As we approach January 2026, financial experts are painting a nuanced picture for certificate of deposit (CD) rates, offering critical insights for cautious investors navigating an evolving economic landscape.

The Federal Reserve's recent rate cuts have set the stage for potential changes in the CD market, with banking professionals predicting a gradual softening of rates that still maintains attractive returns compared to historical averages.

Amanda Erebia, director of retail banking at Amegy Bank, emphasizes that deposit yields typically follow the Fed's benchmark rate with a slight delay. 'The Fed cut rates several times in late 2025, signaling a cautious path ahead,' Erebia explains, suggesting savers should anticipate modest adjustments in CD annual percentage yields (APYs) over the coming months.

Experts like A'Jha Tucker from Georgia's Own Credit Union believe the anticipated rate changes will be measured. 'A steep drop would require the Federal Reserve to cut rates faster or more aggressively than anticipated,' Tucker notes, 'which isn't the current economic consensus.'

Interestingly, longer-term CDs – those 12 months or longer – may demonstrate more resilience. Mary Grace Roske from CDValet.com points out that banks have strategic reasons for maintaining competitive rates on these products. 'Bank funding needs matter more than many savers realize,' Roske explains, highlighting that these CDs provide crucial funds for mortgages and other profit-generating financial products.

The latest inflation data supports these predictions, with rates dropping from 3% in September to 2.7% in November. This trajectory suggests a 'continued, measured easing' rather than dramatic fluctuations, according to Erebia.

For investors, the message is clear: while CD rates are expected to trend slightly lower in 2026, the decline should be gradual. Savers are advised to stay informed, monitor economic indicators, and consider their individual financial goals when making investment decisions.