Nobody knows when rates will rise, but the Federal Reserve's decisions drive the timing

Savings account interest rates follow the federal funds rate, which the Federal Reserve sets roughly every six weeks. When the Fed raises that rate, banks eventually raise what they pay you on savings. When the Fed cuts it, banks cut what they pay you. The timing between a Fed decision and a change to your account is usually one to three weeks, though some banks move faster and some move slower.

The Fed does not announce rate changes on a fixed schedule. It meets eight times a year on dates it publishes in advance, but it can also call emergency meetings. You can see the Fed's meeting calendar and past decisions on the Federal Reserve's website. Financial news outlets report every decision within minutes, so you will know when ready when a change happens — you do not have to guess or wait for your bank to tell you.

The practical answer to "when will rates rise" is: when the Fed decides inflation is low enough or the economy weak enough that raising rates makes sense. That decision depends on data the Fed sees in real time — employment numbers, inflation readings, spending patterns — not on a predetermined schedule. Economists publish forecasts, but those are educated guesses, not certainties.

Key Takeaways

  • The Federal Reserve controls the federal funds rate, and savings account rates follow it with a lag of one to three weeks.
  • The Fed meets eight scheduled times per year plus emergency sessions, and announces decisions publicly on the same day.
  • Banks are not required to raise savings rates when the Fed raises rates, and some move faster than others.
  • You can track Fed decisions through the Federal Reserve's website or financial news, rather than waiting to see changes in your account.
  • Historical patterns show banks cut savings rates faster than they raise them, so rate increases often mean smaller gains for savers than the Fed's move suggests.

How the Fed's rate decision reaches your savings account

When the Federal Reserve raises the federal funds rate by 0.25 percentage points, it does not directly change your savings account rate. Instead, it changes the rate at which banks lend to each other overnight. That shift ripples through the banking system because banks use that overnight rate to price everything else they do — mortgages, credit cards, and savings accounts.

A bank's decision to raise your savings rate depends on whether it needs deposits. If a bank has plenty of cash on hand and few people asking for loans, it has no reason to pay you more. If a bank is short on deposits and needs to attract savers, it will raise rates faster. This is why you see different rates at different banks even when the Fed makes the same move for all of them.

Online banks typically raise savings rates faster than brick-and-mortar banks because they have lower overhead and compete mainly on rate. A large national bank might wait weeks or months to raise rates, or might not raise them at all if it does not need new deposits. Checking your current bank's rate against online competitors tells you whether your bank is keeping pace.

Why banks cut rates faster than they raise them

When the Fed cuts rates, most banks lower savings rates within days. When the Fed raises rates, the same banks often wait weeks or months, or raise rates by a smaller amount than the Fed moved. This asymmetry happens because banks make money on the difference between what they pay depositors and what they charge borrowers. A rate cut when ready shrinks that gap, so banks cut deposit rates fast to protect profit. A rate increase widens the gap, so banks have less urgency to raise what they pay you.

During the 2022 to 2023 period when the Fed raised rates aggressively, online banks raised savings rates quickly — some within days of each Fed decision — because they compete directly on rate. Traditional banks raised rates much more slowly. A saver who moved money to an online bank during that period earned significantly more than someone who stayed with a traditional bank, even though both banks faced the same Fed rate environment.

What happens to savings rates if the Fed cuts instead

If the Fed begins cutting rates, savings account rates will fall. The timing and size of the cut depend on how much the Fed moves and how competitive the market is. During the 2020 pandemic cuts, the Fed dropped rates to near zero, and savings rates followed within weeks — many accounts that paid 2% fell to 0.01% or lower.

If you are earning a competitive rate now and expect the Fed to cut, you have a few options. You can lock in a higher rate by moving money to a certificate of deposit (CD), which guarantees a fixed rate for a set term. You can stay in a high-yield savings account and accept that the rate will fall when the Fed cuts. Or you can move to a money market account, which typically offers a rate between savings and CDs and may adjust more slowly than savings accounts.

How to track Fed decisions without waiting for your bank to move

The Federal Reserve publishes its meeting calendar at federalreserve.gov. Each scheduled meeting date is listed a year in advance. After each meeting, the Fed releases a statement within minutes describing what it decided and why. Financial news sites like Reuters, Bloomberg, and CNBC report the decision when ready, so you do not have to visit the Fed's site yourself if you prefer news coverage.

If you want to know what economists expect at the next meeting, sites like CME FedWatch publish real-time probability estimates based on futures markets. These show the odds of a rate increase, decrease, or hold at the next meeting. These are not predictions — they are market bets — but they reflect what traders think is most likely.

Setting a calendar reminder for Fed meeting dates helps you know when to check your bank's rate. Many savers check their rate the day after a Fed decision and move money if their current bank has not raised rates but competitors have.

The difference between what the Fed does and what your bank does

A common source of confusion: the Fed raising rates does not mean your bank must raise your rate. The Fed controls one specific rate (the federal funds rate), and banks use that as a reference point. But each bank sets its own deposit rates based on its own needs and strategy. A bank could theoretically keep savings rates flat even if the Fed raises rates, though it would lose deposits to competitors.

This is why shopping around matters. If your bank has not raised rates after a Fed increase, moving your money to a bank that has tells you when ready whether your bank is being competitive or just hoping you do not notice. Many people discover they are earning 0.5% at their main bank while online banks offer 4% or 5% — a difference that compounds significantly over time.

What economic conditions might trigger the Fed to raise rates

The Fed raises rates when inflation is running above its 2% target and the economy is strong enough to handle higher borrowing costs. It cuts rates when inflation is below target or the economy is weakening and needs a boost. The Fed does not announce these thresholds in advance — it adjusts based on the data it sees.

If you want to understand whether a rate increase is likely in the coming months, watch inflation reports (released monthly by the Bureau of Labor Statistics) and employment reports (released monthly by the Bureau of Labor Statistics as well). When inflation is falling and employment is stable, the Fed is less likely to raise rates. When inflation is rising and the job market is hot, the Fed is more likely to raise rates.

Economic forecasts from major banks and research firms are published regularly and can give you a sense of what economists expect. These are not certain — the economy surprises regularly — but they provide context for understanding why the Fed might move in a particular direction.

Frequently Asked Questions

Will savings rates go back up to 5% like they were in 2023?

That depends entirely on what the Fed does with the federal funds rate. Savings rates of 4% to 5% appeared when the Fed's rate was at 5.25% to 5.50%. If the Fed raises rates back to that level, savings rates would likely follow. If the Fed keeps rates lower, savings rates will be lower too. No one can predict what the Fed will do more than a few months ahead.

Should I move my money now before rates fall?

If you think rates will fall and want to lock in a higher rate, a CD is the right tool — it guarantees a fixed rate for a set period. A savings account rate can change at any time. If you move to a CD now and rates fall, you keep your locked-in rate. If you stay in savings and rates fall, your rate falls with them.

Why does my bank's rate not match what I see online?

Banks set their own rates based on whether they need deposits. A large bank with plenty of customer money may not raise rates even when competitors do. Online banks compete mainly on rate, so they tend to match or beat the highest rates available. If your bank's rate is significantly lower, moving money to a higher-paying bank is a straightforward way to earn more.

How long after a Fed decision should I expect my bank to move?

Online banks often move within one to three business days. Traditional banks may take one to four weeks, or may not move at all. The only way to know your bank's pattern is to watch what it does after the next Fed decision. If it moves quickly, you can check after each Fed meeting. If it moves slowly, you might check monthly instead.

Can I predict what the Fed will do based on past patterns?

The Fed's decisions depend on current economic data, not on patterns. It might raise rates for six consecutive meetings, then hold steady, then cut. Economists publish forecasts, but these are educated guesses based on available information, not certainties. The safest approach is to track what the Fed actually does through its public announcements, rather than trying to predict future moves.