The Fed may hike September 16. The average savings rate is 0.38%.
Markets price a Fed hike next week. Since 2022 the Fed moved 525 basis points up and 175 down, and the national savings average travelled 41 of them.
The Editors · 8 min read ·
A Fed hike doesn't raise the rate on your savings account. It raises the rate your bank is free to pass on, and there are four and a half years of record on what banks do with that freedom.
The FDIC put the national average savings rate at 0.38% on 17 August 2026. It has read 0.38% since April. Over the same stretch the Fed's target range climbed from 0-0.25% to 5.25-5.50% and came back down to 3.50-3.75%. The savings average began that run at 0.06% and topped out at 0.47%.
Markets moved to price a hike at the 16 September meeting after August CPI printed 3.4% over twelve months on 11 September. Say the hike lands and banks behave the way they have since 2022. The average savings account then picks up roughly two basis points. On $10,000 that is about $2 a year.
The number worth acting on is already on the table. Bankrate's survey puts the best savings accounts at around 4% APY as of 11 September 2026. The distance between 0.38% and 4% is 362 basis points, and collecting it takes no Fed meeting at all.
What the Fed moved, and what reached savers
The arithmetic below comes from two public series: the FDIC's national savings rate, published monthly as SNDR, and the Fed's target range upper bound, published daily as DFEDTARU. It is our calculation, not a published statistic.
Going up. The first hike landed 17 March 2022 and the last one 27 July 2023. The upper bound went from 0.25% to 5.50%, a move of 525 basis points. The savings average went from 0.06% in March 2022 to 0.42% in July 2023, a move of 36. Savers captured 6.9 cents of every dollar of tightening. Deposit rates lag, so give the banks the benefit of the lag: the savings average kept drifting up to its all-time high of 0.47% in January 2024. Measured to that peak, it is 41 basis points on 525, or 7.8 cents.
Coming down. Cuts started 19 September 2024 and ran to 11 December 2025, taking the upper bound from 5.50% to 3.75%, a move of 175 basis points. The savings average went from 0.46% to 0.39%, a move of 7. Through August 2026 it slipped one more, to 0.38%. That is 4.6 cents of every dollar of easing.
So the pass-through runs near 8% on the way up and 5% on the way down. Both directions are close to flat. On the ordinary savings account the Fed barely transmits at all: across 525 basis points up and 175 down, the national average has travelled 32 basis points net in four and a half years. The asymmetry people argue about is a rounding error next to how little moves either way.
Where the 0.4 deposit beta actually lands
The number that gets quoted in coverage of rate cycles is the deposit beta, and it is much larger than 8%. The New York Fed reported on 11 April 2023 that the cumulative interest-bearing deposit beta reached almost 0.4 during the fourth quarter of 2022, and that it got there in one year against the three the 2015-2019 cycle took.
That 0.4 is real, and it describes a different thing. It covers the whole interest-bearing book: brokered deposits, large time deposits, certificates, corporate cash, everything a treasurer can move with a phone call. Banks bid hard for the money that could leave. Savings balances at the largest banks mostly did not leave, so nobody had to bid for them.
The composition is the point. An industry beta near 0.4 and a retail savings beta near 0.08 are both true at once, and the gap between them is the balance that stayed put.
Two national averages, and why they differ
Cross-checking the headline number turns up a conflict worth naming. The FDIC says 0.38%. Bankrate's survey, on 11 September 2026, says 0.62%. Both are published, both are current, and they disagree by 24 basis points.
The methods explain it. The FDIC weights each institution by its share of domestic deposits, so a bank holding a trillion dollars counts a thousand times more than a bank holding a billion. Bankrate surveys a set of institutions. The FDIC figure is closer to what the typical dollar earns, because most dollars sit at a handful of very large banks that pay very little. The Bankrate figure is closer to what the typical bank offers.
If you want to know what your money is probably earning, use the FDIC number.
What the banks do with the spread
The FDIC's Quarterly Banking Profile for the second quarter of 2026, released 1 September, puts total deposits at insured institutions at $20.72 trillion. The cost of funding earning assets across the industry was 2.03%. Net interest margin was 3.32%, up a basis point from the first quarter. Net income came to $90.1 billion for the quarter.
Read those two numbers together. The industry pays 2.03% to fund itself and the savings product averages 0.38%. The expensive funding is the wholesale money and the certificates. The cheap funding is the checking account and the savings account of somebody who has not moved it.
Some money did move. The Investment Company Institute counted $7.97 trillion in money market funds for the week ended 9 September 2026, $3.11 trillion of it retail. That is the flow the banks were bidding against, and it is the alternative that forced the rest of the pass-through.
Who this applies to, and who it doesn't
Anyone holding an emergency fund, a cash buffer, or quarterly tax money in a large-bank savings account is giving up something close to 360 basis points a year for the convenience. On $25,000 that is roughly $900.
Three honest caveats.
First, the $20.7 trillion is not all savings. A large share is non-interest-bearing checking and business operating cash, where the account is buying settlement and access rather than yield. Nobody is being cheated by a checking account that pays nothing.
Second, a money market fund is not a bank deposit. It carries no FDIC insurance, and the $7.97 trillion that moved took on a different risk to get the yield. High-yield savings accounts at online banks do carry the insurance, and that is the cleaner comparison.
Third, the top rates move. Promotional APYs, balance caps, and minimum-balance tiers are common at the front of the table, and the best rate today can be reset the week after a Fed decision. The 4% figure is where the market sits on 11 September 2026, not a forward promise.
What to watch
The FOMC decides on 16 September, and it publishes a Summary of Economic Projections at that meeting, so the dot plot arrives with the decision. Bloomberg reported on 11 September that bond traders had moved to two hikes priced for the year after the CPI release; earlier in the week the futures-implied odds for September alone sat nearer 56%. We have written on the case for and against that hike and on the August payrolls feeding it.
Then watch the FDIC's next national rates update in mid-October. If the savings average is still 0.38% a month after a hike, the pass-through argument is settled for this cycle.
Sources
- Consumer Price Index Summary, August 2026, Bureau of Labor Statistics, 11 September 2026
- National Rates and Rate Caps, August 2026, FDIC, 17 August 2026
- National Rate: Savings (SNDR), FRED, monthly series to August 2026
- Federal Funds Target Range, Upper Limit (DFEDTARU), FRED, daily series to 11 September 2026
- Deposit Betas: Up, Up, and Away?, Liberty Street Economics, Federal Reserve Bank of New York, 11 April 2023
- Quarterly Banking Profile, Second Quarter 2026, FDIC, 1 September 2026
- Money Market Fund Assets, Investment Company Institute, week ended 9 September 2026
- Average Savings Account Interest Rate, Bankrate, 11 September 2026
- Top high-yield savings rates, Fortune, 10 September 2026
- Bond Traders Price in Two Fed Hikes This Year After CPI Report, Bloomberg, 11 September 2026
This is not financial advice.
