The FDIC’s national average rate on 12-month certificates of deposit was 1.73% in September, and its national savings rate was 0.37%, according to the agency’s data as republished by the Federal Reserve Bank of St. Louis. Both readings were last updated on Sept. 21. The savings rate slipped from 0.38%, where it had held from May through August, while the CD rate has climbed for four straight months.
What the FDIC’s “national rate” measures
The figure is not a survey of the best offers. The FDIC defines the national rate as the average of rates paid by all insured depository institutions and credit unions for which data is available, with rates weighted by each institution’s share of domestic deposits. The definition dates from a rule that took effect on April 1, 2021, and it works as a benchmark for limits on institutions that are less than well capitalized. The 12-month CD series shows a monthly reading of 1.73% for September 2026, and the series page was last updated on Sept. 21 at 1:02 p.m. Central time.
Because each institution’s rate is weighted by its share of domestic deposits, larger institutions count for more in the average than small ones. The result is a market-wide baseline rather than the rate any single bank or credit union is advertising. FRED lists both series as monthly, not seasonally adjusted, with September 2026 as the latest observation. The CD series covers 12-month certificates only, so it says nothing about shorter or longer terms.
Savings rates barely moved all year
The FDIC’s national savings rate series stood at 0.37% in September, compared with 0.38% in each month from May through August. Simple arithmetic shows what the level means: a $50,000 savings balance earning 0.37% produces about $185 in interest over a year, before compounding, while the same balance at 1.73% in a 12-month CD produces about $865.
CD rates have crept higher each month since May
The 12-month CD reading was 1.55% in May, 1.65% in June, 1.68% in July, 1.71% in August and 1.73% in September. That is a gain of 0.18 percentage point over four months, and the monthly steps have narrowed, from 0.10 point between May and June to 0.02 point between August and September.
The gap between CDs and savings has widened in the process. In May, the difference between the two national rates was 1.17 percentage points; in September it was 1.36 points.
How far the national averages sit below the Fed’s rate
Deposit averages trail the central bank’s benchmark by a wide margin. The Federal Reserve’s open market operations page lists a target range of 3.75% to 4.00% from the Sept. 17 decision, down from 4.00% to 4.25%. The effective federal funds rate was 3.88% on Sept. 24, according to the St. Louis Fed’s daily series. Against that rate, the FDIC’s 12-month CD average is 2.15 percentage points lower and its savings average 3.51 points lower.
That spread means the national averages captured by the FDIC say little about the rates a saver may find by comparing institutions, and they say a good deal about how little the typical account pays. A retiree holding cash in a typical savings account earns a fraction of the overnight rate banks charge one another.
The dating of the readings matters for a fast-moving benchmark. The September figures come from series last updated on Sept. 21, so they describe the FDIC’s national rates as of that update rather than a live quote. The daily fed funds series, by contrast, showed 3.88% on each day from Sept. 20 through Sept. 24, which leaves the gap between the benchmark and the deposit averages stable across the days since the FDIC data were posted.
What the two rates mean at the insured limit
Scaling the same arithmetic to $250,000, the standard insured amount cited by the NCUA, a savings balance at the 0.37% national rate would earn about $925 in a year, while the same sum in a 12-month CD at 1.73% would earn about $4,325, before taxes and compounding. The $3,400 difference is the annual cost of leaving a large cash balance at the typical savings rate rather than the typical CD rate, though CDs lock funds for the term and savings accounts do not.
Insurance limits that apply whichever institution pays the rate
The national rate includes credit unions, whose deposits are insured by the National Credit Union Administration rather than the FDIC. Share insurance covers members’ accounts dollar-for-dollar, including principal and posted dividends, up to $250,000 per member-owner in individual ownership categories, according to the NCUA’s share insurance page, and the coverage extends to share certificates.
The readings in this report come from the St. Louis Fed’s republication of the FDIC series, which credits the Federal Deposit Insurance Corporation as its source and dates both September values to the Sept. 21 update.
Withdrawal order and the tax bill on retirement income
Retirees who draw from several accounts often find that the order of withdrawals changes how much of their income is taxed, and no agency notice works that order out.
The Retirement Tax & Withdrawal Planner includes four calculators, covering provisional income, the IRMAA tier, the RMD schedule and Roth bracket fill, along with the account withdrawal order.
See the account withdrawal order in The Retirement Tax & Withdrawal Planner.
This article was produced with AI assistance and checked against the primary sources linked above.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
