| North Palm Beach, Fla. -- Nov. 27, 2009 (Bankrate.com) -- The average yield for a 2-year CD in the United States fell 1 basis point to 1.91 percent on Friday, according to Bankrate.com's daily Your Best Interest report.A basis point is one-hundredth of a percent.
A 2-year CD (certificate of deposit) is a time deposit, FDIC-insured to $100,000 per person ($250,000 on retirement accounts), with a fixed maturity date of two years. It usually pays higher interest than a savings account and a penalty is charged for withdrawing funds before the maturity date. The highest rate on a 2-year CD nationally is 2.75 percent, with an annual percentage yield of 2.79 percent. Six months ago, the average yield was 2.13 percent. The yield on a CD is higher than the rate because the yield takes compounding into account. Of the 13,503 institutions that Bankrate surveys nationally that sell 2-year CDs, 9,777 institutions offer daily compounding, 2,503 institutions offer monthly compounding and 1,059 institutions offer quarterly compounding. For consumers, more-frequent compounding produces a higher total yield. Institutions also have different minimum deposit requirements. Bankrate's survey found the minimum for a 2-year CD ranged from $0.00 to $25,000.00. Some institutions sell their CDs only in their local market; others sell CDs nationwide. Click here to see the 100 highest yields on a variety of CDs available nationally. To see all of the results of Bankrate.com's surveys, go to www.bankrate.com. The Your Best Interest report is a daily service of Bankrate.com, a financial news and information service based in North Palm Beach, Fla. Bankrate surveys more than 300 financial products from more than 4,800 institutions in all 50 states. |