If you have savings you’re looking to invest in a certificate of deposit (CD), savings account, or money market, you want to know: What’s a strong rate? And what product fits me best?
If you have savings you’re looking to invest in a certificate of deposit (CD), savings account, or money market, you want to know: What’s a strong rate? And what product fits me best?
CD rates remain historically elevated and continue to preserve returns better than adjustable-rate savings and money market accounts.
We have listed CDs as a UTILIZE, with a strong rate at 3.48%.
We have listed savings accounts and money markets as AVOID, but if you need a liquid account, a strong rate is 3.74%.
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SOURCE: Dollar180 Analysis of FDIC Data, March 2026.
We report strong rate indicators even when we avoid a deposit product, so they have it if needed.
Hello friend,
Here’s the deep dive behind our March perspective on deposit products.
Fear of a full-blown war with Iran, rising oil prices, and heightened tensions at airport lines have created a maelstrom of uncertainty over the current state of the U.S. economy. The Federal Reserve, at its latest Federal Open Market Committee meeting in mid-March, for example, announced that it will maintain its benchmark federal funds rate range at 3.5-3.75% as “uncertainty about the economic outlook remains elevated.”
As the Fed watches and waits to see if, and when, it will lower its benchmark rate, depositors are anxious to know – now – where to make the most of their savings. Based on our analysis, we at Dollar180 believe it is time for savers to use CDs offering a strong APY of at least 3.48% and to avoid savings and money market accounts.
But why CDs? As we said in our January article, CDs are locked-in products, impervious to changes in interest rates, unlike savings and money market accounts, which are adjustable-rate products. As we have seen in recent years, CD rates have been historically elevated and are positioned to preserve returns better than savings and money markets. Moreover, rate futures indicate lower rates ahead, meaning rates on savings and money markets will likely be lowered by banks and credit unions. But for those who insist on staying put in savings or money market accounts, we suggest accounts that yield at least 3.74% APY.
Here is why we are bullish on CDs now…
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Saving in uncertain times
At a time when predicting the path of interest rates is nothing more than guesswork, depositors want to know when to open a CD to lock in a competitive rate for the long term (more than 12 months) and, if so, what constitutes a competitive rate. But it is more than that. Today, you need to know which maturity date best supports a strong long-term yield and which deposit product best protects against potential higher or lower deposit rates.
The Case for CDs
For a window into where interest rates are heading over the next 18 to 24 months, as well as our rationale for investing in CDs, consider fed funds futures data from the CME Group. In the following graph, we have plotted CME’s probability of rate futures as of March 27. (The blue line in the graphic below is the plot of the highest probability of CME futures; the orange line reflects the second-highest probability.)
At its last meeting earlier this month, the Fed maintained its expectation to lower rates by 25 basis points (bps) this year and by another 25 bps in 2027, for a total of 50 bps. (100 basis points is 1% in interest.) But CME analysts are not predicting a rate cut in 2026. If that prediction holds true and you have both a CD and a savings account, which one will stand to lose more return? Clearly, it is the savings/money market account, because if you have a savings account yielding 3.50% APY, a bank or credit union could lower that as much as it can in reaction to the lower fed funds rate.
A CD, however, locks in your return. The only risk is when the fed funds rate goes up, and you miss out on a higher yield. But as you can see in this graph, because there is some probability that rates can go up, you could miss a higher yield of up to 25 bps on a CD, while your lost yield in a savings account when rates decrease could be as much as 50 bps. In a CD, you may risk missing 25 bps, but in a savings account, you risk more.
Interest Rates and the Banking Industry
Financial institutions aspire to help you succeed at life, especially in your finances, but when it comes to interest on deposits, most act more like a car dealership, phone company, or the person selling used furniture on Facebook Marketplace: They are on the other side of the transaction, and it is a zero-sum game.
You must look after your best interests in two ways: interest rate and maturity. Avoid only focusing on the rate. That is how they attract you to products that are good for them and not necessarily for you.
For example, you can see that most online promotions offer banks’ and credit unions’ best rates on money markets and savings accounts. CDs are also promoted with the best rate for a 12-month (or less) term. Curious as to why?
Follow the line…
In three months, any bank or credit union can lower your rate by as much as 25 bps, according to Fed Funds Futures data. (100 bps is 1% in interest.) In a year, they could lower rates by up to 50 basis points compared to today.
This is why an institution wants new funds from you in a savings or a money market account. Even if you opened a CD with a 12-month term or less, it will mature when rates are down by 0.5%. That means, in 12 months, the bank can pay you 14.3% less in interest, even if you ask for their highest rate.
If you let your CD renew automatically, you will likely make at least 50% less. But if you had your money in a savings/money market account, you would likely miss upwards of 85% of the yield available to you.
So, what should you do instead? We have information for you in our Supporter service.
Economics: No clear sign of when rates will decrease
Despite veiled Fed hints that it plans to cut its benchmark funds rate by 25 bp sometime this year, we do not see economic data supporting a near-term rate cut, given the uncertain state of trade policies and geopolitical issues in the Middle East.
Here is what we are seeing:
Inflation remains above target for the Federal Reserve: Over the past 12 months, the all-items index increased 2.4 percent before seasonal adjustment.
Potentially forecasts a no-change or rate increase in the future.
Unemployment: The latest Labor Department report on jobless claims shows initial filings are at the third-lowest level in the past year. Now at 205,000 weekly claims as of the latest data on March 14, the low point was 201,000 claims on Jan. 10. The high point of the past 12 months was 259,000 weekly claims on Sept. 6, 2025.
Potentially forecasts a no-change or rate increase in the future.
GDP: Projections show growth, not stagnation. The Federal Reserve Bank of Atlanta’s GDPNow model now estimates real GDP growth (seasonally adjusted annual rate) at 2%. That is what is called a “nowcast,” which predicts GDP within the next 120 days or less. The last nowcast is down from 3.7% in CD Valet’s last Market Update blog. That downward move in the GDPNow forecast reflects “construction spending report from the US Census Bureau [shows] real private fixed investment growth decreased from 3.1 percent to 1.2 percent,” the Atlanta Fed said in its release.
Potentially forecasts a no-change or rate increase in the future.
But even though Fed Futures and the “Big Three” indicators for the future of deposit rates both point to rates staying the same or rising, Powell said in March that the FOMC will likely lower rates twice before the end of 2027.
That’s why…
Bottom line
A CD with a strong rate is an optimal choice right now.
It may not feel as strong if inflation causes the Fed to raise its target rate. But CDs incur less yield loss in declining rate environments like the one the Fed now predicts. Savings and money market accounts will be repriced lower by banking institutions if rates decline. In a recession, that repricing can be hundreds of basis points on liquid accounts.
We will keep a close eye on the latest data and trends to help you maximize the return on your savings.
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