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Updated on Saturday, May 1, 2021
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. 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 May 2021
1. 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 270 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 or are an immediate family member of a current member. You can also join Lafayette if you are an existing member of or become a member of the Home Ownership Financial Literacy Council.
2. USALLIANCE Financial — 0.80% APY, $500 minimum deposit
Among USALLIANCE Financial’s wide spread of account options is this high-rate, low-deposit 24-month CD special. Dividends are compounded daily and credited monthly, and you only need $500 to open an account. But try not to make an early withdrawal from this account, as it’ll cost you 360 days of interest on the amount withdrawn.
USALLIANCE Financial was founded in 1966 by IBM employees. Today, USALLIANCE Financial membership depends on your employer, residence, place of worship, school or organizational membership. You also qualify for membership if you join an organization out of the few they offer, which is free for you and set up by USALLIANCE.
3. Evansville Teachers Federal Credit Union — 0.85% 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.
4. Pen Air Federal Credit Union — 0.65% APY, $500 minimum deposit
Deposit just $500 to a Pen Air Federal Credit Union 24-month Certificate for some solid savings at 0.65% 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.
5. CommunityWide Federal Credit Union — 0.80% APY, $1,000 minimum deposit
CommunityWide Federal Credit Union offers a 0.80% 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. Members of three charities — Michiana Goodwill Boosters, Marine Corps League of St. Joseph Valley, and Habitat for Humanity Helpers — are also eligible.
6. Veridian Credit Union — 0.80% APY, $1,000 minimum deposit
Take advantage of Veridian Credit Union’s 21-month special certificate at this rate that earns even more than the credit union’s 24-month option. Alongside the low minimum opening deposit, you’ll also need a $5 minimum share deposit to open this CD. Interest is compounded and credited quarterly on the CD, which automatically renews. You’ll forfeit 180 days’ interest on early withdrawals, whether you’ve earned it or not; if not yet earned or interest has already been paid out, the amount will be subtracted from the principal.
Veridian was originally founded in Iowa as John Deere Employees Credit Union in 1934. If you live outside the Iowa communities it serves, you are eligible to join if you are a member of Dwolla, a financial technology company.
7. Comenity Direct — 0.75% 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.
8. Wings Financial Credit Union — 0.65% APY, $10,000 minimum deposit
Investing anywhere between $10,000 and $99,999.99 will net you this rate. Rates above and below that threshold aren’t far off, however, in the event you have either more or 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.
9. NexBank — 0.75% APY, $10,000 minimum deposit
You’ll need $10,000 to score the high rate on this solid, simple 24-month CD from NexBank, but you won’t pay any monthly fee. (The maximum amount you’re allowed to contribute is $240,000.) The certificate can be easily opened online and will automatically roll over at the end of the term. There is a penalty of 6 months’ interest if you withdraw funds before the maturity date.
In addition to its personal banking options, NexBank offers institutional, mortgage and commercial banking. The bank is headquartered in Dallas.
10. Hiway Federal Credit Union — 0.70% 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 Hiway Credit Union Foundation or by becoming a member of the Association of the United States Army for $40.
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 0.47% APY, as of April 2021.
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.