Should I Lock a 5-Year CD Before the Fed Meeting?
Fed funds rate context (September 2026)
Here is the rate environment as of September 28, 2026:
| Metric | Value | What it means for CDs |
|---|---|---|
| Fed funds target range | 3.75-4.00% (since September 16, 2026) | Top of bank cost-of-funds curve |
| Last FOMC move | +0.25 point (September 16, 2026) | A hike. The Fed made no cuts in 2026. |
| Earlier in 2026 | Held at 3.50-3.75% (January, March, April, June, July) | The last cut was in December 2025 |
| Next FOMC meetings | October 27-28 and December 8-9, 2026 | Outcome not known in advance |
| 5-yr Treasury yield | 4.98% (September 25, 2026) | Anchors longer-dated CD pricing |
| Best nationally available 5-yr CD | 4.35-4.50% APY (September 25, 2026) | Top of the retail shelf |
| Best nationally available 1-yr CD | 4.35-4.50% APY (September 25, 2026) | CD shelf is flat from 1 to 5 years |
Sources: Federal Reserve FOMC statements, 2026; U.S. Treasury daily par yield curve, September 25, 2026; DepositAccounts, September 25, 2026.
Translation: An earlier version of this page (June 2026) described a Fed cutting cycle. That was wrong: the Fed held all year, then raised 0.25 point on September 16, 2026. When the Fed does cut, short-term CD yields have historically fallen faster than long-term CD yields, because longer rates already reflect expected policy. After a hold or a hike, CD shelves tend to stay put or drift up. A locked term takes that uncertainty off the table in either direction.
The decision: lock now or wait for the meeting
Waiting for an FOMC decision is a bet on its outcome. By the 2:00 PM ET release the bond market has usually priced what it expects, so CD shelves move most when the Fed surprises. What drives the CD reaction:
- Whether the Fed moves, and which way
- The size of the move (25 vs 50 bps)
- The statement language and, at quarterly meetings, the Summary of Economic Projections
What happened at the 2026 meetings
| FOMC meeting | Decision | Target range after |
|---|---|---|
| January 28, 2026 | Hold | 3.50-3.75% |
| March 18, 2026 | Hold | 3.50-3.75% |
| April 29, 2026 | Hold | 3.50-3.75% |
| June 17, 2026 | Hold | 3.50-3.75% |
| July 29, 2026 | Hold (3 members dissented in favor of a hike) | 3.50-3.75% |
| September 16, 2026 | +0.25 point, 12-0 vote | 3.75-4.00% |
Source: Federal Reserve FOMC statements, 2026.
The June 2026 version of this page put a 70% chance on a July cut and called waiting a losing bet. That call was wrong. Someone who waited gave up little: the best 5-year CDs were 4.35-4.50% APY on September 25, 2026 (DepositAccounts), against 4.40-4.65% in this page's June figures, while the 5-year Treasury rose to 4.98% (U.S. Treasury, September 25, 2026).
The math: lock before a meeting vs after (hypothetical)
$250,000 in a 5-year CD, starting from a 4.50% shelf. The outcomes are illustrations; no probabilities are assigned.
| FOMC outcome | Illustrative 5-yr CD APY a few weeks later | Effect of waiting on $250K over 5 years |
|---|---|---|
| Fed cuts 0.25 point | 4.32% | About $2,700 less than locking first |
| Fed cuts 0.50 point | 4.15% | About $5,200 less |
| Fed holds | 4.50% | About even |
| Fed raises 0.25 point (the September 16, 2026 outcome) | 4.68% | About $2,700 more by waiting |
Timing a meeting is a coin flip you don't have to take. If the money has a firm 5-year job, the rate you can lock this week is known and the meeting outcome is not. If you are unsure, split the purchase across two or three meetings.
If the Fed does cut: how fast CD shelves have moved
Two historical analogs:
- July 2019: Fed cut -25 bps for the first time in 11 years. Top 5-yr CD shelf fell from 3.10% to 2.65% within 2 weeks of the cut.
- September 2007: Fed cut -50 bps (surprise upsize). Top 5-yr CD shelf fell from 5.10% to 4.40% within 30 days.
The pattern: when the cut happens, the move is fast. Banks don't post the higher rate the week before to attract last-minute lockers; they post the lower rate the day after.
How fast issuers reprice after an FOMC move
| Issuer | 5-yr CD APY (June 2026, not current) | Posting pattern | Typical repricing after a Fed move |
|---|---|---|---|
| Marcus by Goldman Sachs | 4.30% | Reprices weekly | Within 5 business days of FOMC |
| Ally Bank | 4.25% | Reprices weekly | Within 5-7 days |
| Discover | 4.30% | Reprices biweekly | Within 10-14 days |
| Brokered (Fidelity/Schwab) | 4.55-4.65% | New issues daily | Immediate: new shelves daily |
| Credit unions (PenFed, Navy) | 4.10-4.25% | Reprices monthly | August 1 grid reset |
Action checklist
- Open a brokerage account if you don't have one: Fidelity, Schwab, or Vanguard. Brokered CDs run 20-30 bps higher than retail bank CDs. Account opens in 24 hours.
- Get the multi-issuer 5-yr brokered CD shelf today. Lock the top-rated issuer.
- If you use a bank CD, don't hold out for the meeting. Banks sometimes trim posted rates in the days before an FOMC meeting when a cut is widely expected, and raise them slowly after a hike.
- Compare to a 5-yr MYGA: MYGA top shelf was 5.75-5.85% in June 2026, 110-130 bps over the CD; A-rated 5-year MYGAs paid about 5.50% to 6.05% on October 14, 2026 (public carrier rate sheets). Worth the call.
- Don't try to time the meeting. In 2026 the cuts many expected never came; the Fed raised instead.
Related: Historical CD rate moves after Fed cuts | How much will CD rates drop? | Lock now or wait (general) | MYGA before FOMC?
Lock the Right Rate Before Fed Action: 15-Minute Call
CD shelves reprice quickly after a Fed move in either direction. Get a written rate-lock recommendation before the next FOMC meeting (October 27-28, 2026).
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Get My Rate-Lock ReviewFAQ
Do CD rates always drop after an FOMC meeting?
No. They move with the decision and with what markets expected. The Fed held at the July 29, 2026 meeting and raised 0.25 point on September 16, 2026; the best 5-year CDs paid 4.35-4.50% APY on September 25, 2026 (DepositAccounts).
What's the difference between a brokered CD and a bank CD?
Brokered CDs are bought through Fidelity, Schwab, or Vanguard from banks across the country, typically paying 20-30 bps more than direct bank CDs. Downside: no early-withdrawal option, only secondary market sale (often at a loss if rates rose).
If the Fed surprises and hikes, am I stuck with my lower rate?
Yes, for the locked portion. That is what happened on September 16, 2026, when the Fed raised 0.25 point. Your locked CD keeps its rate, new money can go in at the higher rate, and a ladder spreads that timing risk.
How early before FOMC do banks reprice?
Banks rarely raise rates before an expected cut. They sometimes lower rates 5-10 days before FOMC if a cut is highly expected. Brokered CD shelves move faster, sometimes daily.
Should I split my lock across multiple FOMC meetings?
In a cutting cycle each meeting tends to price lower, which argues for locking sooner. In a flat or rising environment, like September 2026 after the Fed's hike, spreading purchases across meetings makes more sense. Nobody knows in advance which one the next meeting brings.
What if I want a longer-than-5-year CD?
7-year and 10-year brokered CDs exist (issuers: BMO, US Bank, JPMorgan, Wells) at 4.65-4.85% in June 2026 (not current). The premium over 5-year is small (~20-25 bps) but locks more years of high-rate compounding.
Lock the right rate before the Fed moves
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Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple A-rated carriers
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Disclosure
Product rates cited in this article reflect publicly available data as of 2026-06-27 unless another date is shown. Fed policy facts are as of 2026-09-28 (Federal Reserve FOMC statements). CD, MYGA, and HYSA rates change frequently: typically weekly for HYSAs, daily-to-weekly for CDs, and monthly for MYGAs. Always confirm current rates against the carrier's most recent disclosure and the actual contract before purchasing. This is general education, not a personal recommendation or an offer of any product. Hans Goldstein is an independent licensed insurance producer (NPN 20602398) appointed with multiple A-rated carriers. CDs are FDIC-insured to applicable limits; MYGAs are backed by the issuing carrier and state guaranty associations (typical coverage $250,000-$300,000 per owner per carrier); HYSAs are FDIC-insured to $250,000 per depositor per institution. MYGAs are long-term contracts with surrender charges; they are not suitable for funds you may need before the end of the surrender period. Past rate trends do not predict future rates. AM Best ratings and tax treatment are subject to change.