Federal Reserve rate policy and the outlook for yields on savings are looking uncertain as the second half of the year kicks off – but there are still a few places that pay compelling levels of interest on cash. Investors started 2026 with an optimistic outlook for rate cuts, but six months into the year, the chances of a rate hike appear more likely as the economy grapples with sticky inflation. May’s reading of the personal consumption expenditures price index came in at an annual rate of 4.1%, the highest since April 2023. Fed funds futures trading also suggests a nearly 67% probability of a rate hike in September, according to the CME Group FedWatch tool . Accordingly, banks have been fine-tuning the rates they offer on deposits, with some trimming back the interest they pay on high-yield savings accounts, while others boost what they’ll pay for certificates of deposit. “Banks continue to increase rates offered on 1Y CDs amid the higher-for-longer rate backdrop,” wrote Bank of America analyst Brandon Berman in a June 25 report. “The average 1Y CD [annual percentage yield] QTD is up 19 bp QTD, with new money rates ~35 bp higher than group average.” Banks’ move to cut rates on savings accounts while lifting them for CDs may also suggest banks are managing dueling priorities. “We wonder if this represents two cross currents, of the lack of near term need for deposits (which indicates slower than expected loan growth) but the expectation for more deposit rate competition in a year’s time as the Fed Funds Rate increases,” wrote BTIG analyst Vincent Caintic in a June 18 report. Locking in 4% or better for a year For investors who might have a short-term goal and are comfortable with locking up some of their savings in a CD for a year, there are a few banks offering annual percentage yields upward of 4%. Be aware that “breaking” a CD by cashing it in too early usually means you’ll pay a penalty fee. As of Tuesday, Bread Financial offers a 4% yield on a 1-year CD, as does Citi . Popular Direct is paying 4.15% on the same maturity. Investors who are comfortable with taking a slightly shorter or longer maturity may also find compelling yields. Synchrony pays an APY of 4% on 13-month instruments , while Happen Bank – formerly known as Lending Club – touts a 4.15% yield on an 11-month CD and 4% on a 14-month maturity.
Find 4% CD yields as Fed policy remains murky
