Best 2-Year CD Rates for July 2020 | Bankrate

Best 2-year CD rates — July 2020

Saturday, July 04, 2020

If you’re tired of low interest rates on some savings accounts and you won’t need to access your money for a while, it might be time to branch out and explore 2-year CDs.

With a fixed-rate CD, you receive a guaranteed interest rate for a set period of time. At the end of the term, you have the ability to renew the CD or shop around for another CD, potentially with an even higher yield if the interest rate environment has improved. After a CD’s maturity date, it often automatically renews after a grace period. This grace period is usually around seven to 10 days long.

You can think of CDs as a higher-paying savings account that’s stashed in a safe with a time lock. But unlike a savings account with a variable APY, a CD with a fixed APY won’t change during the term.

While you may be able to withdraw the interest before the end of the term, you usually can’t touch the principal without incurring an early withdrawal penalty.

Here are some of the top widely available 2-year CD rates. Compare these offers, then calculate how much interest you could earn when your CD matures.

The best 2-year CD rates for July 2020

Note: The APYs (Annual Percentage Yield) shown are as of July 1, 2020. Bankrate’s editorial team updates this information regularly. APYs may have changed since they were last updated. The APYs for some products may vary by region.

The higher interest rate comes because banks pay CD account holders a liquidity premium — the additional return an investor expects in exchange for giving up the ability to liquidate their investment quickly — in addition to their normal deposit rate.

The best 2-year CD rates pay around 2.5 times the national average of 0.43 percent APY, according to Bankrate’s most recent national index survey of banks and thrifts.

Today’s top widely available 2-year CD pays 1.25 percent APY. This may be a good place to invest for mid-term financial obligations, like paying off credit card debt.

Bankrate's guide to choosing the right CD rate

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Methodology for Bankrate's Best CD Rates

At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.

Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.

To find the best CDs, our editorial team analyzes various factors, such as: annual percentage yield (APY), the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by Federal Deposit Insurance Corp. (FDIC) banks or by the National Credit Union Share Insurance Fund (NCUA) at National Credit Union Administration (NCUA) credit unions.

When selecting the best CD for you, consider the purpose of the money and when you'll need access to these funds to help you avoid early withdrawal penalties.

Best 2-year CD rates of July 2020

Delta Community Credit Union – 1.25% APY; $1,000 minimum deposit

Delta Community Credit Union began as the Delta Employees Credit Union in 1940. It was started by eight Delta Air Lines employees. Delta Community Credit Union has more than 400,000 members and has 26 branches in metro Atlanta and three branches outside of Georgia.

First Internet Bank of Indiana – 1.16% APY; $1,000 minimum deposit for APY

First Internet Bank of Indiana was the first FDIC-insured financial institution to operate entirely online, according to the bank’s website. First Internet Bank of Indiana opened in 1999 and is available in all 50 states.

First Internet Bank offers eight terms of CDs, a money market savings account with a competitive yield, a savings account and two checking accounts.

Bank5 Connect – 1.15% APY; $500 minimum deposit

Bank5 Connect is a division of BankFive. Bank5 Connect has been around since 2013 and BankFive has a history dating back to 1855.

Bank5 Connect offers CDs, a savings account and a checking account.

SchoolsFirst Federal Credit Union – 1.15% APY; $20,000 minimum deposit for APY

SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. The credit union, created by school employees, has 50 branches.

SchoolsFirst Federal Credit Union has low minimum balances and CD terms from as short as 30 days to as long as five years. CDs at this credit union have four balance tiers: $500, $20,000, $50,000 or $100,000.

Quontic Bank – 1.11% APY; $500 minimum deposit

Quontic Bank was established in 2005 and has its headquarters in New York. Quontic Bank calls itself the Adaptive Digital Bank.

You only need $500 to open a Quontic Bank CD. Quontic Bank offers five terms of CDs, ranging from one year to five years.

In addition to its CDs, Quontic Bank also has a money market account, a High Yield Savings account and two checking accounts.

Marcus by Goldman Sachs – 1.10% APY; $500 minimum deposit

Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA. Marcus offers a variety of CDs, three no-penalty CD terms and a savings account. Marcus also offers lending options with its debt consolidation loans, home improvement loans and personal loans.

Marcus offers competitive yields on its savings accounts and CDs. Marcus made its debut in October 2016 with just unsecured personal loans before it began offering a savings account and CDs under the Marcus by Goldman Sachs brand in November 2017.

VyStar Credit Union – 1.10% APY; $500 minimum deposit

VyStar Credit Union was founded in 1952. It was originally called Jax Navy Federal Credit Union and it was chartered at Naval Air Station in Jacksonville, Florida.

Membership at VyStar Credit Union is open to anyone who works or lives in the 49 Florida counties or the four Georgia counties listed on its website.

VyStar Credit Union offers 10 CDs terms ranging from three months to five years. It also offers a one-year CD for Kid’s, VyTeen, Bravo and Achieve members only

Navy Federal Credit Union – 1.10% APY; $1,000 minimum deposit

Navy Federal Credit Union has more than 8.8 million members and is the world’s largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.

Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.

In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.

TIAA Bank – 1.10% APY; $5,000 deposit to open

TIAA Bank is a division of TIAA, FSB. TIAA Bank has 10 financial centers, all located in Florida.

Besides its TIAA Bank CD, TIAA Bank also offers a Yield Pledge Checking account, a Yield Pledge Money Market and other products. TIAA Bank’s CDs require $5,000 to open one. TIAA Bank also offers IRA-eligible CDs.

2-year CD yields offered by popular banks – July 2020

Discover Bank – 1.01% APY; $2,500 minimum deposit

Discover Bank may be known for its credit cards. But it also offers a wide selection of banking products. It has been offering deposit products online since 2007.

Discover Bank offers CDs ranging in terms as short as three months and up to 10 years.

It also offers a checking account, money market account and a savings account.

Synchrony Bank – 1.00% APY; $2,000 minimum deposit

Synchrony Bank offers competitive yields across 12 terms. All standard CD terms typically offered by banks and credit unions are available. The bank also offers a savings account and a money market account. The savings account has a competitive APY and has no minimum balance requirement.

The bank is an online-only financial institution that’s part of a company that also issues credit cards. The bank’s relatively new mobile app makes it possible to transfer funds and check account balances at any time from anywhere.

BMO Harris Bank – 1.00% APY; $5,000 minimum deposit for APY

BMO Harris has both a regional presence and offers online accounts. The bank operates more than 500 branches in Arizona, Florida, Illinois, Indiana, Kansas, Minnesota, Missouri and Wisconsin. Its headquarters is located in Chicago. There is only a $1,000 minimum balance required to open a BMO Harris one-year CD. However, you’ll want to put at least $5,000 into the CD to get a much more competitive yield.

Amerant Bank – 0.95% APY; $10,000 minimum deposit

Amerant Bank has 26 banking centers – 18 in South Florida and eight in Houston. Though the Amerant Bank CD yields mentioned here aren’t available in Florida and Texas.

Amerant Bank does require a $10,000 minimum balance to earn this APY on a CD. So this may not be the right CD for you if you’re just starting to save.

Best CD rates by term

In general, you’ll find the best CD rates on longer-term CDs. Banks reward consumers for committing their money for deposit. With a five-year CD, for example, you usually end up with a higher yield than what’s available for a two-year CD.

However, when you get a five-year CD, you’re locking that money up for five years. If you access the money before the maturity date, you’ll probably pay an early-withdrawal penalty, making the CD less valuable. Only purchase a longer-term CD if you’re sure you won’t need the money before the term ends.

CD laddering can help you take advantage from higher rates while also ensuring earlier access to some of your money. You can also determine whether it makes sense to get a higher yield in return for reducing your liquidity.

Building a CD ladder

In addition to helping you meet your mid-term financial goals, two-year CDs can be used as a “rung” when you’re building a CD ladder.

Done correctly, laddering allows you to benefit from high rates on longer maturities while still getting regular infusions of cash to spend or reinvest.

With a CD ladder, you divide your deposit amount into CDs with different terms. For example, you could open a three-rung ladder made up of a one-year CD, a two-year CD and a three-year CD. The one-year and two-year CD rates are generally lower than the three-year CD rates, but you might not want all of your money tied up for three years.

A laddering strategy allows you to take advantage of the higher interest rates you earn on longer-term CDs, while still allowing you access to some of your money at regular intervals. As your one-year and two-year CDs mature, you can access that money for spending or investing in higher-yield assets. Or, you can put them in another three-year CD, and it would become the longest-term rung on your CD ladder.

Carefully consider how a two-year CD can fit into a ladder strategy that combines the benefits of a higher overall yield while still allowing you some access to a portion of your funds when the shorter-term CDs mature.

The 9 best 2-year CD rates in July 2020

Institution APY Minimum to earn APY
Delta Community Credit Union 1.25% $1,000
First Internet Bank of Indiana 1.16% $1,000
Bank5 Connect 1.15% $500
SchoolsFirst Federal Credit Union 1.15% $20,000
Quontic Bank 1.11% $500
Marcus by Goldman Sachs 1.10% $500
VyStar Credit Union 1.10% $500
Navy Federal Credit Union 1.10% $1,000
TIAA Bank 1.10% $5,000

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