CD Rates Slip in 2026 After Stronger Yields Last April

A $10,000 one-year CD still does not produce much cash, even after a year of rate shifts. At the national average 1.9% APY, that deposit now earns about $190 over 12 months, only $13 more than the $177 it would have earned a year earlier at the FDIC’s 1.77% average for a 12-month CD. That small gap is the clearest sign that ordinary savers are no longer seeing the kind of broad CD payoff that was available when higher promotional yields were still common.

The rate backdrop has softened. The Federal Reserve’s effective federal funds rate was 3.64% on April 14, 2026, and that lower policy setting has filtered through bank pricing. Bankrate put the average 3-year CD at 1.64% APY and the average 5-year CD at 1.69% APY on April 11, 2026, while NerdWallet said the best available standard-term CDs were around 4% and had kept drifting lower after late-2025 Fed cuts. A year earlier, the FDIC’s 12-month CD rate cap was 5.59%, and Fortune said some best CD offers were as high as 4.50% APY, showing how much more room banks had to compete for deposits last spring.

That still leaves alternatives worth weighing. Bankrate’s top high-yield savings account was paying 4.21% APY, which would generate about $421 on $10,000 in a year, more than double the average 1-year CD return. The Treasury market also offered a stronger starting point, with the Federal Reserve’s H.15 data showing a 1-year Treasury constant maturity yield of 3.71% and a 3-month yield of 3.69% on April 14. Treasury interest is taxable federally but exempt from state and local taxes, while the IRS says bank accounts, money market accounts and CDs are taxable interest income, so the after-tax comparison often favors Treasuries over bank CDs for savers in high-tax states.

Inflation is the tougher hurdle. The Bureau of Labor Statistics said consumer prices were up 3.3% over the year in March 2026, meaning a $10,000 CD earning $190 before tax still fell short of the $330 increase in prices needed just to keep pace with inflation. After taxes, the real return is even thinner. CDs still offer certainty and FDIC insurance, but with average yields near 2% and better-paying cash alternatives still available, they make the most sense now as a parking place for money that needs safety more than growth.