Two-year CDs typically earn a competitive annual percentage yield, so they may be a good option for someone saving money for an event or purchase that’s two years out, like a down payment for a house or maybe a wedding.
We review more than 150 banks and credit unions to find the best rates available nationwide for 2-year CDs. We track APYs and re-order and re-evaluate the list every weekday. All accounts are available to the public and are insured by either the Federal Deposit Insurance Corp. or the National Credit Union Administration.
For this list, we considered products that lock in deposits for 21 to 29 months and chose the best. Our rankings are based primarily on the best APY, but in the case of a tie, we look at the CD with the shortest term, and then the lowest minimum deposit required to earn the APY. From there, we compare the penalties for early withdrawal. Here are the best CD rates for 2-year terms as of July 8, 2020.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and updating them accordingly.
Best 2-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Pen Air Federal Credit Union||1.40%||$500||6 months of interest|
|BankDirect||1.26%||$10,000||6 months of interest|
|Georgia's Own Credit Union||1.25%||$500||6 months of interest|
|Bank of Baroda (2 years to less than 3 years)||1.25%||$1,000||1% of the interest rate|
|CommunityWide Federal Credit Union||1.25%||$1,000||Complex formula; exercise caution|
|MAC Federal Credit Union||1.25%||$1,000||3 months of interest|
|State Department Federal Credit Union||1.21%||$500||All interest up to 6 months|
|Mills42 Federal Credit Union||1.20%||$500||3 months of interest|
|Signature Federal Credit Union||1.20%||$500||12 months of interest|
|Bank5 Connect||1.15%||$500||6 months of interest|
|Dow Chemical Employees' Credit Union||1.15%||$500||6 months of interest|
Here are details about the institutions on our list.
It may be easier to join Pen Air Federal than some of the other credit unions on this list since all you need is to join the Friends of Navy Marine Corps Relief Society if you don’t have the other affiliations listed on the Pen Air website. Pen Air will even make a $1 donation to the organization for you. You’ll also need to make a $25 deposit in a savings account to join.
Founded in 1936, Pen Air Federal Credit Union is the largest and oldest local credit union in Pensacola, Florida. While there are only 15 locations in Northwest Florida and Southeast Alabama, there are more than 109,000 members nationwide.
In addition to CDs ranging in terms from three months to five years, personal and business savings, checking, and various accounts and lending products also are available.
BankDirect is an online-only division of Texas Capital Bank focused on digital banking products. It launched in 1999 and offers checking, savings, and money market accounts. CDs are available in terms ranging from three months to five years. While its CD rate is high enough to land it on this list, its savings rate leaves a lot to be desired.
Based out of Atlanta, Georgia’s Own Credit Union has been around since 1934 and has about 200,000 members and $2 billion in assets as of July 2020. While living in certain parts of Georgia is one way to qualify for membership, you also can join by first becoming a member of the Getting Ahead Association for $5 or Georgia’s Own Foundation for $10. As with most other credit unions, you’ll also need to keep at least $5 in a savings account in order to keep your membership active.
The Bank of Baroda probably isn’t a name you’ve heard of before. That’s because it’s a multinational bank originating in India, and its primary business is in helping Indian expats send money back to their home country. Bank of Baroda only dips its toes in the deposit accounts world by offering business bank accounts and personal CDs.
CommunityWide Federal Credit Union was founded in 1967 and is based in northern Indiana. If you don’t live in the area or meet its residency-based membership criteria, you easily can join by becoming a member of the Marine Corps League of St. Joseph Valley which starts at $15 per year. You must deposit $5 in savings. It’s also part of the CO-OP shared branching network.
MAC Federal Credit Union offers members financial products like checking, savings, and money market accounts, credit cards, insurance, and more. Originally founded in 1952 to serve the active duty and civil service personnel in Fort Wainwright, Alaska, the credit union is now open to anyone who purchases a two-year membership for $40 to the Association of the United States Army. When applying for the membership, just change the chapter to the Polar Bear Chapter in Fort Wainwright, Alaska.
Eight U.S. State Department employees helped launch State Department Federal Credit Union in 1935. Headquartered in Old Town Alexandria, Virginia, the credit union offers membership to anyone associated with dozens of partner organizations, in addition to State Department employees. As of July 2020, the credit union boasted more than 86,000 members and $1.9 billion in assets.
Mills42 FCU takes its name from the 42nd latitude line running through Lowell, Massachusetts, the credit union’s headquarters. Founded in 1958 to serve a local manufacturing company, Mills42 membership is now available to anybody who makes a $5 donation to either Mothers Against Drunk Driving (MADD) or Tewksbury Historical Society. You’ll also need to put $25 into a savings account to be eligible.
Mills42 FCU offers a wide range of financial services and products, including CDs, checking accounts, savings accounts, loans, and credit cards. Members can bank at the credit union’s one branch, online, or at thousands of CO-OP shared branches.
Signature Federal Credit Union opened in 1970 and is based in Virginia, but its membership in the CO-OP network allows you to carry out transactions at any of its shared branches or service centers. In addition to CDs with 3-month to 5-year terms, the credit union offers checking, savings, and money market accounts, as well as loans. To become a member and get any of these products, you must be sponsored by a current member or join any of more than two dozen organizations. You’ll also need to make a $5 deposit into a savings account.
Bank5 Connect is an online-only division of Massachusetts-based BankFive. While BankFive has been in business since 1855 and has 16 locations in Massachusetts and Rhode Island, Bank5 Connect opened in 2013 and serves customers nationwide. In addition to CDs, Bank5 Connect offers checking and savings accounts.
Based in Midland, Michigan, Dow Chemical Employees’ Credit Union was founded in 1937 and has more than 69,000 members and $1.8 billion in assets. Membership is available to employees of Dow Chemical, Dow Corning, and their affiliates, as well as to members of the Midland Country Club and Great Lakes Loons Founders Club. Additionally, employees of more than 70 other businesses and organizations are eligible.
In addition to CDs, the credit union provides options for checking, savings, and multiple lending options.
What Is a 2-Year CD?
If you’re looking for a fixed interest rate product to help grow your savings, a certificate of deposit (CD)—also known as a share certificate at credit unions—can provide more favorable and predictable earnings than you’d get in a regular savings account. The catch is that account holders have to make the deposit and leave it untouched for a set term. With a 2-year CD, you must leave your deposit untouched for two years. At the end of the term, the full interest that accrued is added to the original deposit. You may then make a withdrawal within a specified window or decide to renew or open a new CD.
If you don’t want to tie up your money for a full 24 months, you may be able to select a shorter-term CD or certificate product at another bank or credit union. Terms may range from 21 to 29 months, which may better suit your financial goals.
Who Is a 2-Year CD Best For?
A 2-year CD is appropriate for anyone who wants to put a chunk of savings to work for them. Since the APY is fixed and can be higher than what you’d get with a savings account, you can calculate exactly how much you’ll earn.
Be mindful that you can’t touch that money for the full 2-year term without being penalized and losing part of the interest you’ve earned.
Some scenarios that might be a good fit for a 2-year CD include if you’re saving up for a large purchase like a home or bucket-list trip. The CD may help ensure that you won’t spend that money, plus give you a few more bucks on top of the principal balance.
While longer-term CDs usually have higher APYs, a 2-year term offers a sweet spot in which you’re earning good rates but don’t have to give up access to your funds for a longer period of time. It’s also a product to consider if you’re using a CD ladder strategy, in which you purchase CDs of varying lengths so as not to lock down all of your money in a single long-term account.
What Are the Alternatives to a 2-Year CD?
For a short-term savings strategy, a 2-year CD may be a good solution (assuming two years isn’t too far off for you). Before opening any type of account that essentially ties up your assets, it’s smart to consider your personal finance goals and whether you can live without access to those funds for a set period of time.
Explore Different CD Terms
If you’re leaning toward a CD, look at APYs and other terms to decide if a shorter or longer-term might work better for you. Shorter-term CDs allow you to touch your money again sooner but may not earn as much as their long-term siblings.
High-Yield Savings Accounts
If the thought of tying up your money stresses you out, an online savings account may be a better fit. Some APYs are in line or close to what you’ll find among 2-year CD APYs. However, just note that savings account rates are variable, so you don’t have that fixed-rate assurance. On the other hand, if you don’t have the discipline to stay away from dipping into a savings account, a CD might help.
If you prefer instant account access, we have partnered with the following banks to bring you the high-yield savings and money market account offers displayed in the table.