When interest rates rise, short-term market rates generally face upward pressure, but your savings account APY or bank money market rate may not rise immediately—or by the same amount. CDs can lock in a disclosed fixed rate for a term, while money market mutual fund yields change over time and are not guaranteed. The details depend on which product you hold and its terms.
How a Federal Reserve rate increase reaches cash products
The Federal Reserve uses interest on reserve balances to help implement monetary policy and move the federal-funds rate into its target range. It says an increase in that rate “will put upward pressure on a range of short-term interest rates.” That creates a market backdrop in which rates on some savings products and short-term investments may rise. It does not require a bank to raise a customer’s rate, match the policy move, or do so on a particular schedule. Federal Reserve explanation of interest on reserve balances
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What happens to each type of account or fund
| Product | How its rate or yield behaves | Access and term | Protection and risk | What to check |
|---|---|---|---|---|
| Savings account | Typically variable; the bank sets the offered rate. | Generally liquid, subject to account terms. | Eligible deposits at insured institutions are covered within applicable legal limits. | APY, fees, minimums, withdrawal terms, and insurance status. |
| Money market deposit account | Typically variable; the bank sets the offered rate. | No fixed CD-style maturity; check the account terms. | A bank deposit, distinct from a mutual fund; eligible deposits are covered within applicable legal limits. | APY, balance tiers, fees, transaction terms, and insurance status. |
| Certificate of deposit (CD) | May be fixed or variable, as stated in the disclosure. | Funds are held for a stated maturity; early withdrawal may incur a penalty. | Eligible bank CD deposits are covered within applicable insurance limits. | APY, rate type, term, maturity, early-withdrawal penalty, issuer, and insurance. |
| Money market mutual fund | Yield changes over time and generally reflects short-term rates. | Fund-share redemption terms, fees, and liquidity provisions apply. | An investment, not FDIC-insured; investors can lose money. | Current yield, expenses, portfolio, fund type, NAV, and redemption terms. |
Savings accounts and bank money market deposit accounts
These are deposit products, not investments in mutual funds. Their rates and terms are set by the financial institution and can vary by account, balance tier, and other conditions. A bank may raise a variable APY as market rates rise, but it may also move later, by less, or not at all. Review the account’s APY, fees, minimum balance, and access rules rather than assuming the Federal Reserve’s move will pass through to your account.
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A money market deposit account has no designated holding term like a CD, according to the FDIC, though the account’s own transaction and access terms still matter. Banks must disclose rates, fees, and terms under the Truth in Savings Act. FDIC guide to deposit accounts
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Certificates of deposit
A CD holds a fixed amount for a stated period. Its disclosure should identify whether the rate is fixed or variable, the maturity date, when and how interest is paid, and any early-withdrawal penalty. A fixed-rate CD can preserve its stated rate during its term, which offers certainty if market rates fall. If rates rise after you open it, however, that same commitment can leave your money earning less than a newer CD until maturity; withdrawing early may cost interest. Investor.gov guide to CDs
Money market mutual funds
A money market mutual fund is an investment fund that holds high-quality, short-term debt securities. Its dividends generally reflect short-term interest rates, so its yield can change over time as the fund’s holdings and market conditions change. It is not the same as a bank money market deposit account and is not FDIC-insured. Investors can lose money.
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A fund may seek to maintain a stable net asset value, typically $1 per share, but that goal is not a guarantee. Fees reduce returns, and longer-term securities can decline in value when rates rise, affecting the fund. Do not treat a mutual fund yield as a guaranteed deposit rate or assume it will rise one-for-one with a Federal Reserve move. SEC bulletin on money market funds
A dated national-rate reference point
The FDIC’s national-rate table reported the following averages on March 16, 2026. These are national averages, not the best available offers, a particular customer’s rate, or a forecast. The FDIC bases savings rates on a $2,500 product tier and money market and CD rates on the average of the $10,000 and $100,000 product tiers. FDIC national rates
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| Product | FDIC national average on March 16, 2026 |
|---|---|
| Savings account | 0.39% |
| Money market deposit account | 0.56% |
| Six-month CD | 1.47% |
| Twelve-month CD | 1.52% |
How to compare options when rates are rising
- Identify the product. Confirm whether “money market” means a bank deposit account or a mutual fund; their protections and risks differ.
- Compare the return on its own terms. For deposits, check APY, fees, minimum balance, and any balance tiers. For a fund, check current yield and expenses, remembering that yield can change.
- Match access to your timeline. Savings and bank money market deposit accounts do not have a CD-style maturity, but their access terms vary. For a CD, compare the maturity date with when you need the money and read the early-withdrawal penalty.
- Check protection and issuer. Verify that a bank is an insured institution and consider how deposit ownership and balances affect applicable insurance limits. A money market mutual fund is an investment and is not an FDIC-insured deposit.
- For a CD, weigh certainty against flexibility. A fixed rate protects the rate during the term, but may not keep pace with higher offers that appear before maturity. A variable-rate CD follows its disclosure rather than automatically matching every market move.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
