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 January 2021
- Delta Community Credit Union: 0.95% APY; $1,000 minimum deposit
- Comenity Direct: 0.75% APY; $1,500 minimum deposit
- SchoolsFirst Federal Credit Union: 0.75% APY; $20,000 minimum deposit for APY
- Quontic Bank: 0.70% APY; $500 minimum deposit
- First Internet Bank of Indiana: 0.70% APY; $1,000 minimum deposit
- Live Oak Bank: 0.70% APY; $2,500 minimum deposit
- Golden 1 Credit Union: 0.65% APY; $500 minimum deposit
- Navy Federal Credit Union: 0.65% APY; $1,000 minimum deposit
- Synchrony Bank: 0.65% APY; $2,000 minimum deposit
- Ally Bank: 0.60% APY*; $0 minimum deposit
- VyStar Credit Union: 0.60% APY; $500 minimum deposit
- Randolph Brooks Federal Credit Union: 0.60% APY; $1,000 minimum deposit
- Sallie Mae Bank: 0.60% APY; $2,500 minimum deposit
- Amerant Bank: 0.60% APY; $10,000 minimum deposit
Note: The APYs (Annual Percentage Yield) shown are as of Jan. 20, 2021. 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 APY noted for Ally Bank is a “Raise Your Rate CD,” meaning you can increase your rate once during your term if it goes up.
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 a little more than three times the national average of 0.26 percent APY, according to Bankrate’s most recent national index survey of banks and thrifts.
Today’s top widely available 2-year CD pays 0.95 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 January 2021
Delta Community Credit Union – 0.95% 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.
Comenity Direct – 0.75% APY; $1,500 minimum deposit
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, which has existed for more than 30 years. Comenity is a bank behind many branded credit cards.
SchoolsFirst Federal Credit Union – 0.75% 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 – 0.70% 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.
First Internet Bank of Indiana – 0.70% APY; $1,000 minimum deposit
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.
Live Oak Bank – 0.70% APY; $2,500 minimum deposit
Live Oak Bank was founded in 2008. The online bank offers a competitive yield on its savings account. Like most online banks, Live Oak Bank’s Online Savings account doesn’t have a monthly service fee. It also doesn’t require you to keep a minimum balance.
In addition to its savings account, Live Oak Bank also offers seven terms of CDs. Live Oak Bank has its headquarters in Wilmington, North Carolina.
Golden 1 Credit Union – 0.65% APY; $500 minimum deposit
Golden 1 Credit Union has one million members with its main office being located in Sacramento, Calif. Golden 1 Credit Union has 72 branches in California, and has been around since 1933. Membership to Golden 1 Credit Union is open to all Californians.
Non-Californians can join Golden 1 Credit Union if they are a registered domestic partner or family member of a member. They can also join if they’re a member of one of the select employee groups.
In addition to CDs, Golden 1 Credit Union also offers a money market account, checking and savings accounts. The credit union also has credit cards and loans.
Navy Federal Credit Union – 0.65% APY; $1,000 minimum deposit
Navy Federal Credit Union has more than 9 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.
Synchrony Bank – 0.65% 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.
Ally Bank – 0.60% APY, $0 minimum deposit
Ally Bank started in 2004 and is headquartered in Sandy, Utah. In 2009, GMAC Bank was transformed into Ally Bank. Ally Bank exceeded 1 million Ally Bank customer accounts in 2012 and currently has 2.13 million customers and counting.
Its 11-month no-penalty CD offers three tiers of interest. Those tiers are less than $5,000, between $5,000 and $24,999.99 or at least $25,000.
Besides its no-penalty CD, Ally Bank also offers a checking account, a money market account, term CDs, two terms of a Raise Your Rate CD.
VyStar Credit Union – 0.60% 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.
Randolph-Brooks Federal Credit Union – 0.60% APY; $1,000 minimum deposit
Randolph-Brooks Federal Credit Union has more than 55 branches. It has at least one location in Austin, Corpus Christi and San Antonio.
Randolph-Brooks Federal Credit Union was established in 1952 and has its headquarters in Live Oak, Texas.
Besides its CDs, it offers a Really Free Checking account that doesn’t require a minimum balance and it doesn’t have a monthly fee.
Sallie Mae Bank – 0.60% APY; $2,500 minimum deposit
Sallie Mae Bank offers CDs, a savings account, money market account, credit cards and private student loans. Sallie Mae Bank offers competitive yields on both its CDs and its savings deposit accounts.
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.
Amerant Bank – 0.60% 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.
2-year CD yields offered by popular banks –January 2021
- Marcus by Goldman Sachs: 0.55% APY; $500 minimum deposit
- Discover Bank: 0.50% APY; $2,500 minimum deposit
- TIAA Bank: 0.45% APY; $1,000 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.
Discover Bank – 0.50% 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.
TIAA Bank – 0.45% APY; $1,000 minimum deposit
TIAA Bank is a division of TIAA, FSB. TIAA Bank has 10 financial centers, all located in Florida.
TIAA Bank offers a Yield Pledge Checking account, a Yield Pledge Money Market, Yield Pledge Basic CDs and other products. TIAA Bank’s CDs require a $1,000 minimum deposit to open one. TIAA Bank also offers IRA-eligible CDs.
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 best 2-year CD rates in January 2021
|Institution||APY||Minimum to earn APY|
|Delta Community Credit Union||0.95%||$1,000|
|SchoolsFirst Federal Credit Union||0.75%||$20,000|
|First Internet Bank of Indiana||0.70%||$1,000|
|Live Oak Bank||0.70%||$2,500|
|Golden 1 Credit Union||0.65%||$500|
|Navy Federal Credit Union||0.65%||$1,000|
|VyStar Credit Union||0.60%||$500|
|Randolph Brooks Federal Credit Union||0.60%||$1,000|
Learn more about other CD terms:
Learn more about CDs:
- What is a certificate of deposit?
- Which CD account is best for you?
- See how CD safety can boost your portfolio returns
Featured photo by 10’000 Hours of Getty Images.