US average savings rate just 0.38% as Fed policy rate reaches 3.75% to 4%

An ordinary US savings account pays a national average of just 0.38% a year. At the same time, the Federal Reserve's policy target range is 3.75% to 4.00%. The two figures differ by about tenfold, which shows something often overlooked: when a central bank raises rates, your deposit interest does not necessarily rise with it.

The Federal Open Market Committee (FOMC) meets on 27 and 28 October 2026, US time. As of 27 October, the Fed's meeting calendar had not yet listed a statement, press conference or minutes for this meeting, so the outcome is still to be announced. This article makes no rate forecast. It simply sets out the official figures known so far, so you can compare them once the statement is released.

The September step: all 12 votes for a rise

On 16 September 2026, US time, the Fed announced it was raising the federal funds target range by a quarter of a percentage point, to 3.75% to 4.00%. The committee voted 12 to 0 in favour.

The statement said inflation remained elevated and that the rise was intended to help bring inflation back to its 2% target more quickly. It also contained the line "will deliver price stability" (Fed statement, September).

The statement described job gains as broadly in line with labour force growth, a largely unchanged unemployment rate, and economic activity expanding at a solid pace. It also said uncertainty was elevated, partly stemming from geopolitical developments.

On the technical side, from 17 September 2026 the interest rate on reserve balances (IORB) was set at 3.90% and the primary credit rate at 4.0%.

Three signals in the minutes

The minutes of the September meeting were published on 7 October 2026.

• Inflation still high: for the 12 months to August, overall personal consumption expenditures (PCE) inflation was estimated at 3.8% and core PCE at 3.4%. Using the US Bureau of Economic Analysis (BEA)'s new method, Fed staff estimated 3.6% and 3.2% respectively.
• Path undecided: most participants expected one more rate rise before the end of the year, but said later decisions would depend on data. Staff expected inflation to return to 2% only in 2029.
• Views differ: some participants worried that inflation having stayed above 2% for more than five years in a row could affect inflation expectations and wage- and price-setting behaviour. A few participants also judged the current policy rate to be not restrictive, or only mildly restrictive.

To be clear: "one more rise before year-end" is a record of what September participants expected, not a decision made in October. The next meeting is scheduled for 8 and 9 December.

Savings and fixed deposits: a wider gap than you might expect

National average rates published by the US Federal Deposit Insurance Corporation (FDIC) show that, as of 19 October 2026, savings accounts paid 0.38% and 12-month certificates of deposit paid 1.76%.

The policy rate is above 3.75%, yet the national average savings rate is only 0.38%.

This is a comparison this article makes by setting two sets of official figures side by side. It is not a statement from any institution, and it does not imply a fixed causal ratio between the two. It is only a reminder that the Fed's decision is the backdrop, while how much interest a bank actually pays you still depends on its own quoted rates.

For the same cash, the national averages for a savings account and a 12-month deposit already differ by more than 1 percentage point, and both are far below the policy range.

Mortgages: one week's data is only a snapshot

Freddie Mac's weekly mortgage market survey shows that, as of 22 October 2026, the average 30-year fixed-rate mortgage was 7.32% and the 15-year was 6.68%.

This is a single week's figure. This article has not verified how these two rates moved before and after the September rise, and has not found an official explanation quantifying the relationship between mortgage rates and Fed decisions, so it cannot infer the actual effect of the rise on mortgages.

How to compare once the October statement is out

1. Check the rate range first: is it still 3.75% to 4.00%, and was the vote unanimous again?
2. Then check the wording: has the statement's description of inflation, employment and uncertainty changed since September?
3. Then look at your own account: compare the savings and deposit rates your bank actually offers with the FDIC national averages. The averages are updated, so note the data date when comparing.
4. For mortgages, you can refer to later Freddie Mac weekly surveys, but a single week's figure reflects only one point in time.

The data in this article covers the United States only and does not include Hong Kong dollar deposit or mortgage rates, so it should not be applied directly. All rate figures are as of October 2026. For personal financial decisions, consult a licensed professional.

The Fed's rate is the backdrop, but the number in your account still depends on what your bank actually quotes.

Prices and details correct as of October 2026

This article is general information, not investment, tax or insurance advice. Everyone’s circumstances differ; consult a licensed professional before making decisions.