2026 will begin with the question of who will replace Jay Powell as Fed Chief when his term expires in May and with the certainty that rates will continue their downward trend.
The downward trend in rates is lessening the attractiveness of certificates of deposit, but many banks are still building up those accounts despite that.
In this week’s issue of Jumbo Rate News, we have the 25 Big Banks as well as the 25 Community Banks holding the most deposits in Jumbo CDs. While some have shrunk, others have shown impressive gains.
CD Rate Predictions for 2026
The team at BauerFinancial would like to wish you all a Joyous Holiday Season!
Before we close out 2025, though, we’d like to take a look where rates are headed. With everything going on the past couple of weeks, we breezed right past the Federal Reserve’s final Open Market Committee meeting of the year. We’re sure you already know that rates were lowered a quarter point, but the story doesn’t end there.
As we have come to expect of late, the vote was not unanimous. Three voters dissented: one (Stephen Miran) would have preferred a larger (1/2 point) cut while two others wanted to leave the rate as it was. All other voting members, including Michelle Bowman and Christopher Waller agreed upon the quarter point cut.
We singled these two out because they are considered among the front-runners to replace Jerome (Jay) Powell as Federal Reserve Chair when his term expires in May. The other two under consideration are not currently on the board but have extensive experience.
Referred to as “The Kevins”, they are Kevin Warsh and Kevin Hassett. Adding one of the Kevins would give President Trump an ally at the helm without giving up one he already has on the committee. It is important to remember, however, that the Fed is independent and should remain so.
The committee should be making its decisions based on the data, without any outside pressure. The shutdown made that somewhat difficult this time around, but there was clearly enough data available to reach a consensus quarter point cut and to likely keep lowering rates.
Committee projections (the dot plot) show no sign of agreement as to where rates are headed in 2026, however. Three members believe the Fed Funds rate will end ’26 between 3.75% and 4.00% while one member thinks it will be down close to 2%.
It isn’t until 2027 and 2028 that we see some cohesion in the plotting. Most members agree we will be looking at a Fed Funds rate around 3% or 3.25% by then. That’s a long way off to project, but still, it is looking like it will be a lot better for borrowers than for savers.
The last time the Fed Funds rate was between 3.00% and 3.25% was in September and October of 2022. At that time, the 1-year Jumbo CD rate in JRN peaked at 5.67% (JRN 40:37). We will not see a repeat of that, because at that time, rates were headed up. Today we have the opposite scenario. Rates are headed down and the top 1-year rate in this week’s issue is already low at 4.00%.
We have to go back to January of 2008 to find the next occurrence of a 3.00-3.25% Fed Funds Rate. Rates were heading down then; the top 1-year rate in JRN 25:01 was 5.00%. By April it had bottomed out at 3.55%.
That is a more likely scenario, but every cycle is a little different. This time around, for better or worse, bankers have priced rate cuts into their own forecasts and are already adjusting CD rates accordingly. We will see them continue to drop, but not as fast as they did in 2008.
On page 5 we have provided two lists of banks (one of Big Banks, the other community banks) with the most $ deposited in Jumbo CD accounts at their banks as of September 30, 2025. Many of them will be familiar to you from our rate pages, but not all.
Some of the big banks have different rates for different regions of the country. We won’t list any of these banks. 4-Star Bank of America, N.A., Charlotte, NC falls into this category.
Since 9/11, many banks require a physical presence to open an account, particularly a business account. We don’t have any of those listed either. Although, those that do accept consumer CDs may be found on the Personal Rate Page of our website.
There is another category of banks that do not necessarily want to be picked up by listing services. To avoid the bots, these banks offer only odd term CDs, like a 13-month instead of a 12-month. It works. We’re not bots, but we get the hint.
And, of course, we don’t list any with a Bauer star-rating less than 3½-Stars. Three banks on page 5 fall into this category. They are:
- 3-Star Flagstar Bk, NA, Hicksville, NY (32541);
- 3-Star EagleBank, Bethesda, MD (34742); and
- 2-Star Luana Savings Bank, Luana, IA (253).
(Luana SB was dropped from our rate pages in August 2021 after coming under scrutiny by the FDIC for unsafe and unsound practices. An Enforcement Action ensued in May 2022, which remains in place today.)
The other 47 banks listed on page 5 are all recommended by Bauer (rated either 5-Stars or 4-Stars). Not all are looking to grow their CD liability, however. In fact, 10 of them reduced that liability by more than 10% during the 12-month period ended 9/30/2025.
The three with the most robust year-over-year growth in their Jumbo CDs were:
- 3-Star EagleBank (above) which grew 62%;
- 5-Star Cadence Bank, Tupelo, MS (11813) with growth of 31.3%. (Cadence Bank is currently offering an 8-Month CD at 4.00% APY and a 13-Month at 3.75% APY.); and
- 4-Star Canandaigua NB&TC, NY (6985) with 29.6% growth. (As of December 17th, its CD rates were: 6-months @ 3.75%, 12-months @ 3.60% and 2-years @ 3.00%.)
