Best 2-Year CD Rates

Our guide to the best-paying 2-year CDs that are available nationwide

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When you have money you want to save for a goal that's still a bit on the horizon, or simply have surplus savings you won't need to touch for a couple of years, a 2-year certificate of deposit (CD) can keep your savings safe and protected, while also earning you a steady, guaranteed return.

Most CDs outpay a standard savings account, but how much you can earn depends completely on whether you shop around. While the national average rate for 2-year CDs is below half of a percent right now, you can earn three to five times that much simply by opening one of the top-paying CDs in our rankings below.

We build our list—and update it constantly—by researching the rates of almost 200 banks and credit unions that offer CDs nationwide. Terms of 20–29 months, with minimum deposit requirements of up to $25,000, are eligible for our 2-year rankings. To be included, the institution must also be federally insured (by the FDIC for banks and the NCUA for credit unions).

Best Current 2-Year CD Rates:

  • Connexus Credit Union - 2.86% APY
  • Department of Commerce Federal Credit Union - 2.52% APY
  • KS State Bank - 2.50% APY
  • Merrick Bank - 2.45% APY
  • Colorado Federal Savings Bank - 2.30% APY
  • Popular Direct - 2.30% APY
  • First National Bank of America - 2.25% APY
  • Teachers Federal Credit Union - 2.25% APY
  • Langley Federal Credit Union - 2.25% APY
  • Crescent Bank - 2.20% APY
  • Rising Bank - 2.20% APY
  • Bread Savings - 2.20% APY
  • Live Oak Bank - 2.20% APY
  • First Internet Bank - 2.12% APY
  • Seattle Bank - 2.12% APY

Below are the top certificate of deposit rates available from our partners, followed by a ranking of some of the best CD rates nationwide.

Details on these top-paying nationally available 2-year CDs are outlined below, including information about minimum deposits and early withdrawal penalties. For credit union CDs, information is also provided on how to easily join the credit union.

In cases where more than one institution pays the same top rate, we've prioritized CDs by the shortest term, then the CD requiring a smaller minimum deposit, and if still a tie, by which CD has a milder penalty for early withdrawal.

Connexus Credit Union - 2.86% APY

  • Term (months): 24
  • Minimum deposit: $5,000
  • Early withdrawal penalty: Six months of interest
  • Membership: Anyone can join the credit union by donating $5 to the Connexus Association and holding $5 or more in a savings account.

Department of Commerce Federal Credit Union - 2.52% APY

  • Term (months): 24-35
  • Minimum deposit: $25,000
  • Early withdrawal penalty: Six months of interest
  • Membership: Anyone can join the DCFCU by agreeing to a free membership in the nonprofit American Consumer Council.

KS State Bank - 2.50% APY

  • Term (months): 24
  • Minimum deposit: $500
  • Early withdrawal penalty: Nine months of interest
  • About: Established in 1969, KS State Bank operates six branches in Kansas and one in Phoenix, while serving online customers nationwide,

Merrick Bank – 2.31% APY

  • Term (months): 24
  • Minimum deposit: $25,000
  • Early withdrawal penalty: 3% of the account balance
  • About: Primarily a credit card issuer and consumer finance provider, Merrick Bank offers online-only certificates of deposit.

Colorado Federal Savings Bank - 2.30% APY

  • Term (months): 24
  • Minimum deposit: $5,000
  • Early withdrawal penalty: Six months of interest
  • About: Colorado Federal was founded in 1990 and is headquartered in Greenwood Village, Colorado. In addition to serving communities across the state, it serves customers nationwide with online banking.

Popular Direct - 2.30% APY

  • Term (months): 24
  • Minimum deposit: $10,000
  • Early withdrawal penalty: Four months of interest
  • About: Popular Direct is the online-only arm of Popular Bank, the U.S. banking subsidiary of Popular, Inc., which serves banking customers in the U.S., Puerto Rico, and the Caribbean.

First National Bank of America - 2.25% APY

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 12 months of interest
  • About: First National Bank of America is a Michigan-based community bank established in 1955. In addition to three branches in the state, FNBA offers online banking products to customers nationwide.

Teachers Federal Credit Union - 2.25% APY*

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Nine months of interest
  • Membership: Anyone can join Teachers Federal Credit Union by simply keeping $1 in a member savings account.

* APY is a blended rate over two years, earning 2.00% in Year 1 and 2.50% in Year 2.

Langley Federal Credit Union - 2.25% APY

  • Term (months): 27
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Six months of interest
  • About: Anyone can join Langley Federal Credit Union by simply keeping $5 in a member savings account.

Crescent Bank - 2.20% APY

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Six months of interest
  • About: Founded in 1991, Crescent Bank is primarily an auto loan provider that also offers banking services in the Greater New Orleans area as well as online to customers nationwide.

Rising Bank - 2.20% APY

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Six months of interest
  • About: Rising Bank is an Internet-only division of Midwest BankCentre of St. Louis, Mo., established 1906.

Bread Savings - 2.20% APY

  • Term (months): 24
  • Minimum deposit: $1,500
  • Early withdrawal penalty: Six months of interest
  • About: Bread Savings is the online consumer deposits bank operated by credit card issuer Comenity Capital Bank.

Live Oak Bank - 2.20% APY

  • Term (months): 24
  • Minimum deposit: $2,500
  • Early withdrawal penalty: Six months of interest
  • About: Live Oak Bank is an Internet-only bank established in Wilmington, N.C., in 2008.

First Internet Bank - 2.12% APY

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: 12 months of interest
  • About: First Internet Bank is so-named for being the first FDIC-insured bank to operate exclusively online. Founded in 1999, it is based in the Indianapolis suburb of Fishers, Ind.

Seattle Bank - 2.12% APY

  • Term (months): 24
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Three months of interest
  • About: Established in 1999, Seattle Bank serves online customers across the country as well as operates a branch in downtown Seattle.

What Is a 2-Year CD?

Certificates of deposit allow savers to earn a higher interest rate by agreeing to keep their funds in a special bank account for an agreed upon time period. In essence, banks are willing to pay more on CDs than savings and money market accounts because your CD balance becomes money they can count on and with little administration costs since there is almost no activity on CD accounts.

What the consumer trades off for higher earnings is a written commitment to keep the funds on deposit for the CD's full term. This means just one deposit is made at the outset, and no withdrawals are made until the CD matures.

Of course, there is an escape hatch should you find you desperately need early access to the money. But exercising this option will cost you an early withdrawal penalty, and you might pay dearly.

CD terms can range anywhere from a week to 10 years, but the most common terms run from six months to five years, with 2-year certificates being a popular choice.

In theory, financial institutions are willing to pay a higher interest rate on CDs of longer terms and larger deposits, as they stand to gain more from the longer time horizon and from the efficiencies of administering a single account with a large balance.

However, in practice, banks and credit unions sometimes pay more on a shorter CD and less on their longer ones. It all comes down to what they predict will happen in the national rate environment going forward and what time duration of deposits are most needed to fund their other business, such as lending.

Key Takeaways

  • If you can hold some of your savings in place for a set period, you'll earn more by putting it into a certificate of deposit than into a regular savings or money market account.
  • Don't simply open a CD at your primary bank without shopping around for the best rates, since the top-paying certificates in the country pay three–five times more than the average certificate.
  • Two-year CDs are great for growing your savings as you head towards a goal that's a couple of years out. Or they can simply hold savings that you know you can live without for the next two years.
  • Though you may have a 2-year CD in mind, be sure to consider any odd-term CDs you encounter in your search, as these are often promotional CDs that may pay a very competitive rate.

Who Are 2-Year CDs Good For?

Knowing your savings goals and your available funds for other purposes are important inputs in deciding whether to open a CD, and if so, how long a term to choose.

Two-year CDs represent a mid-range length. While shorter CDs are great when you think you might need the money within a year, and long terms like five years are a good way to lock your interest rate when it seems interest rates will be declining, 2-year certificates represent a balance between duration and accessibility.

If you're saving for a large purchase like a house, car, or boat—or maybe even a big trip—or will be making tuition payments for your child in the next couple of years, 2-year CDs are a good choice. They include a safeguard against you accessing the funds willy-nilly, while not keeping your funds locked up for too many years.

Two-year CDs may also be appealing when the future of interest rates is uncertain. Interest rates are impossible to predict, but sometimes it is widely expected they will be rising, while other times falling. When the rate environment is very uncertain, however, 2-year CDs strike a balance between locking a rate for the next couple of years and not committing your funds for an unnecessarily long time if rates go up in the future.

Lastly, all CD ladders will involve a 2-year CD. CD laddering is a strategy that enables savers to capitalize on the higher rates offered by long-term certificates but with access to some of your funds once every year. To complete a 5-year CD ladder, you will need at least one 2-year certificate.

What's the Difference Between CDs From Traditional Banks, Online Banks, and Credit Unions?

Certificates of deposit have long been a staple of traditional brick-and-mortar banks. And in times past, the only place a customer would consider opening a CD was where they already banked.

But the Internet has changed all that, with savers now able to open a CD online at hundreds of banks and credit unions. Rate research is also immensely aided by our ability to search online.

As a result, traditional banks have been given a run for their money on CDs, with online-only banks and credit unions often offering the best-paying certificates. The reason credit unions often pay better than banks is due to their nonprofit nature and consequent desire to pass benefits onto their member customers.

For online banks, it's their low overhead expense—because they don't need to operate, staff, and maintain physical branches—that allows them to pay higher deposit rates to attract customers.

There is also a third category of CD institution, and that is the brick-and-mortar bank that also offers banking products online to customers anywhere. Sometimes they do so from their existing website, while other banks start up separate online-only subsidiaries, sometimes even with a completely different name.

Fortunately for CD shoppers, it doesn't matter too much whether the top-paying CD you just found is from a bank or credit union, or from a traditional vs. online bank. So long as you ensure that the bank is FDIC-insured (or the credit union is NCUA-insured), your protection as a consumer will be the same. Though a bank may operate only online, carrying the FDIC logo indicates it meets all the same regulatory standards as a physical bank.

As for credit unions, it's good to be open-minded to these as well, as their rates are often among the top ranks in any CD term, and especially long terms. The one caveat with opening a credit union CD is that you must first become a member of the credit union. This is generally not too difficult or time-consuming a process. But it may involve jumping through a hoop to become eligible for membership, such as making a donation to an affiliated nonprofit.

Why Odd-Term CDs Are Important to Consider

When a bank or credit union has a special certificate they want to offer for a limited time, they will often release it as an odd-term product. What "odd term" refers to is a CD that differs from the conventional terms, such as 1-year, 2-year, 3-year, etc.

Instead, you might see an 11-month CD or even a 29-month CD, for instance. All that's happening here is the institution is trying to differentiate this CD from its regular menu of standard CDs, both as a marketing tool to make the CD stand out to customers and perhaps also as an internal signifier that this is a limited-time CD.

The reason it's wise to pay just as much attention to odd term CDs as the conventional ones is that these promotional certificates often offer much higher interest rates. It is usually part of their "CD special" nature to not only stand out on term but on rate as well.

What If I Need to Withdraw My Money Early?

Even those of us who make the most careful financial plans can run into something unexpected that challenges our budget and our savings goals. While it's true that CDs involve a lock of sorts, prohibiting you from simply withdrawing the funds at will, every CD institution offers an option to access your funds prematurely. This is called an early withdrawal penalty, or EWP.

Essentially, the penalty is the price you can opt to pay the bank in exchange for cashing in your CD early. While some banks allow you to take out just some of your funds, others require you to remove them all and close the CD.

In either case, early withdrawal penalties are established by the bank or credit union as a policy on how the calculation will be made. The most common method is to deduct a certain number of months' interest from your balance before the remaining funds are paid to you. Typically, the longer the original CD term, the more months of interest are paid in penalty when withdrawing early.

But buyer beware: EWP policies vary quite widely, with some even allowing for the penalty to eat into your principal. Even with the best intentions to keep a CD fully funded for the entire term, it's smart to investigate the early withdrawal penalty in advance of committing to any CD and then only choosing a certificate with a potential penalty you can stomach.

Though federal law requires that all banks and credit unions disclose their early withdrawal penalty policy to you before you open a certificate account, don't wait until you're provided with the fine print before signing on the dotted line. If you can't find early withdrawal information on the institution's website, then call or chat with a customer service representative to ask what their policy is for the CD term you're considering.

What Are Some Alternatives to a 2-Year CD?

For money you expect to need, or at least access, in about two years, investing in the stock market is not recommended, as market volatility may erode your savings before you withdraw the funds. Most financial advisors suggest you not invest any money in the market that you can't keep there for at least five years.

But if you find yourself resisting the idea of locking your money up in a CD, the most logical alternative is to instead put the funds in a savings or money market account. Just be sure to seek out a high-yield savings account, as these accounts typically pay 15–20 times more than the national average rate.

Another alternative is to stretch your time horizon, or shorten it, if a more appealing rate is available by doing so. For instance, instead of a 2-year certificate, you may encounter a 3-year promotional CD with an excellent rate. If you can make the time horizon stretch, it can be a good move.

If you aren't looking to lock your money up for a period of time and want easier access to it, you could look at opening a high-yield savings account as an alternative. Below are some savings account options from our partners which can be competitive with the rates you can earn on CDs. It should be noted that unlike a CD, where your rate is locked in, with a savings account the bank or credit union can change your rate at any time.