal.

Why August Looks Stable: The Fed, Oil Prices and Online Banks

The August outlook for CD rates comes down to three forces: the Fed's next move, oil prices and competition among online banks. Each points to a different part of the rate landscape, and together they explain why the best offers remain well above the national average.

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Why the Fed's July Meeting Anchors the Forecast

According to CME FedWatch data cited by Lupo, traders put about a 64% probability on the Fed holding rates at its late-July meeting. The Fed has kept rates steady through 2026, and CD rates have moved only gradually during that period. With futures markets also pointing to a single hike before the year ends, the most likely scenario is a quiet August, with any upward drift concentrated in longer maturities rather than across the whole curve.

Iran and Oil Are the Wildcards

Wood warns that the escalation of the conflict with Iran since the ceasefire was announced, and the widening of tensions to the Red Sea, are already lifting oil prices, which feeds directly into inflation expectations and therefore into interest-rate expectations. If that pressure persists, the Fed could be more inclined to raise rates later in 2026, which would eventually push CD yields higher. The important nuance: a rate hike is not imminent, and the effect on August CD pricing is likely to be indirect — visible in slightly firmer longer-term yields rather than a broad jump.

Online Banks Are Keeping the 4% Offers Alive

The gap between the national average and the best online offers is striking. Lupo puts the average 12-month CD at 1.68% APY while the strongest banks and credit unions pay 4% to 4.5%. CD Valet data reinforces that: more than 2,300 products still yield at least 4.00%. Wood adds that the spread between the 2-year Treasury yield and the effective federal funds rate is the widest in years, which means 2-year CDs can pay around half a percentage point more than high-yield savings accounts — and that rate is locked for the full term, unlike variable savings yields.

How to Lock In a 4% CD Rate This August

  • Shop online banks and credit unions before local branches: the national average 12-month CD pays 1.68% APY, while online competitors still offer 4% or more on similar terms — a gap that analysts describe as a huge difference in potential earnings.
  • Lock in a rate if a 4% to 4.5% APY meets your savings goal. With 2,305 CDs still paying at least 4.00% APY as of the week of July 20, attractive offers are widely available, and a fixed CD protects your return even if banks cut yields later.
  • Consider a 2-year term if you can spare the money: the spread between 2-year Treasury yields and the effective federal funds rate is the widest in years, potentially about 0.5 percentage points more than a high-yield savings account — with the rate guaranteed to maturity.
  • Only commit money you won't need before maturity, because early withdrawals typically forfeit the interest you had planned to earn.
  • Keep an eye on the Fed's July 28-29 decision and oil prices. The market's 64% odds of a hold point to stability, but a further escalation of the Iran conflict could push inflation expectations and, later, CD rates higher.