Overview of Historical CD Interest Rates from 1984 to 2026

Stephen Kates, a financial analyst at Bankrate, stated that savers can benefit from relatively high yields on CDs and savings accounts despite recent Federal Reserve rate cuts in 2024 and 2025. He emphasized that rising inflation poses a considerable risk, suggesting that it may be time for savers to switch to higher-yield products.

Historically, CDs were attractive investments with average annual percentage yields (APY) exceeding 11% in the early 1980s. However, following the 2009 financial crisis, average rates on shorter-term CDs fell below 1% APY and remained low following the COVID-19 pandemic.

In early 2022, CD rates began to rise again due to Federal Reserve rate increases, reaching their highest point in late 2023 before declining again as the Fed reduced its benchmark rate in subsequent years.

As of September 26, 2026, the average one-year CD yield is 2.08%, with some banks offering rates up to 4.10%.

CD rates in the 1980s were at an all-time high, with three-month CDs yielding about 18.3% APY in May 1981 amid rampant inflation. The economic conditions of that decade impacted CD rates significantly.

The 1990s saw a decline in CD rates as inflation stabilized and economic conditions improved following a brief recession.

During the early 2000s, CD rates plummeted as interest rates were reduced to stimulate the economy after the dot-com bubble burst. Average yields fell below 2% APY by 2002, and by September 2009 they dropped below 1% APY following the global financial crisis.

From 2010 to 2019, CD rates hit historical lows, partially due to the Federal Reserve's strategies to support the economy post-recession. By June 2013, average yields on one-year and five-year CDs were at 0.24% APY and 0.77% APY, respectively.

The emergence of the COVID-19 pandemic in 2020 prompted the Fed to cut rates to near-zero, further driving down CD yields. By June 2021, the average one-year CD yield had dropped to 0.17% APY due to the pandemic's economic impact.

However, from 2022 to 2023, average CD rates increased significantly as the Fed raised rates 11 times within those two years. By September 2023, one-year CDs averaged 1.92% APY.

Currently, CD rates have decreased since their peak in late 2023 due to multiple rate cuts by the Fed throughout 2024 and 2025. Despite this, some high-yield savings accounts and competitive CDs still exceed inflation rates as of March 2026.

Current Bankrate data from May 9, 2026, indicates that the national average one-year CD yield is 1.96% APY, and the five-year CD yield is 1.70% APY.

Looking ahead, rates are expected to remain stable for the remainder of 2026. Kates noted that the rate-cutting cycle may be paused indefinitely, which could protect savers from falling yields, but cautioned that persistent inflation could erode gains for most savings products.

The APYs of CDs typically respond to changes in the Federal Reserve’s federal funds rate, serving as a benchmark for banking costs. Economic conditions also influence CD yields; a recession can lead to reductions in rates following Fed rate hikes.

In summary, CDs continue to be a worthwhile investment option in 2026, with competitive APYs still outpacing inflation despite recent rate cuts by the Fed. To maximize returns, savers should compare different CD options and select the best rates based on their needs.