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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 2-year CD rates, we sifted through data from DepositAccounts.com, a LendingTree-owned site. To start, we sorted by highest APY on 2-year CDs. We also took into consideration the minimum deposit requirement for each account.
The 10 best 2-year CD rates in 2019
|Institution||APY||Minimum deposit amount|
|Wheelhouse Credit Union||2.50%||$1,000|
|Dow Chemical Employees Credit Union||2.40%||$5,000|
|MAC Federal Credit Union||2.40%||$1,000|
|Connexus Credit Union||2.40%||$5,000|
|State Department Federal Credit Union||2.32%||$500|
|Dover Federal Credit Union||2.30%||$500|
|CommunityWide Federal Credit Union||2.30%||$1,000|
|First National Bank of America||2.25%||$500|
|Nationwide by Axos Bank||2.05%||$500|
|Pennsylvania State Employees Credit Union||2.00%||$500|
Wheelhouse Credit Union — 2.50% APY, $500 minimum deposit
Take advantage of a competitive APY with Wheelhouse Credit Union’s slightly shorter 22-month certificate. It requires only $500 to get started. Once the 22-month account matures, it will renew as a 24-month account. The early withdrawal penalty will equal 180 days worth of dividends.
Founded in 1934 by a group of City of San Diego employees, Wheelhouse Credit Union is the second-oldest credit union in San Diego. Membership is open to those who live and work in San Diego County, Zoological Society members and family members of current members.
Dow Chemical Employees Credit Union — 2.40% APY, $1,000 minimum deposit
A DCECU 24 Months Simple CD requires an opening minimum deposit of $1,000 to start earning at its competitive rate. The early withdrawal penalty for this term would be 180 days of interest.
DCECU was founded in 1937 to serve employees of The Dow Chemical Company. Membership is still open to The Dow Chemical Company, Dow Corning Corporation and all affiliated companies. Membership is also open to other Select Employer Group companies, family members of eligible individuals and members of select other groups.
MAC Federal Credit Union — 2.40% APY, $1,000 minimum deposit
Get started with a MAC Federal Credit Union 24 Months CD with at least $1,000. The penalty for an early withdrawal will equal 90 days’ worth of dividends.
Based in Alaska and chartered in 1952, MAC FCU has two branded branches, but also offers customers access to Shared Branches through the CO-OP Network. MAC FCU membership is open to Fairbanks North Star Borough residents, businesses and other individuals and legal entities, members of AUSA Polar Bear Chapter and current members’ immediate family.
Connexus Credit Union — 2.40% APY, $5,000 minimum deposit
Connexus Credit Union offers a competitive 2.40% APY on its 24 Months Certificate, which you can open with $5,000 or more. An early withdrawal from this account will trigger a penalty equal to 180 days dividends on the amount withdrawn.
Connexus Credit Union serves members across the country, including employees, retirees, family members, members, students or student alumni of select groups; residents of select communities or counties; family and household members of existing members; and members of the Connexus Association (requires a one-time $5 donation). Connexus was founded in 1935 and is based in Wausau, Wisc.
State Department Federal Credit Union — 2.32% APY, $500 minimum deposit
With just $500, open a State Department Federal Credit Union 24 Months CD to snag its competitive 2.32% APY. Interest is compounded daily and credited quarterly. There’s no service charge on the account, but watch out for the early withdrawal penalty. It will equal either 180 days of dividends on the amount withdrawn or the amount of dividends earned since the date of issuance, whichever is less.
SDFCU was originally cartered in 1935 by eight employees of the United States Department of State. Membership is open to Department of State employees, employees or members of select partner organizations and immediate family members of current members. You may also become eligible by joining the American Consumer Council.
Dover Federal Credit Union — 2.30% APY, $500 minimum deposit
Dover Federal Credit Union’s 2 Year term Share Certificate offers three different rates depending on your opening deposit. Its solid 2.30% APY applies to deposits of at least $500 to $24,999. Balances over that have the chance to earn slightly higher rates. The penalty for early withdrawals equals 180 days dividends.
You can qualify for Dover Federal Credit Union membership through United States Military and uniformed services, employment at partner businesses, family members and members of the Friends of Bombay Hook association.
CommunityWide Federal Credit Union — 2.30% APY, $1,000 minimum deposit
CommunityWide Federal Credit Union offers a 2.30% APY on its 24 Months Term Share Certificate. You’ll need at least $1,000 to get started. CW Term Share Certificates do not renew automatically. Withdrawing any part of the principal amount before maturity will trigger a penalty equal to the amount of the withdrawal times the remaining term (in days) of this certificate at the rate of 2 times the current APR (divided by 365) paid on this certificate. The penalty amount will be deducted from the amount withdrawn.
CommunityWide Federal Credit Union was founded in 1967 as the West Washington Association Federal Credit Union, taking on its current name in 1985. CommunityWide is based in South Bend, Ind. and opens up membership to members, employees and retirees of select organizations, spouses of persons who died while within the credit union’s field of membership and immediate family household members qualified members.
First National Bank of America — 2.25% APY, $1,000 minimum deposit
First National Bank of America offers a wide range of CD terms from one to 84 months, each with a competitive rates. These CDs require a starting minimum deposit of at least $1,000.
First National Bank of America first opened in 1955 and is based in Michigan, with three branches in the state in addition to its headquarters.
Nationwide by Axos Bank — 2.05%, $500 minimum deposit
The highest CD rate offered at Nationwide by Axos Bank is on its 24-month CD. You just need $500 to start saving. The early withdrawal penalty on this account equals 12 months’ worth of interest.
Nationwide by Axos Bank gives Nationwide members access to Axos Bank’s banking products and services. Axos Bank was founded in 2000. It is entirely digital, meaning there are no branches.
Pennsylvania State Employees Credit Union — 2.00% APY, $500 minimum deposit
Pennsylvania State Employees Credit Union offers the chance to earn the top rate here on its 24 months certificate with a starting balance of just $500. Uniquely, PSECU allows recurring deposits to be made into a certificate through automatic transfers (ATS), which you can set up within 30 days after opening.
PSECU certificates automatically renew for the same term length, unless you indicate otherwise before maturity. If you do not wish to renew your certificate, you have 10 days after maturity to redeem your funds. If you must make a withdrawal before maturity or outside of that grace period, you must withdraw at least $100 and you’ll face an early withdrawal penalty of 90 days’ worth of earnings on the principal amount withdrawn.
Founded in 1932 by Pennsylvania state workers, PSECU is NCUA-insured and is based in Harrisburg, Pa. PSECU membership is open to family or household members of current members, students, employees and graduates of partner colleges and universities, employees of Pennsylvania state or partner employers and members of the Pennsylvania Recreation and Park Society, whose membership PSECU will help pay for.
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 1.61% APY, as of August 2019.
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 just under $170 in interest ($169.82, if you’re wondering). Boost that APY to 3.00%, and your earned interest grows to $309.17, 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 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.