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Updated on Monday, November 9, 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 November 2020
1. Evansville Teachers Federal Credit Union — 1.04% APY, $1,000 minimum deposit
This 2-year certificate from Evansville Teachers Federal Credit Union offers a high APY at a relatively low minimum opening deposit. As with all the credit union certificates, this is a fixed rate for the length of the term.
Evansville Teachers Federal Credit Union was started by a group of Evansville, Ind., teachers in 1936 as a way of generating loans for fellow teachers post-Depression. You no longer need to be an educator in the district to take advantage of the credit union; joining the credit union is as easy as making a $5 donation to the Mater Dei Friends and Alumni Association.
2. Pen Air Federal Credit Union — 0.90% APY, $500 minimum deposit
Deposit just $500 to a Pen Air Federal Credit Union 24-month Certificate for some solid savings at 0.90% 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 $1 donation, which Pen Air will make on your behalf.
3. Hiway Federal Credit Union — 0.95% APY, $25,000 minimum deposit
Hiway Federal Credit Union’s 24- to 35-month CD rate is right in line with some others in our top 10, with one large difference: You’ll need to deposit at least $25,000 to secure this rate. If that’s more than you were planning to invest, you can still get a competitive rate with a smaller deposit.
Hiway FCU is based in Minnesota. Membership is open to anyone who lives, worships, works or attends school in the Metro Community area, as well as employees of a few select companies. If you live outside of Minnesota, you can still join the credit union by making a one-time $10 donation to the Minnesota Recreation and Park Foundation or becoming a member of the Association of the United States Army for $40.
4. Superior Choice Credit Union — 0.95% APY, $25,000 minimum deposit
Superior Choice Credit Union’s share certificates earn interest with deposits as low as $2,500, but you’ll need at least $25,000 to get this rate. The more you can invest, the higher the rate. Superior Choice credits dividends monthly.
Superior Choice Credit Union member is open to residents from areas within the Midwest, but you also can join the credit union 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.
5. Lafayette Federal Credit Union — 0.90% APY, $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 the District of Columbia, 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.
6. Hyperion Bank — 0.90% APY, $500 minimum deposit
Philadelphia-based Hyperion Bank offers a high interest rate for a low investment of just $500. Interest is compounded daily and credited at the end of each month, but withdrawing your money early will cost you 365 days’ interest.
You can open a Hyperion account by calling the bank, emailing customer support or visiting its branches in either Atlanta or Philadelphia.
7. State Department Federal Credit Union — 0.90% APY, $500 minimum deposit
With just $500, open a State Department Federal Credit Union 24-monthsCD to snag its competitive 0.90% 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 chartered 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.
8. CommunityWide Federal Credit Union — 0.90% APY, $1,000 minimum deposit
CommunityWide Federal Credit Union offers a 0.90% APY on its 24-month term share certificate. You’ll need at least $1,000 to get started. CommunityWide 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 two 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, assuming 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.
9. Greenwood Credit Union — 0.90% APY, $1,000 minimum deposit
Greenwood Credit Union offers a full spread of CD terms, but not all earn at competitive rates. That makes its 24-month CD a solid deal with its high rate. You’ll need at least $1,000 to open the account and start earning interest. Interest is compounded daily and credited monthly.
Interestingly, Greenwood Credit Union assesses a penalty of six months’ worth of interest on early withdrawals from any CD account, regardless of term length. If you need to make a withdrawal, wait for the account’s seven-day grace period after maturity to avoid that penalty.
Founded in 1948, Greenwood Credit Union opens its membership to everyone. To become a member, you simply need to open a Share Account with at least $5. There is only one Greenwood Credit Union branch, located in Warwick, R.I., but customers can still take advantage of over 5,000 CO-OP Shared Branches throughout the country for free.
10. Wings Financial Credit Union — 0.85% APY, $10,000 minimum deposit
Investing anywhere between $10,000 and $99,999 will net you this rate. Rates above and below that threshold aren’t far off, however, in the event you have either more or a less to put away. Make sure whatever money you put in can sit for two years, because withdrawing principal early will cost you all of your interest.
Wings Financial Credit Union is open to those who live or work in eligible Minnesota or Wisconsin counties or the metro areas of Seattle-Tacoma, Detroit, Orlando or Atlanta. Anyone who works in the aviation industry, as well as their immediate family members, are also welcome. Don’t meet those requirements? Making a donation of at least $5 to the Wings Financial Foundation will also allow you to join the credit union.
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 0.57% APY, as of November 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 $74 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.