A savings account can show a higher balance every month and still lose ground, because what matters for a household is what the money can buy. This article, which describes United States data and rules, explains how to compare a deposit rate with inflation and what the latest official figures imply.
The two numbers that decide whether savings keep up
Every saver deals with two rates. The first is the nominal rate: the interest a bank or credit union pays, usually quoted as a percentage per year. The second is the inflation rate: how fast a typical basket of goods and services is getting more expensive.
The difference between them is the real return. If a balance grows 2% in a year and prices rise 3%, the balance buys about 1% less than it did before, even though the statement shows a bigger number. That is true in any country, but the figures below are specific to the United States.
What do US deposit rates look like right now?
The Federal Deposit Insurance Corporation (FDIC) publishes national deposit rates. According to the FDIC, as of September 21, 2026, the national rate was 0.37% for savings accounts, 0.63% for money market accounts and 1.73% for 12-month certificates of deposit (CDs). Interest checking stood at 0.07%.
Those figures are averages. The FDIC says its Final Rule defines the national rate as the average of rates paid by all insured depository institutions and credit unions for which data is available, weighted by each institution’s share of domestic deposits. Because large institutions hold much of the money, the average is pulled toward what large institutions pay. Individual accounts can and do pay more or less than the average, so the national rate is a benchmark, not a quote for any particular product.
| Product (FDIC, as of September 21, 2026) | National rate |
|---|---|
| Savings | 0.37% |
| Interest checking | 0.07% |
| Money market | 0.63% |
| 12-month CD | 1.73% |
| 60-month CD | 1.38% |
The rate cap is not a typical rate
The same FDIC page lists a “national rate cap,” such as 4.38% for savings and 5.74% for 12-month CDs. The FDIC describes the cap as the higher of the national rate plus 75 basis points, or 120% of a comparable Treasury yield plus 75 basis points (for non-maturity deposits, the federal funds rate is used instead of a Treasury yield). It is a regulatory ceiling in the FDIC’s framework. It should not be read as what savers normally earn.
And what is inflation doing?
According to the Bureau of Labor Statistics (BLS), the Consumer Price Index for All Urban Consumers (CPI-U) rose 3.4% over the 12 months to August 2026, not seasonally adjusted. The BLS release also showed a monthly increase of 0.4% on a seasonally adjusted basis. The September 2026 report was scheduled for October 14, 2026, so readers should check the newest release, which may change the picture.
For a fuller explanation of what that index does and does not capture, see what inflation actually measures. One caution is that CPI describes an average basket. A household that spends heavily on rent, insurance or food may face a personal inflation rate above or below the headline number.
How big is the gap? A worked example
Take a balance of $10,000 held for one year, using the FDIC national rates and the 3.4% CPI-U figure above. This is illustrative arithmetic, and it assumes interest is paid once at the end of the year and that prices rise exactly 3.4% over that year.
To measure purchasing power, divide the ending balance by 1.034, which is one plus the inflation rate.
| Where the money sits | Ending balance | Buying power in today’s dollars | Change in buying power |
|---|---|---|---|
| Savings at 0.37% | $10,037 | about $9,707 | about -$293 |
| Money market at 0.63% | $10,063 | about $9,732 | about -$268 |
| 12-month CD at 1.73% | $10,173 | about $9,839 | about -$161 |
In percentage terms, the real return is (1 + nominal rate) / (1 + inflation) - 1. For the savings rate, that is 1.0037 / 1.034 - 1, or about -2.9%. A quick shortcut, subtracting inflation from the nominal rate, gives 0.37 - 3.4 = -3.03 points, close but not identical. The shortcut works well when rates are low and gets less precise as they rise.
The pattern is the point. At the national averages, none of these three products would have kept pace with inflation at the August 2026 rate. An account paying well above the national average would narrow the gap, and a rate above 3.4% would close it, though this depends on which accounts are available, and the worked example does not claim any specific product pays that.
Is a negative real return always a bad outcome?
Not necessarily, and it helps to separate the jobs that money does. Cash held for a near-term bill, such as next month’s rent or a car repair, is there for certainty and access. A small real loss on that money is the cost of having it available without risk of a price swing. The role cash plays in a household is a different question from how well it grows.
The problem arises when savings meant for years from now sit at a rate far below inflation. A pot earmarked for something five or ten years away is exposed to the slow erosion described above. That is a trade-off between safety and purchasing power, and different households weigh it differently. Longer-term growth assets carry their own risks, including the possibility of losses, and this article does not suggest which approach any reader should take.
Why deposit rates and inflation can move apart
Deposit rates do not track inflation mechanically. Banks set them based on competition, how much funding they need, and the policy rate set by the Federal Reserve, among other things. Inflation, by contrast, reflects the prices of housing, energy, food and services. When the two diverge, savers feel it first in real terms.
Policy decisions feed into both sides. For context on how the central bank’s moves reach household accounts, see the explainer on the September 2026 Federal Reserve rate decision. Rate changes can take time to appear in deposit rates, and some institutions pass them on faster than others.
A related point concerns pay. If wages rise slower than prices, the squeeze reaches both income and savings. The analysis of how real wages compare with prices covers that side of the story.
Questions worth asking about any savings account
Reading a rate sensibly takes a few checks that apply regardless of the provider:
- Is the rate fixed or variable? A variable rate can fall or rise after you open the account. A CD locks in a rate for its term, usually with a penalty for early withdrawal.
- Is it an introductory rate? Some accounts pay a higher rate for a limited time, then drop.
- What is the annual percentage yield (APY)? APY includes the effect of compounding, so it is the comparable figure across accounts.
- Are there conditions? Minimum balances, monthly fees or deposit requirements can erase a headline rate.
- Is the money insured? Deposit insurance in the United States covers deposits up to set limits per ownership category at an insured institution. The article on how FDIC ownership categories work explains the structure.
Reading a rate with inflation in mind
The latest official figures show a wide gap in the United States: national average deposit rates between 0.37% and 1.73% for the products listed, against annual CPI-U inflation of 3.4% in August 2026. On those averages, a balance grows in dollars but shrinks in what it can buy. The size of the shortfall depends on the account, the time frame and the household’s own spending pattern, so the useful habit is simply to compare any rate with the current inflation figure before drawing conclusions about how well the money is doing.
This article is general information, not personalised financial advice. Rules and rates change.
Sources: Federal Deposit Insurance Corporation; Bureau of Labor Statistics
