If you’re sick 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.
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 July 2019
- Nationwide by Axos Bank: 2.90% APY; $500 minimum deposit
- Quontic Bank: 2.90% APY; $1,000 minimum deposit
- First National Bank of America: 2.85% APY; $1,000 minimum deposit
- Comenity Direct: 2.85% APY; $1,500 minimum deposit
- MapleMark Bank: 2.85% APY; $25,000 deposit to earn top rate
- TotalDirectBank: 2.85% 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 nearly three times the national average of 1.03 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.
Today’s top nationally available 2-year CDs pay 2.90 percent APY. This may be a good place to invest for mid-term financial obligations, like paying off credit card debt.
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.
Best 2-year CD Rates: Bank Details
1. Nationwide by Axos Bank, $500 minimum deposit
Details: Axos Bank acquired Nationwide Bank’s deposit accounts in 2018. Through this new partnership, customers have access to personal and business accounts online.
Nationwide by Axos Bank earned 4.3 out of 5 stars in Bankrate’s full review of its products and services.
2. Quontic Bank, $1,000 minimum deposit
Details: Quontic Bank is headquartered in Astoria, New York. The bank has one local branch and offers its products online as well.
In addition to CDs, customers have access to financing solutions such as VA and FHA loans.
3. First National Bank of America, $1,000 minimum deposit
Details: First National Bank of America is based in East Lansing, Michigan. In addition to its headquarters, the community bank has branches in Traverse City and Grand Rapids.
The bank earned 3.6 out of 5 stars in Bankrate’s full review of its offerings.
4. Comenity Direct, $1,500 minimum deposit
Details: Comenity Direct is an online division of Comenity Capital Bank, which is part of a brand that has been around for 30 years.
The bank earned a five-star rating in Bankrate’s latest review of its financial health.
5. (tie) MapleMark Bank, $25,000 minimum deposit
Details: MapleMark Bank is based in Dallas but offers certain products nationwide, including several certificates of deposit that are available online.
5. (tie) TotalDirectBank, $25,000 minimum deposit
Details: TotalDirectBank is an online-only bank with CDs available nationwide. It is a division of City National Bank of Florida, which was founded in Miami more than 70 years ago.
City National Bank of Florida earned four out of five stars in Bankrate’s latest review of its financial health.
A rung in the 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.
To recap, see below the best 2-year CD rates
| Institution | APY | Minimum deposit |
|---|---|---|
| Nationwide by Axos Bank | 2.90% | $500 |
| Quontic Bank | 2.90% | $1,000 |
| First National Bank of America | 2.85% | $1,000 |
| Comenity Direct | 2.85% | $1,500 |
| MapleMark Bank | 2.85% | $25,000 |
| TotalDirectBank | 2.85% | $25,000 |
