If you’re tired of low interest rates on 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 CD, you receive a guaranteed interest rate for a set period of time. At the end of the term, you have the ability to buy another CD, potentially with an even higher yield if the interest rate environment has improved.

You can think of CDs as a higher-paying savings account that’s stashed in a safe with a time lock. While you may be able to withdraw the interest before the end of the term, you can’t touch the principal without incurring an early withdrawal penalty.

Here are the top nationally 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 January 2020

  • MAC Federal Credit Union: 2.40% APY; $1,000 minimum deposit
  • Advancial Federal Credit Union: 2.30% APY; $25,000 minimum deposit
  • Garden Savings Federal Credit Union: 2.27% APY; $500 minimum deposit
  • Pen Air Federal Credit Union: 2.25% APY; $500 minimum deposit
  • Dover Federal Credit Union: 2.22% APY; $25,000 minimum deposit

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 more than 2.5 times the national average of 0.87 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.

Today’s top nationally available 2-year CDs pay 2.40 percent APY. This may be a good place to invest for mid-term financial obligations, like paying off credit card debt.

Compare: Best 2-year CD rates

MAC Federal Credit Union – 2.40% APY, $1,000 minimum deposit

The credit union offers today’s best 2-year CD yield. A relatively low minimum deposit is required to open an account. Share certificates are available as IRAs. Money market and kids accounts are also available.

The credit union was originally founded as Tanana Valley Federal Credit Union and chartered in 1952. MAC Federal Credit Union is based in Fairbanks, Alaska. Membership is open to local students and residents and those who join the AUSA Polar Bear Chapter.

Advancial Federal Credit Union – 2.30% APY, $25,000 minimum to earn APY

Advancial Federal Credit Union consistently offers some of the highest yields available for credit union members interested in short-term share certificates. Terms range from three months to five years and members are rewarded with higher yields for larger deposits.

You’ll need at least $50,000 to earn the top yields at the credit union. But you’ll still earn a relatively impressive yield if you have at least $25,000 to deposit. In addition to regular share certificates, the credit union offers an add-on certificate that allows multiple deposits. The certificate can also potentially be used as collateral to secure a loan.

Advancial has been around since 1937 and is based in Dallas. Membership applications are available online and paper applications can be downloaded and printed. Membership is open to employees and individuals associated with specific groups and organizations in addition to locals who live, work or worship in certain parts of Louisiana. It’s also possible to qualify for membership by joining the Connex Professional Network and paying a $5 fee.

Garden Savings Federal Credit Union – 2.27% APY, $500 minimum deposit

There’s a reason why the 3-year CD at Garden Savings Federal Credit Union ranks as one of the best nationally available accounts: the yield is higher than what’s available at most banks, especially now since the Federal Reserve cut interest rates several times in 2019.

The credit union was originally founded in 1968 to serve the employees of AT&T Bell Laboratories. The institution currently serves more than 25,000 members, including customers near their headquarters in Parsippany, New Jersey. Membership is open to employees of select companies, local residents and others who worship and live in the surrounding communities. For others, the easiest way to join is through the American Consumer Council.

Pen Air Federal Credit Union – 2.25% APY, $500 minimum deposit

Founded in 1936, Pen Air Federal Credit Union is the largest and oldest local credit union in Pensacola, Florida with 15 locations in Florida and Alabama. Its CDs are available nationwide.

Membership is open to anyone who asks the bank to make a $3 donation on their behalf to the Friends of the Navy-Marine Corps Relief Society.

Dover Federal Credit Union – 2.22% APY, $25,000 minimum to earn APY

Dover Federal Credit Union offers CDs ranging from six months to five years. Most CDs can be opened with just $500, making them more accessible to those without much in terms of savings. Members who deposit more money, however, can earn a higher yield. What’s more, the early withdrawal penalty for CDs with longer terms is less harsh than what you’ll find at other institutions. For withdrawals made on certificates maturing in more than a year, the penalty is equal to 180 days worth of dividends.

The credit union is based in Dover, Delaware and offers membership to employees and retirees of local businesses, volunteers and local military personnel. Others can easily qualify for membership by joining the Friends of Bombay Hook association.

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

Comenity Direct – 2.15% APY, $1,500 minimum deposit

Among popular online banks, Comenity Direct offers one of the most competitive yields. And savers don’t have to pony up too much cash to qualify. The minimum deposit for its savings account is even lower ($100). CD terms range from one year to five years. As in most cases, at Comenity Direct, the longer-term CDs pay higher APYs.

Comenity Direct launched in April 2019. It’s an online-only bank that offers high-yield savings products and CDs. It’s a division of Comenity Capital Bank, which is part of a brand that has been around for 30 years.

Citizens Access – 2.10% APY, $5,000 minimum deposit

Citizens Access launched in July 2018. It made its debut with a savings account and CDs. And then in November 2019, it added an 11-month liquid CD and stopped offering the six and 18-month CDs.

The bank offers a competitive yield on its CDs and savings account. All of its products require a $5,000 minimum deposit. Interest payment options are flexible, meaning customers can have interest credited to the principal balance of the CD or transferred to another account, without penalty, before the CD matures.

Citizens Access is a direct bank offering savings products and the new online division of Citizens Bank.

Synchrony Bank – 2.09% 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.

Barclays Bank – 2.00% APY, no minimum deposit

Barclays Bank doesn’t have minimum balance requirements to open its CDs and savings account. That means it’s an option for savers across all income levels. The bank offers nine CD terms. It has competitive yields, but it doesn’t tend to offer the highest available APY. Barclays also offers a savings account, which has a competitive APY.

The bank is headquartered in the U.K. and has a global presence. In the U.S., its products are limited, but the bank overall rates well for its lack of monthly fees and deposit products.

PurePoint Financial – 1.95% APY, $10,000 minimum deposit

PurePoint Financial is a division of MUFG Union Bank. It offers nine regular CD terms and three terms for its no-penalty CDs. It also offers an online savings account with a competitive yield.

All of PurePoint Financial’s products have one thing in common: they require a $10,000 minimum deposit to open. So these accounts aren’t a good fit if you’re not ready to deposit that much.

Finding the best 2-year CD rates

When looking for a 2-year CD, it might be easier to just sign up with the bank that handles your checking account. But if you want to get the best rate, you’re more likely to do so if you cast a wide net than to just accept what your current bank offers.

“Brick and mortar banks have a lot of overhead to cover, plus they have a lot of competition from online banks,” says Sheryl Garrett, CFP professional and founder of the Garrett Planning Network. “Don’t just settle for the first CD rate that’s offered by ‘your bank.’ Focus on the fact that it’s ‘your money!'”

No matter the size of the bank that’s offering the best terms, as long as it’s a member of the Federal Deposit Insurance Corp., or FDIC, you can feel secure parking your money there. That’s because consumer deposits at all FDIC-insured banks are backed by the full faith and credit of the U.S. government up to $250,000, so if the bank fails, you won’t be on the hook. The same goes for credit unions backed by the National Credit Union Administration, or NCUA.

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, two-year CD and 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.

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 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.

Institution 5-year APY 2-year APY 1-year APY Minimum to earn APY
MAC Federal Credit Union N/A 2.40% 2.10% $1,000
Advancial Federal Credit Union 2.72% 2.30% 1.90% $25,000
Garden Savings Federal Credit Union 2.53% 2.27% 2.02% $500
Pen Air Federal Credit Union 2.60% 2.25% 2.05% $500
Dover Federal Credit Union 2.48% 2.22% 1.80% $25,000

To recap, see below the best 2-year CD rates

Institution APY Minimum to earn APY
MAC Federal Credit Union 2.40% $1,000
Advancial Federal Credit Union 2.30% $25,000
Garden Savings Federal Credit Union 2.27% $500
Pen Air Federal Credit Union 2.25% $500
Dover Federal Credit Union 2.22% $25,000

Learn more about other CD terms:

Learn more about CDs: