How to check whether rates have fallen since you last looked

Interest rates drop when the Federal Reserve lowers its benchmark rate, which usually happens during a meeting of its policy committee. When that happens, banks typically lower the rates they offer on savings accounts, money market accounts, and certificates of deposit within days or weeks. The easiest way to see if rates have dropped is to compare what your bank is currently offering to what you saw the last time you checked—or to what you're seeing at other banks right now.

You can find current rates on your bank's website under savings products, or by calling their customer service line. If you opened an account months ago, the rate you're earning now may be lower than the rate you locked in then, especially if the Fed has cut rates since you opened it. Some accounts have fixed rates that don't change; others have variable rates that move with the Fed's decisions.

Key Takeaways

  • The Federal Reserve sets a benchmark rate, and when it drops, banks usually lower the rates they pay on savings within one to three weeks.
  • You can see current rates on your bank's website or by calling; compare them to what you were earning before to spot a drop.
  • Fixed-rate accounts keep the same rate for their full term, while variable-rate savings accounts move up and down with Fed decisions.
  • A rate drop means your money earns less interest going forward, so it may be worth moving savings to a bank offering higher rates.

Where to find your bank's current rates

Log into your online banking account and look for the savings or deposit section. Most banks display the current annual percentage yield (APY) for each account type right on that page. If you can't find it online, call your bank's customer service number—it's usually on the back of your debit card or on your monthly statement.

Write down the rate you see today. Then compare it to the rate you were earning when you opened the account. You can find your original rate on your account opening documents or in your email confirmation from when you signed up. If the new number is lower, rates have dropped for you.

Why your rate might have dropped even if the Fed hasn't cut

Banks can lower rates on existing accounts without any Fed action. They do this when they have enough deposits and don't need to attract new customers with high rates. A rate drop at your bank doesn't always mean the Fed moved—it might just mean your bank decided to reduce what it pays.

This is why it's worth checking rates at other banks too. If your bank dropped its rate but competitors are still offering higher rates, you may want to move your money. You can open a new account at another bank and transfer your savings without penalty.

The difference between fixed and variable rates

A fixed-rate account, like most certificates of deposit (CDs), locks in one rate for the full term. If you opened a one-year CD at 4.5% APY, you'll earn 4.5% for the entire year, even if the Fed cuts rates next month. Your rate won't drop.

A variable-rate account, like a regular savings account or money market account, can change at any time. When the Fed cuts rates, your bank usually cuts the rate on these accounts within a few weeks. If you're in a variable account and rates drop, your earnings will go down.

What a rate drop means for your savings

When rates drop, the interest you earn on the same balance gets smaller. If you had $10,000 earning 4.5% APY and your bank drops the rate to 3.5% APY, you'll earn about $100 less per year on that money. The longer rates stay low, the more interest you miss out on.

This is why some people move their savings when rates drop. If your current bank's rate falls below what other banks are offering, you can open an account elsewhere and earn more. There's no penalty for moving money out of a regular savings account—only CDs charge early withdrawal fees.

How to respond if your rate has dropped

First, check what other banks are offering. Visit the websites of online banks, credit unions, and large national banks to see their current rates. If you find a higher rate elsewhere, you can open a new account and transfer your money. The process usually takes three to five business days.

If you're in a CD, you have fewer options. You can't move the money without paying an early withdrawal penalty, which usually costs you some of the interest you've earned. It's usually worth staying in the CD unless the rate drop is very large and you won't need the money soon. When the CD matures, you can move it to a higher-rate account at another bank.

Understanding when the Fed actually cuts rates

The Federal Reserve meets eight times per year to decide on interest rates. You can find the dates of these meetings on the Federal Reserve's website. When the Fed cuts its benchmark rate, financial news outlets report it immediately, and banks usually adjust their rates within one to three weeks.

If you want to know whether a rate drop at your bank is due to a Fed cut or just the bank's own decision, check the news around the time your rate changed. If the Fed cut rates on that date, the drop is likely connected. If there was no Fed action, your bank lowered rates on its own.

Frequently Asked Questions

Can my bank lower my rate without telling me?

Yes. Banks can change variable rates without notice, though most send an email or letter before the change takes effect. Check your account regularly or set up rate alerts on your bank's website to catch drops early. Fixed-rate accounts like CDs cannot be lowered before maturity.

If rates drop, should I move my money to another bank?

Only if another bank is offering a meaningfully higher rate. Moving money takes time and effort, and the difference has to be worth it. If your rate dropped from 4.5% to 4.0% but no other bank offers more than 4.1%, the move probably isn't worth the hassle.

What's the difference between APY and interest rate?

APY (annual percentage yield) includes the effect of compounding—interest earned on your interest. The interest rate is the base percentage. APY is always equal to or higher than the interest rate, so always compare APY numbers when looking at different banks.

Do I lose money if my savings rate drops?

No, you don't lose what you already have. Your balance stays the same. You just earn less interest going forward. If you had $10,000 and your rate dropped, you still have $10,000—you're just earning less on it each month.

How often do banks change their rates?

Banks can change variable rates whenever they want, though most change them after Fed meetings. Some banks adjust rates weekly or monthly based on market conditions. Fixed-rate accounts don't change until they mature and you renew them.