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|
|Summit Credit Union||3.00%||$500|
|Sallie Mae Bank||3.00%||$2,500|
|Georgia Banking Company||2.95%||$500|
|Colorado Federal Savings Bank||2.95%||$5,000|
CD Bank — 3.07% APY, $10,000 minimum deposit
With a name like this, it’s no wonder that CD Bank offers great rates across its certificate of deposit product line, especially on its 24-month CD. Interest is credited semi-annually. Early withdrawals from a CD Bank 24-month account will trigger a penalty equal to 18 months’ worth of interest, the highest penalty on this list. Opening a CD here also requires a relatively high minimum deposit of $10,000.
CD Bank is the online division of TBK Bank and offers only CD accounts at the moment. Headquartered in Dallas, TBK Bank is a subsidiary of Triumph Bancorp, Inc.
Summit Credit Union — 3.00% APY, $500 minimum deposit
At Summit Credit Union, you’ll want to focus on the 27-Month Special CD for its superior rate, rather than the standard 24-month account, which earns at a lower yield. Waiting just three extra months can boost your savings significantly. Either way, you’ll need only $500 or more to open an account.
Summit Credit Union employs a pretty strict early withdrawal policy for its CDs: If you withdraw any of the principal amount before maturity, Summit will close your account and you’ll face a penalty of 180 days’ worth of dividends, making it imperative for you to wait for maturity. At that point, you have a 10-day grace period to make any penalty-free withdrawals.
Summit Credit Union was founded in 1935 by CUNA, Inc. in Madison, Wis., and maintains branches mostly in southern Wisconsin. Unlike a typical credit union, Summit Credit Union membership is open to anyone. To join, you just need to open Primary Savings account with at least $5.
Sallie Mae Bank — 3.00% APY, $2,500 minimum deposit
Known mostly for its student loans, Sallie Mae also offers a variety of great banking products, including certificates of deposit. Its 24-month CD is a particularly good deal, and you need only $2,500 to open an account. Sallie Mae Bank will impose an early withdrawal penalty of 180 days’ worth of interest.
Sallie Mae first started as a government-funded business in 1972 and became a fully privatized company in 2004. Through Sallie Mae Bank, you can open not only CDs, but high-yield savings accounts, a money market account and personal loans, as well.
WebBank —2.90% APY, $2,500 minimum deposit
WebBank Time Deposits — its name for CDs — offer some great savings opportunities on all five terms, including the 2-year time deposit. Plus, interest is compounded daily. Opening a time deposit requires an initial deposit of at least $2,500. The early withdrawal penalty on a 2-year time deposit equals six months of simple interest.
WebBank was founded in 1997 and is currently headquartered in Salt Lake City.
BankDirect — 2.98% APY, $10,000 minimum deposit
If you have thousands of extra dollars to stash away, consider opening a BankDirect 24-month CD. It requires at least $10,000 to open. The early withdrawal penalty on this account is 180 days’ worth of interest on the principal amount withdrawn.
BankDirect, which first went live in 1999, is a branchless division of Texas Capital Bank, N.A.
TotalDirectBank — 2.98% APY, $25,000 minimum deposit
TotalDirectBank also requires a high deposit of $25,000 to open a CD, including its high-yield 24-month CD. Its early withdrawal penalty will equal six months of simple interest earned, based on a 360-day year.
TotalDirectBank operates entirely online. It’s a division of City National Bank of Florida which has a 70-year history.
Banesco USA — 2.45% APY, $1,500 minimum deposit
Each BaneSmart CD from Banesco USA offers a great rate to grow your savings, especially its high-yield 24 Month CD. You need to open an account with at least $1,500. The early withdrawal penalty on a 24 Month CD equals nine months of interest earned.
Banesco USA was founded in 2006, and maintains four branches in South Florida and one in San Juan, Puerto Rico. Banesco USA is part of the wider international banking group, Banesco International, which spans over 15 countries.
Georgia Banking Company —2.95% APY, $500 minimum deposit
With its low minimum deposit of $500 and its high interest rate, Georgia Banking Company’s 2 Year Certificate can boost just about anyone’s savings. Just be careful about the early withdrawal penalty, which will set your savings back by six months’ worth of interest.
Georgia Banking Company was founded in 1998. In addition to the bank’s two Atlanta-area branches, you can easily access your accounts online, on mobile and over the phone.
Rising Bank —2.95% APY, $1,000 minimum deposit
Rising Bank offers a few types of CDs, which includes its high rate 2-Year Term CD. You’ll need at least $1,000 to open an account and earn interest. Interest is compounded and credited every three months. An early withdrawal from this account will trigger a penalty equal to 180 days’ interest on the amount withdrawn.
Rising Bank, founded in 2018, is the online division of Midwest BankCentre. Midwest BankCentre, in turn, traces its history back to 1906 in St. Louis, Mo.
Colorado Federal Savings Bank — 2.95% APY, $5,000 minimum deposit
Colorado Federal Savings Bank’s 24 Month CD requires at least $5,000 to earn at its competitive interest rate. Making a withdrawal from the account before maturity will result in a penalty equal to six months of interest.
Colorado Federal Savings Bank was first founded in 1990 in Greenwood Village, Colo., and changed ownership in 2008. The bank doesn’t have any branches and operates solely online instead.
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 1.67% APY, as of April 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.