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Updated on Wednesday, July 1, 2020
When it comes to saving and growing your money, you want to make sure you’re doing it efficiently. This is especially true if you’re building a CD ladder, where every component should be optimized for your savings goals. CD ladders are typically built from accounts that mature within a year of each other. For many savers, that means finding the best 1-year CD rates, the best 2-year CD rates, the best 3-year CD rates, and so on.
To help you find the best CD rates on 2-year accounts, we sifted through data from DepositAccounts.com, a LendingTree-owned site. To start, we sorted by highest APY on 2-year CDs APY. We also took into consideration the minimum deposit requirement for each account.
The 10 best 2-year CD rates in June 2020
#1 Lafayette Federal Credit Union — 1.01%, $500 minimum deposit
Lafayette Federal Credit Union offers a handful of certificates, including its 2-Year Fixed Rate Certificate, which requires $500 to open. Interest is compounded and paid quarterly. An early withdrawal from this account will trigger a penalty equal to 360 days’ worth of dividends.
Chartered in 1935, Lafayette is headquartered in Rockville, Md. It has branches in Maryland, Virginia and Washington, D.C., in addition to CO-OP Shared Branches throughout the country. Membership is open to those who live or work in its serviced areas, are employed by approved agencies or companies, are an immediate family member of a current member or are a member of the Home Ownership Financial Literacy Council. You can also join if you are an existing member or become a member of the American Consumer Council.
#2 Pen Air Federal Credit Union — 1.40% APY, $500 minimum deposit
Deposit just $500 to a Pen Air Federal Credit Union 24-month Certificate for some solid savings at 1.40% APY. Early withdrawals from a 24-month Certificate will trigger a penalty equal 180 days dividends.
Founded in 1936, Pen Air FCU has 15 locations in Northwest Florida and Southeast Alabama. Its membership is open to you if you are active duty or retired military, a civil service employee, a partnering select employer group employee or an immediate family member of the previous options. You may also join by becoming a member of the Friends of the Navy-Marine Corps Relief Society, Inc.with a one-time $3 donation, which Pen Air will make on your behalf.
#3. Signature Federal Credit Union — 1.20% APY, $500 minimum deposit
This credit union offers a variety of products to meet your investment needs. You can get this highly competitive fixed rate on a 24-month Share certificate with a relatively small minimum deposit. As with most CDs, you may incur a penalty worth 365 days of dividends if you withdraw funds before the two-year mark. No additional deposits can be made once you’ve opened the account.
Based in Virginia, Signature Federal Credit Union is celebrating its 50th anniversary in 2020. Signature FCU membership is open to members and employees of a number of organizations and charities. But if you don’t fall into one of these groups, you can join by enrolling in the American Consumer Council, which Signature will do for you at no extra cost.
#4. Georgia’s Own Federal Credit Union — 1.25% APY, $500 minimum deposit
Interest is compounded quarterly on this CD from Georgia’s Own Federal Credit Union, whose attractive rate is available at any level of deposit, from as little as $500. A penalty equal to 180 days’ interest will apply for early withdrawal.
Georgia’s Own is focused, as you might have guessed, on people who live and work in Georgia. If you live outside of Georgia you can still join by becoming a member of Georgia’s Own Foundation, the charitable division of the credit union, for as little as $10.
#5. Financial Partners Federal Credit Union — 1.05% APY, $1,000 minimum deposit
With an investment of $1,000, you’ll earn this middle-of-the-pack rate from Financial Partners Federal Credit Union. If you have a large amount ($100,000) that you can afford not to touch for a couple of years, you’ll net a jumbo certificate rate that’s nearly at the top of this list. As always, there is a penalty for early withdrawal.
Financial Partners’ membership is open to those who live, work or go to school in certain areas of California, but is also open to retirees and employees of nearly 700 employer groups.
#6. Superior Choice Credit Union — 0.95% APY, $25,000 minimum deposit
Superior Choice Credit Union’s rates can work for a range of investment terms. Although you’ll need to deposit $25,000 to get this rate, contributing only $2,500 will get you a rate that still falls just below our top 10. The more you can invest, the more the rate steps up.
Superior is available to residents from areas within the Midwest, but you can also join by becoming a member of the American Consumer Council or the Douglas County Historical Society in Superior, Wis., for $25 — or less if you’re a student or senior citizen.
#7. Matadors Community Credit Union — 1.10% APY, $10,000 minimum deposit
With a minimum opening deposit of $1,000, you can open a Matadors Community Credit Union certificate, including its high-yield 24-month certificate. Platinum Members of the credit union can earn an additional 0.15% on a certificate of 12 months or longer.
MCCU was founded in 1963 and opens its membership up to employees at select employer groups throughout the San Fernando, Simi and Santa Clarita Valleys in California.
#8 Marcus by Goldman Sachs Bank USA —1.10% APY, $500 minimum deposit
Not only does the 2-Year High Yield CD from Goldman Sachs Bank USA offer a competitive rate, it also comes with the added benefit of a 10-Day CD rate guarantee. If the rate goes up within 10 days of opening your CD, you’ll automatically earn the higher rate. There is a $500 minimum deposit requirement.
Goldman Sachs Bank USA is also known under the Marcus brand, both operating online and under the purview of investment firm Goldman Sachs.
#9 Comenity Direct — 1.05% APY, $1,500 minimum deposit
At Comenity Direct, you can start growing your money in a 2-year CD with just $1,500. Interest accrues and compounds daily on all balances up to $10 million. There are no fees on the account, but there is an early withdrawal penalty of 180 days’ simple interest.
Comenity Direct is a brand of Utah-based Comenity Capital Bank. It traces its roots back to 1986.
#10 First Internet Bank — 1.11%, $1,000 minimum deposit
Not only does First Internet Bank offer a competitive rate on a low minimum deposit, but it also charges no maintenance fees. You also have the option of having your CD automatically renew at the end of the term.
Founded in 1999, First Internet Bank is FDIC-insured and operates entirely online.
The best 2-year CD rates vs. the national average 2-year CD rate
As we’ve said, the key to maximizing your savings is finding the right accounts for stashing your money with the highest CD rates. Luckily, the best 2-year CD rates above all earn at substantially higher interest rates than the average 2-year CD rate. On average, 2-year CD rates earn just 0.808% APY, as of June 2020.
Let’s say you deposit $5,000 into a CD earning at the national average. At the end of your 24-month CD, you’ll have earned $81 in interest. Boost that APY to 3.00%, and your earned interest grows to $305, a much better return on your cash.
It’s also helpful to check out how often a bank compounds interest. Most often, you’ll see CDs with monthly or daily compounding interest. In basic terms, compounded interest is the interest you earn on already-earned interest. For example, with daily compounding, your balance earns interest today. Then tomorrow, that new, higher balance will earn even more interest, and so on. It’s a simple change that can grow your savings a little bit more efficiently.
Using the above example, a $5,000 deposit into a 24-month CD at 3% APY grows by $309 with interest compounded daily. If you compound it monthly, you’ll earn $308 instead, while quarterly compounding drops that amount by nearly another dollar, and so on. While that might not seem like much, it can prove useful if you’re looking to maximize your savings down to every last dollar.