What’s Happening with Interest Rates on Bank Accounts? : Survey Data From Large Lenders

Why It Matters

The inversion highlights depositor uncertainty and pressures banks to balance liquidity with competitive pricing, while the enriched data set gives analysts a clearer view of retail deposit trends amid shifting monetary policy.

Key Takeaways

• 1‑year CD yields topped 5‑year CDs since Oct 2022
• Savings and checking rates remain well below CD rates
• Inversion signals depositor uncertainty about future interest rates
• FRED added 15 new Bankrate series covering deposits and credit
• Data derive from the ten largest U.S. banks across ten markets

Pulse Analysis

The latest FRED release shines a light on an unusual shift in retail deposit pricing: a sustained inversion where short‑term certificates of deposit (CDs) out‑yield their longer‑term counterparts. Historically, investors demand higher rates for longer commitments to compensate for time risk, but since October 2022 the average 1‑year CD APY has eclipsed the 5‑year CD APY. This pattern mirrors broader yield‑curve distortions in bond markets, reflecting heightened uncertainty about future Federal Reserve policy and inflation trajectories.

For consumers, the inversion offers a tactical advantage for those seeking higher returns without locking funds for five years, yet it also underscores the trade‑off between rate attractiveness and liquidity. Savings and checking accounts remain at the low end of the rate spectrum, reinforcing the traditional hierarchy where easy‑access accounts sacrifice yield. Banks, meanwhile, must manage the tension between offering competitive short‑term rates to attract deposits and preserving cost‑effective funding for longer‑term lending.

Analysts benefit from FRED’s expanded dataset, which now includes 15 new Bankrate series covering not only deposits but also credit cards, auto loans and mortgages. By aggregating weekly surveys from the nation’s largest banks, the platform provides a granular, real‑time pulse on consumer‑credit pricing. This depth enables more accurate forecasting of funding costs, informs monetary‑policy impact assessments, and supports strategic decisions for both financial institutions and investors navigating an evolving rate environment.