Fed Hike Lifts Cash Benchmarks, but Deposit Banks Haven’t Fully Caught Up

Executive summary. The rate backdrop has turned upward after the Federal Reserve’s September 16 quarter-point hike. Effective fed funds is now 3.88%, SOFR is 3.85%, prime has moved to 7.00%, and Treasury yields remain elevated, with the latest September 21 market readings around 4.76% for 2-year, 4.83% for 5-year and 4.96% for 10-year Treasuries. Mortgage borrowers are feeling the same pressure: the latest Freddie Mac survey put the 30-year fixed mortgage at 6.95%, up 19 basis points week over week.

Rate Environment

Borrowing rates are rising; deposit rates are mixed rather than rising across the board. The Fed's hike immediately lifted overnight benchmarks and prime, while longer Treasury yields remain close to 5%. OnlineBankRates now has exact-comparable observations for part of its panel, but not enough history to characterize the entire deposit market.

That distinction matters: benchmark rates have clearly moved higher, but banks do not have to pass those increases through to depositors immediately.

Today's Numbers

Benchmark	Latest
Effective Fed Funds	3.88%
SOFR	3.85%
Bank Prime	7.00%
2-Year Treasury	4.76%
5-Year Treasury	4.83%
10-Year Treasury	4.96%
30-Year Fixed Mortgage	6.95%
OBR Savings Index*	3.73% APY
OBR 12-Month CD Index*	3.97% APY
Best OBR Liquid Savings	4.20% APY
Best OBR Money Market	4.05% APY
Best OBR CD Observed	4.40% APY

The Fed's latest H.15 release confirms effective fed funds at 3.88% following the September hike; SOFR's latest available observation is 3.85%. Treasury's September 21 curve was approximately 4.76%/4.83%/4.96% at 2/5/10 years. Prime is now 7.00% at major banks following the Fed move.

Biggest Moves

One exact-comparable bank-level increase is verified today: CFG Bank's High Yield Money Market Online rose from 3.80% to 4.05% APY, an increase of 25 basis points. The file also contains 26 unchanged exact-comparable observations, seven newly verified Marcus CD products and 13 baseline observations.

These comparisons cover only the products observed on consecutive runs. They do not yet support a broad claim that deposit rates rose across the market.

• Increases: 1 verified
• Cuts: 0 verified
• Unchanged: 26 verified
• Newly verified products: 7
• New baseline observations: 13
• 7-day Bank Rate Breadth: awaiting sufficient comparable history

OnlineBankRates will not infer bank-rate movements simply because the Fed moved.

Where Savers Are Winning

Within the current Bank Verified universe, the strongest broadly applicable liquid savings rate is 4.20% APY, while the strongest money-market observation is 4.05% APY. The strongest currently captured CD rate is 4.40% APY, with competitive offers clustered across intermediate and longer maturities.

The interesting comparison today is against Treasuries. A 2-year Treasury around 4.76% and 5-year around 4.83% currently exceed even the best CD in the present OnlineBankRates crawl.

That makes today's cash market unusually competitive across bank deposits and government securities, rather than CDs automatically dominating longer lockups.

Borrower Watch

Borrowers are facing materially tighter conditions.

The Fed raised its target range to 3.75%–4.00%, and major banks subsequently increased prime from 6.75% to 7.00%. That affects floating-rate borrowing tied directly or indirectly to prime.

Mortgage rates have also moved higher. Freddie Mac's latest survey shows the 30-year fixed mortgage averaging 6.95% on September 17, versus 6.76% one week earlier — a 19-basis-point weekly increase.

The 30-year mortgage therefore sits roughly 199 basis points above the September 21 10-year Treasury yield of 4.96%. That spread remains an important indicator of how much mortgage borrowers are paying above the government's benchmark borrowing rate.

Yield Curve / CD Strategy

The curve currently rewards duration more than many bank CDs do.

September 21 Treasury yields were approximately:

1 year: 4.45% → 2 years: 4.76% → 5 years: 4.83% → 10 years: 4.96%.

By comparison, the current OnlineBankRates dataset produces a 3.97% average of the best observed 12-month CD rate at each institution for which a comparable 12-month product exists, while the strongest observed CD reaches 4.40%.

That means consumers comparing a CD with a Treasury should compare yield, liquidity, early-withdrawal restrictions, deposit insurance, taxes and maturity, rather than assuming a CD necessarily offers the highest nominal yield.

Bank Behavior

The current database confirms a large dispersion between competitive online-oriented deposit institutions and ordinary bank deposit pricing, but the dataset isn't yet broad enough across large traditional banks to publish a statistically responsible Online-vs-National Bank Premium.

The same limitation applies to identifying which bank category is changing rates fastest. That requires consecutive observations from a sufficiently broad panel.

The useful signal today is therefore dispersion, not breadth: competitive deposit institutions are offering yields near or above 4%, while the market benchmark environment itself has moved materially higher.

OnlineBankRates Takeaway

The Fed has changed the rate equation again. Overnight benchmarks moved higher almost immediately after the September rate increase, prime is now 7%, Treasury yields are approaching 5% across several maturities, and mortgage rates have climbed back toward 7%. For savers, however, the important question isn't simply whether the Fed raised rates — it's whether your bank passes that increase along. The best accounts in the current OnlineBankRates database are paying around 4% APY, but Treasuries currently offer more at several maturities. Shop across both, compare liquidity and restrictions, and don't assume your current bank will adjust automatically.

OnlineBankRates Proprietary Dashboard

Metric	Reading	Status
OBR Savings Index	3.73%	Baseline
OBR 12-Month CD Index	3.97%	Baseline
Best Cash Yield	4.20%	Broadly applicable bank savings universe
Bank Rate Breadth	1 increase / 0 cuts / 26 unchanged	Partial consecutive panel
Fed Pass-Through Score	—	Awaiting broader post-hike history
Online-vs-National Premium	—	Sample not yet sufficiently balanced

Methodology. The Savings Index is the simple average of each institution's highest broadly applicable savings APY currently captured by OnlineBankRates, rather than averaging every balance tier as though each were a separate bank. The CD Index uses each institution's best captured 12-month CD or certificate observation. Best Cash Yield is the highest currently captured broadly applicable liquid savings APY. These are OnlineBankRates calculations, not national averages.

Data Coverage

The latest organic dataset contains 20 institutions and 216 Bank Verified observations, sourced from institution-owned public rate pages rather than copied from rate aggregators. The September 22 run appended 47 observations across six institutions, including two institutions not represented in the prior 18-bank baseline.

Data disclosure: Institution-level figures come from OnlineBankRates' independently collected first-party dataset. Benchmark figures come from Federal Reserve, Treasury-market and Freddie Mac data. Rates may change without notice; APY eligibility, balance requirements and geographic restrictions can vary by institution.