Fed Rate Cut: How It Affects Your Bank Accounts, Loans, Credit Cards, And Investments
Fed Rate Cut: How It Affects Your Bank Accounts, Loans, Credit Cards, And Investments
Hal Bundrick, CFP® Yahoo Personal Finance September 17, 2025
Finally. The Federal Reserve delivered a long-awaited quarter-point rate cut on Sept. 17.
Wall Street expects two more rate cuts at both of the Fed's next meetings before the end of the year.
Here's how the long-running interest rate pause has impacted deposits, credit, and debt so far. And what a rate cut could do for — or to — your money.
How a Fed rate cut affects checking and savings accounts
2025 has been a year of modest earnings on deposit accounts. A rate cut won't help.
Checking accounts
Your checking account is a money-in-motion machine. The convenience of liquidity limits your earning power.
The national average of interest paid on checking accounts has barely budged much this year and remains at 0.07%. Imagine that moving even lower. Is it possible? Yes.
Savings accounts
Interest rates on savings accounts are only marginally better and are up a fraction to 0.40%. But savings accounts are for near-term money.
High-yield savings accounts have been more effective interest payers. Rates are still barely clinging to 4%, with some financial providers slightly above or below that.
This is one category where rate shopping really pays off. Especially as interest rates move lower.
Money market accounts
If you have $10,000 or more that you want to keep on the sidelines but are ready to put in play, money market accounts have been convenient — but low-paying. National average payouts remain at 0.59%.
A better option might be a high-yield money market account, where interest rates are still near or a little better than 4%.
What a rate cut does to CDs
CD rates have crept slightly higher in the last month or so. A 12-month CD is averaging 1.70%, but you can find better deals if you're willing to take the time to hunt them down — and move your money online.
Your minimum deposit and term will affect your rate.
What a rate cut will mean for mortgages and personal loans
Home mortgages