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 September 2019

  • Prime Alliance Bank: 2.80% APY; $500 minimum deposit
  • MAC Federal Credit Union: 2.80% APY; $1,000 minimum deposit
  • Credit Union of the Rockies: 2.75% APY; $1,000 minimum deposit
  • Commonwealth One Federal Credit Union: 2.71% APY; $1,000 minimum deposit
  • First National Bank of America: 2.60% APY; $1,000 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 0.94 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.

Today’s top nationally available 2-year CDs pay 2.8 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

1.Prime Alliance Bank: Prime Alliance Bank is based in Woods Cross, Utah. In 2004, it was established to support consumers and local business owners. In the latest review of its financial health, it earned five out of five stars.

2. MAC Federal Credit Union: 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 anyone who joins the Polar Bear Chapter of the Association of the U.S. Army for $30. In the latest review of its financial health, it earned five out of five stars.

3. Credit Union of the Rockies: Founded in 1937, Credit Union of the Rockies is based in Golden Colorado. Membership is open to anyone who joins the Consumers United Association for a $5 membership fee. The credit union earned four out of five stars in the latest review of its financial health.

4. CommonWealth One Federal Credit Union: The credit union is based in Alexandria, Virginia and was chartered in 1944 as Army Air Force Annex #1 Credit Union. Back then, there were only 94 members. Today, there are more than 32,600 members and anyone can join by becoming a lifetime member of the Virginia Consumer Council. In the latest review of its financial health, the credit union earned four out of five stars.

5. First National Bank of America: It’s a community bank based in Michigan with three physical branches. The financial institution opened in 1955 as First National Bank of East Lansing. The company transitioned to First National Bank of Michigan in 1978 before ultimately becoming First National Bank of America in 1988.  It earned 3.6 out of 5 stars in Bankrate’s full review of its products and offerings.

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.

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.

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.

CD offer 5-year APY 2-year APY 1-year APY Minimum deposit
Prime Alliance Bank 3.15% 2.80% 2.65% $500
MAC Federal Credit Union N/A 2.80% 2.20% $1,000
Credit Union of the Rockies 2.70%* 2.75%* 0.40% $1,000 for 5-year and 2-year; $500 for 1-year CD
Commonwealth One Federal Credit Union 3.11% 2.71% 2.07% $1,000
First National Bank of America 2.85% 2.60% 2.50% $1,000

*APYs are for promotional CDs.

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

Institution APY Minimum deposit
Prime Alliance Bank 2.80% $500
MAC Federal Credit Union 2.80% $1,000
Credit Union of the Rockies 2.75% $1,000
Commonwealth One Federal Credit Union 2.71% $1,000
First National Bank of America 2.60% $1,000

Learn more about other CD terms