CD Calculator
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Friday, April 10, 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.
Note: The APYs (Annual Percentage Yield) shown are as of April 3, 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 0.54 percent APY, according to Bankrate’s most recent national index survey of banks and thrifts.
Today’s top widely available 2-year CD pays 1.90 percent APY. This may be a good place to invest for mid-term financial obligations, like paying off credit card debt.
Barclays Bank doesn’t have minimum balance requirements to open its CDs and savings account. That means it’s an option for savers just starting out or for experienced savers.
The bank offers nine CD terms. It has competitive yields and also offers a savings account, which has a competitive APY.
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.
The bank recently launched the Marcus app for mobile banking. It’s available on the App Store for iPhones.
Comenity Direct launched in April 2019. It's an online-only bank that offers high-yield savings products and CDs. Comenity Direct offers five terms of CDs.
Comenity Direct is a brand of Comenity Capital Bank. Comenity Capital Bank is a brand that’s existed for around 30 years. Comenity is a bank behind many branded credit cards.
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.
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 is a division of TIAA, FSB. TIAA Bank has 10 financial centers, all located in Florida.
Besides its Yield Pledge CDs, 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.
American Express is well-known for its credit cards and it’s also one of the leaders in the online banking space. But it also offers a competitive yield on some of its CDs and its savings account.
It also doesn’t require a minimum balance, so it may be a good fit for both new and experienced savers.
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.
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.
Live Oak Bank has been around since 2008. Live Oak Bank, which has its headquarters in Wilmington, North Carolina, offers a savings account and seven terms of CDs.
Live Oak Bank offers a variety of savings products with competitive APYs. There are some banks with lower opening deposit requirements. However, Live Oak Bank can be a good option if you have at least $2,500 for the minimum deposit to open this CD.
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.
CIT Bank is CIT’s national direct bank. CIT Bank, N.A. is a subsidiary of CIT Group Inc.
CIT Bank offers eight terms of CDs, four terms of jumbo CDs and an 11-month no-penalty CD.
In addition to its CDs, CIT Bank offers two savings accounts and a money market account. CIT Bank also launched its eChecking account in November 2019.
Sallie Mae does more than just provide private student loans.
Sallie Mae Bank offers CDs, a savings account, a money market account and credit cards. It offers a competitive yield on all of these deposit products.
Sallie Mae Bank was established in 2005 and has its headquarters in Salt Lake City, Utah. In 2014, Sallie Mae became a standalone consumer banking business.
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.
National Credit Union Administration, or NCUA, credit unions, have a standard share insurance amount of $250,0000 per share owner, for each account ownership category.
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.
| Institution | 5-year APY | 2-year APY | 1-year APY | Minimum to earn APY |
|---|---|---|---|---|
| Barclays | 1.85% | 1.85% | 1.85% | $0 |
| Marcus by Goldman Sachs | 1.90% | 1.85% | 1.85% | $500 |
| Comenity Direct | 1.80% | 1.75% | 1.70% | $1,500 |
| Discover Bank | 1.80% | 1.75% | 1.75% | $2,500 |
| Navy Federal Credit Union | 1.76% | 1.65% | 1.60% | $1,000 |
| TIAA Bank | 1.70% | 1.60% | 1.50% | $5,000 |
| American Express National Bank | 1.70% | 1.50% | 0.60% | $0 |
| Amerant Bank | 1.30% | 1.50% | 1.65% | $10,000 |
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.
| Institution | APY | Minimum to earn APY |
|---|---|---|
| Barclays Bank | 1.85% | $0 |
| Marcus by Goldman Sachs | 1.85% | $500 |
| Comenity Direct | 1.75% | $1,500 |
| Discover Bank | 1.75% | $2,500 |
| Navy Federal Credit Union | 1.65% | $1,000 |
| TIAA Bank | 1.60% | $5,000 |
| American Express National Bank | 1.50% | $0 |
| Amerant Bank | 1.50% | $10,000 |
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