Community Banks Outpace Big National Banks on CD Rates by Nearly 1%

Event summary

  • As of March 9, 2026, community institutions with $1B–$10B in assets offer an average CD APY of 2.90%, while those under $500M–$1B offer 2.80%, compared to just 2.00% from national banks with $50B+ in assets.
  • For 12-month CDs, community institutions offer 2.72%–2.73% APY, while large national banks offer only 1.66%.
  • CD Valet's Ratewatcher report analyzed 40,000 CD rates from 5,000 banks and credit unions, finding 70% of recent rate changes were decreases.
  • Economic uncertainty ahead of the March FOMC meeting is prompting banks to hold steady on CD rates.

The big picture

The widening yield gap between community banks and national institutions reflects broader deposit competition dynamics. As economic uncertainty persists, smaller banks are leveraging higher CD rates to attract savers, while larger institutions may be hesitant to adjust rates ahead of potential Fed policy shifts. This trend underscores the strategic importance of rate agility in a fragmented banking landscape.

What we're watching

Rate Stability
Whether banks will maintain current CD rates ahead of the FOMC meeting, given mixed economic signals.
Deposit Shifts
How savers will respond to the yield gap between community banks and national institutions.
Competitive Positioning
The pace at which community banks capitalize on their rate advantage to attract deposits.