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The Best Health Savings Accounts in 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

So, you need to choose a health savings account (HSA) to go along with your new health insurance plan. There are plenty of options out there, and it’s easy to get overwhelmed. The best savings accounts help you save money with high interest rates and low fees—your HSA should be no different. With a high-yielding HSA, you can cover your out-of-pocket medical expenses and boost your savings at the same time.

We’ve taken the work out of finding the best health savings accounts on the market. Using data from DepositAccounts.com (similar to MagnifyMoney, a LendingTree-owned company) we scoured more than 17,100 nationwide banks and credit unions to find the highest health savings account rates available. To ensure quality and availability, we excluded institutions with a DepositAccounts health rating below a B and credit unions with restrictive membership requirements.

Health savings account deposits at all of the institutions listed below are insured by the FDIC or NCUA.

The 10 best health savings accounts in 2019

Institution
APYMinimum balance to earn APY
Evansville Teachers FCU2.01%$500
Connexus Credit Union
1.50%$15,000
Summit Credit Union1.15%$10,000
First Technology Federal Credit Union1.00%$0
The Adirondack Trust Company1.00%$1
Lake Michigan Credit Union1.00%$5,000
Elements Financial1.00%$10,000
Interior Federal Credit Union0.80%$5,000
Veridian Credit Union0.75%$50
Matadors Community Credit Union0.75%$5,000

Evansville Teachers FCU: 2.01% APY, $500 minimum deposit

Evansville Teachers FCU’s Health Savings Checking account earns at a great interest rate on all balances of $500 and over. Plus, there’s no maintenance fees. You’ll need at least $25 to open the account. You can also benefit from check writing abilities, debit card access and payroll deductions with an ETFCU HSA.

ETFCU also offers five HSA share certificates with term lengths ranging between one to five years. Each require $1,000 to open and earn at competitive interest rates. However, ETFCU doesn’t recommend you use HSA share certificates unless you’ve had an HSA established for a while, since locking money in share certificates make it much harder to to dip into your funds.

You can find Evansville Teachers Federal Credit Union locations in Indiana and Kentucky. The credit union is also a member of the Alliance One ATM network, which offers fee-free access to about 5,000 ATMs. ETFCU was started by several teachers in Evansville, Ind. in 1936 — but you don’t have to be a teacher to qualify for ETFCU membership, though.

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on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

Connexus Credit Union: 2.00% APY, $15,000 minimum deposit

Connexus Credit Union also offers a high health savings account rate, but you’ll need at least $15,000 in your account to earn at that rate. Still, you can earn at decent rates on all other balances larger than $100, with higher balances benefiting best. The account doesn’t require a minimum balance or charge a monthly fee. You can request an HSA debit card when you open your account for use at Connexus ATMs.

You can find Connexus branches and ATMs in Wisconsin, Minnesota, Ohio and New Hampshire. Connexus is also part of the CO-OP Shared Branch network, which gives you access to more than 5,600 Shared Branches and more than 54,000 surcharge-free ATMs through both CO-OP and MoneyPass. To open an account with the credit union, you’ll need to become a Connexus Credit Union member.

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on Connexus Credit Union’s secure website

NCUA Insured

Summit Credit Union: 1.15% APY, $10,000 minimum deposit

You’ll need at least $10,000 in your Summit Credit Union Health Savings Account to earn at the most competitive health savings account rate. All other balances still earn interest, but the lower the balance, the lower the rate. Luckily, there’s no minimum deposit requirement, nor is there a pesky monthly fee. The Summit HSA comes with a free debit card, which you can use at Summit, Cirrus and Nyce ATMs.

Summit Credit Union was founded as CUNA Credit Union in 1935 in Madison, Wis.; you can find the credit unions branches throughout southern Wisconsin. Notably, unlike many credit unions, Summit Credit Union has an open charter, which opens up membership to anyone. You’ll need to open Primary Savings account with $5 to become a member.

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NCUA Insured

First Technology Federal Credit Union — 1.00% APY, $0.01 minimum deposit

First Technology Federal Credit Union’s HSA Checking account is easy to open and own. In addition to its decent rate, it doesn’t charge HSA setup or monthly service fees, nor are there any minimum balance requirements. You just need at least $0.01 to open the account and to start earning interest. To open this HSA, you can call First Technology FCU at 855-855-8805.

You’ll receive a free HSA debit card with the account, which you can use at over 30,000 CO-OP ATMs. You can also visit over 40 First Tech branches and access more than 5,000 CO-OP Shared Branch locations.

You can qualify for a First Tech membership depending on your employment or residence. First Technology Credit Union was founded in 1952 by members of Hewlett-Packard and Tektronix. You can find First Tech branches, known as Experience Centers, in California, Colorado, Georgia, Idaho, Massachusetts, Oregon, Puerto Rico, Texas and Washington.

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on First Technology Federal Credit Union’s secure website

NCUA Insured

The Adirondack Trust Company: 1.00% APY, $1 minimum deposit

To get started with an Adirondack Trust Company Health Savings Account, you’ll only need to deposit $1 — after that, there’s no other minimum balance requirement to earn interest. To access your health savings account, you can take advantage of free unlimited check writing and free ATM access with your ATC HSA Visa debit card. Getting paper statements on this account will cost $4, while using online banking will still cost you $2.

Founded in 1901 in upstate Saratoga Springs, N.Y., ATC maintains 13 branches along the Adirondack Mountains area and offers access to two Amsure branches in Saratoga Springs and Albany, N.Y.

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on The Adirondack Trust Company’s secure website

Member FDIC

Lake Michigan Credit Union: 1.00% APY, $5,000 minimum deposit

While you’ll only need $5 to open a Lake Michigan Credit Union, you’ll need at least $5,000 in your health savings account to earn at the listed APY; balances below $5,000 will have a much lower rate. The account doesn’t charge a monthly service fee and comes with a free debit card. You can use this debit card to pay for your medical costs and withdraw cash at any LMCU branch. You can also access your LMCU HSA funds through unlimited check writing and online banking.

Founded in 1933, Lake Michigan Credit Union offers open and free membership. As you might expect, you can find LMCU branches in Michigan, but there are also several branches in Florida. Plus, in addition to LMCU ATMs, you can also take advantage of over 55,000 Allpoint ATMs.

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on Lake Michigan Credit Union’s secure website

NCUA Insured

Elements Financial: 1.00% APY, $10,000 minimum deposit

You can benefit the most from Elements Financial’s HSA if you have $10,000 available to set aside for future medical expenses; lower balances (of $100 and over) still earn interest, but at lower rates. The account does charge a $4 monthly fee, but you can avoid it by averaging a daily balance of at least $2,500.

The account includes a free Visa debit card, which you can use for purchases and to access your funds with over 78,000 ATMs worldwide through the Allpoint, CO-OP and Alliance One networks. In addition to these ATMs, you can visit Elements Financial branches and over 5,000 CO-OP Shared Branches in all 50 states and 50 countries.

Elements Financial is a credit union that requires membership before you open an account. Founded in 1930, it currently serves employees from over 135 companies in the U.S. If your company is an Elements partner, you can open a checking or savings account or complete an application for a loan or credit card to start the application process.

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on Elements Financial’s secure website

NCUA Insured

Interior Federal Credit Union: 1.25% APY, $25,000 minimum deposit

Interior Federal Credit Union’s HSA earns its great interest rate on balances of $25,000 and over. All other balances earn at lower interest rates, with balances of $5,000 and over benefitting best of those. The account doesn’t require a minimum opening deposit, nor does it charge a monthly fee.

The Interior FCU Health Savings Account includes an HSA Visa debit card, which you can use for your medical purchases and at over 55,000 surcharge-free ATMs worldwide, including those at Walgreens, 7/11 and WaWa. Interior FCU has only two branches, one in Washington D.C. and one in Reston, Va. However, you’ll also have access to 5,600 Shared Branches/Service Centers in the country through the CO-OP network.

Interior FCU has been around since 1935. To open an HSA with the credit union, you’ll first need to be a member with a Primary Savings account. You can be eligible for an Interior FCU membership in a number of ways, often depending on your place of employment.

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on Interior Federal Credit Union’s secure website

NCUA Insured

Veridian Credit Union — 0.75% APY, $50 minimum balance

To get started with Veridian Credit Union’s HSA Savings, you’ll need at least $50 to start earning interest. There is a $2 monthly service fee associated with the account.

Veridian Credit Union was founded in 1934 by John Deere employees in Waterloo, Iowa. It has locations in Iowa and Nebraska. Veridian membership is open to residents and employees within select counties, family or household members of current members and eligible individuals, Iowans with disabilities as defined by the Americans with Disabilities Act of 1990 and registered users of Dwolla.

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on Veridian Credit Union’s secure website

NCUA Insured

Matadors Community Credit Union: 0.75% APY, $5,000 minimum deposit

The HSA from Matadors Community Credit Union requires a minimum opening deposit of $100, but you’ll need at least $5,000 to earn the highest rate tier on the account — you’ll still earn interest with balances of $100 and over, just at lower rates. There’s also a $3 monthly fee on the account.

In addition to a free MasterMoney Debit Card, you’ll also have use of unlimited check writing abilities to use your HSA money. You can use your debit card to make your medical purchases, and at Matadors Community CU and 30,000 fee-free CO-OP ATMs. You can also visit two Matador branches in Chatsworth and Northridge, Calif. or over 5,000 CO-OP Shared Branches. MCCU offers membership to employees of partner employer groups in the San Fernando, Simi and Santa Clarita Valleys of California.

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on Matadors Community Credit Union’s secure website

NCUA Insured

How to use your HSA wisely

Health savings accounts are used only for medical expenses, and if you shop around you can earn interest on your balances with the right account. But did you know HSAs offer tax benefits, too? You fund an HSA with pre-tax dollars, which lowers your taxable income in the year you make the deposit. As long as you spend HSA funds on approved medical expenses, it doesn’t get taxed. If you do use your HSA funds for something other than approved medical expenses, you may get hit with a 20% tax penalty.

This HSA tax advantage can come in especially handy in retirement. Funding an HSA today reduces your tax burden come tax time. If you wait until retirement to make those withdrawals, you can turn your HSA into a significant retirement contribution. Not only has the balance been earning interest for years, but now you can use that money for medical expenses, which tend to pile up in retirement. Plus, after you reach age 65, you can use your HSA for non-medical expenses without triggering the 20% tax penalty, although the withdrawals are taxed like normal income, similarly to IRA withdrawals. This also applies in the event you become disabled or die.

HSA requirements

You can generally open a health savings account if you’re already covered by a high-deductible health plan (HDHP). This works well since the HSA funds can help you cover the higher out-of-pocket costs that usually come with having an HDHP. To qualify for an HSA, you also can’t have other health coverage, be enrolled in Medicare or be claimed as a dependent on someone else’s tax return.

HSA contribution limits

As set by the IRS, the amount you can contribute to your health savings account will depend on your HDHP coverage, your age, the date you become eligible and the date you stop being eligible. For 2018, if you had self-only HDHP coverage, you can contribute up to $3,450 to your HSA. If you had family HDHP coverage, you can contribute up to $6,900.

For 2019, the contribution limits for self-only HDHP coverage is $3,500 and $7,000 for family HDHP coverage.

For tax year 2018, you can make HSA contributions until April 15, 2019. Even if you weren’t eligible in 2018, you can still make HSA contributions until that date for the months you were eligible. If you have an employer contributing to your HSA, they can do so from Jan. 1, 2019 to April 15, 2019. They just have to notify you and the account trustee that the contributions are allocated for 2018.

HSA vs. FSA

A flexible spending account, or FSA, is another type of supplemental medical spending account. Like a health savings account, FSAs are also funded with pre-tax dollars to use towards qualified medical expenses like prescriptions and copayments. FSAs are employer-sponsored, however, and are usually funded through voluntary salary contributions, but your employer can also contribute. You cannot open an FSA if you’re self-employed. No taxes are deducted from your contribution. For 2018, you cannot contribute more than $2,650 to an FSA.

What further sets FSAs apart from HSAs is that you must use the money in an FSA by Dec. 31 of the contribution year, unless you’re granted a grace period or a $500 carryover option by your employer. A big drawback to FSAs is that if you don’t use the money in the account on time, your employer gets those funds. This is also true if you were to leave the company. To the opposite, the funds in an HSA are yours to keep even if you leave your company.

Health savings account vs. online savings accounts

While health savings accounts help you designate funds toward medical expenses, most HSAs don’t earn at the competitive rates we’ve come to see from online savings accounts. A $10,000 deposit into a health savings earning 2% APY would yield $200 after a year of annual compounding interest. This doesn’t fall too far behind some of the best online savings accounts. A savings account earning 2.45% would yield only $45 more than the HSA after a year.

Still, you’ll find plenty more high-yield options to really boost your savings by looking at online savings accounts, and not just for medical expenses. Plus, you typically don’t have to meet any requirements to open a savings account, like having an HDHP or meeting credit union membership qualifications.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here

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The Best Credit Union CD Rates – November 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Certificates of deposit (CDs) are a great way to safely store your savings at a financial institution, as they offer a guaranteed rate of return, and CD rates tend to be higher than those on traditional savings accounts. Maybe you’ve even heard that credit union CD rates offer higher returns—but is that really the case?

On average, yes. As of June 2019, the average one-year credit union CD had a 1.42% annual percentage yield (APY), compared to the 1.11% APY average among one-year bank CDs.

Using data from DepositAccounts.com, another LendingTree company, we identified the top one-year credit union CD rates, as of October 9, 2019. We then eliminated any credit union with a health rating lower than a B and identified the top offerings in three categories: restricted, no cost, and best banking app. If there was a tie by APY, we went with the product with the lower minimum deposit. Here are the best one-year credit union CD rates.

Best credit union CD rates with restricted memberships or membership fees

Each of these credit unions have restricted membership criteria, but don’t let that scare you away. If you don’t meet their membership criteria, it’s often possible to make a small donation to their charity of choice in order to become eligible for membership. Furthermore, these credit union CD rates offer some of the highest-returning share certificates out of any category.

Wheelhouse Credit Union — 11-Month CD, 2.50% APY, min. deposit $1,000

11 Month Certificate Special - New Money from Wheelhouse Credit Union
For a limited time, Wheelhouse Credit Union is offering an outstanding yield on this 11-month certificate of deposit. At 2.50% APY, this among the best returns you can find on a credit union CD with a term under one year. In addition, Wheelhouse is offering a 22-month certificate yielding an impressive 2.75% APY, and a 33-month certificate earning 2.86% APY. The minimum deposit for all three certificates is $1,000.

Membership in Wheelhouse Credit Union is open to everyone who lives or works in California’s San Diego County, employees of Wheelhouse’s partner employers, or anyone who is a member of the Zoological Society of San Diego.

 

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on Wheelhouse Credit Union’s secure website

NCUA Insured

Communitywide Federal Credit Union — 12-Month CD, 2.25% APY, min. deposit $1,000

12 Month Share Certificate from Communitywide Federal Credit Union For over 50 years, Communitywide Federal Credit Union has provided banking services to the citizens of northern Indiana, and now a completely revamped online and mobile portal brings its great rates to you, wherever you are. Membership in Communitywide FCU is open to members of the Michiana Goodwill Boosters or the Marine Corps League of St. Joseph Valley, as well as employees of over 40 companies in the central Midwest region.

In exchange for a $1,000 minimum deposit, Communitywide’s 12-month share certificate earns a 2.25% APY. One great feature is flexibility regarding your dividends, which may be compounded in the certificate, deposited to another share certificate, or transferred to another account. Another feature to understand is that there is no automatic renewal of Communitywide’s share certificates, which could be a good thing for savers who like to be reminded to survey the best rates available before rolling over their investments.

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

Dow Chemical Employees’ Credit Union — 12-Month CD, 2.25% APY, min. deposit $1,000

12 Month Simple CD from Dow Chemical Employees' Credit UnionYou do not need to work for Dow Chemical to get this competitive rate on a share certificate — membership is open to anyone who joins the Midland Center for the Arts. In addition, current and retired employees of Dow Chemical, Dow Corning, and their affiliates are also eligible.

With a minimum deposit of $1,000, the 12-month CD offered by Dow Chemical Employees’ Credit Union earns a 2.25% APY. Note that this certificate is not eligible for DCECU’s annual payout of the credit union’s earnings to members. Certificates that are eligible for the member giveback yield a lower APY.

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on Dow Chemical Employees' Credit Union’s secure website

NCUA Insured

State Department Federal Credit Union– 12 Month Share Certificate, 2.22% APY, min. deposit $500

12 Month Certificate from State Department Federal Credit UnionDon’t worry, you don’t need a security clearance from the federal government to join this credit union—you simply need to sign up with the American Consumer Council and you can begin enjoying the benefits of your new membership.

One of those benefits, should you so choose, includes this 12-Month Share Certificate, which allows you to park your money in an account earning 2.22% APY with a minimum deposit of at least $500. You’ll have to pay 180 days worth of interest if you withdraw your money from the certificate before it matures, but it’s worth noting you can make a partial early withdrawal — and pay the penalty — without closing out the account completely.

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on State Department Federal Credit Union’s secure website

NCUA Insured

USALLIANCE Financial — 12-Month certificate account, 2.20% APY, min. deposit $500

12 Month CD from USALLIANCE Financial
USALLIANCE Financial is offering a 12-month certificate account with a competitive APY of 2.20%.

Membership in USALLIANCE Financial is open to residents of certain localities in Massachusetts, Connecticut and New York, as well as members of the American Consumer Council and a raft of other professional associations.

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on USALLIANCE Financial’s secure website

NCUA Insured

Connexus Credit Union – 12 Month Share Certificate, 2.20% APY, min. $5,000

12 Month Certificate from Connexus Credit UnionThis Wisconsin-based credit union cracks our ranking of the best credit union CD rates for its 12 -month share chertificate’s 2.20% APY. It requires a bit of a hefty minimum deposit of $5,000 to open an account, but its APY is fairly generous compared to its competitors. Anyone can join Connexus by joining the Connexus Association and making a $5 donation.

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on Connexus Credit Union’s secure website

NCUA Insured

Technology Credit Union – 12 – 17 Month Certificate, 2.15% APY, min. $1,000

12 - 17 Month Flextime CD from Technology Credit Union
The Technology Credit Union offers a slew of CDs with competitive rates, but its 12 to 17 month term CD stands out with a 2.15% APY and a low minimum deposit of just $1,000. It’s worth noting that if your certificate is not funded within 30 days of opening, it will be closed automatically. Technology Credit Union is open to anyone who joins the Financial Fitness Association, which has an $8 fee.

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on Technology Credit Union’s secure website

NCUA Insured

Self-Help Credit Union – 12-Month Certificate, 2.12% APY, min. $500

12 Month CD from Self-Help Credit UnionThe Self-Help Credit Union’s 12-month certificate will certainly help out your finances, with a 2.12% APY and a minimum deposit of just $500. Membership to the Self-Help Credit Union is open to anyone who joins the Center of Community Self-Help, which has a membership fee of $5.

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NCUA Insured

Best CD rates for credit unions with no cost to join

The thing about credit unions is that they’re not usually just open to anyone. You usually need to meet some membership criteria in order to get in and get access to all of their really nice products. These credit unions, however, will let you in for free regardless of your personal details. (Note: Only two credit unions met our criteria for this list.)

Unify Financial Credit Union – 1-Year Share Certificate, 1.75% APY, min. deposit $1,000

UNIFY Financial Credit Union
Unify FCU offers the highest interest rates on CDs (which it calls share certificates) of any credit union with no cost to join. The interest rate on their 12-month CD, for example, is 1.75%. You’ll need to deposit a minimum of $1,000 to open this CD. If you withdraw your money early, however, you’ll face a substantial penalty.

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on UNIFY Financial Credit Union’s secure website

NCUA Insured

NASA Federal Credit Union – 1-Year Share Certificate, 1.50% APY, min. deposit $1,000

NASA Federal Credit Union
If the rigid inflexibility of CDs makes you leery, NASA FCU might be your best bet. They have a lot of flexible certificates, such as add-on certificates that let you start with as little as $250, and bump-rate certificates that let you opt for a one-time interest rate increase if rates go up. You can even take out a loan from your certificate should you need the cash before it’s matured. You can join NASA FCU with a complimentary membership to the National Space Society.

If you do need to make an early withdrawal, you will face a penalty of 180 days’ worth of interest.

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on NASA Federal Credit Union’s secure website

NCUA Insured

Best CD rates for credit unions with the best mobile apps

By their very nature, CDs aren’t something that require constant attention, poking, and prodding. It’s a set-it-and-forget-it kind of a deal, so you won’t need any spiffy banking apps to use CDs.

But, if you’d like to switch all of your banking to the same institution that holds your CDs, it might be a wise idea to consider one of these credit unions if you’re a digital junkie. Most credit unions lag behind their bank compatriots in terms of mobile banking apps, but these credit unions offer top-notch mobile apps, according to MagnifyMoney’s 2018 mobile banking app analysis.

Eastman Credit Union – 18-Month Investment Certificate, 2.40% APY, min. deposit $1,000

18 Month Investment Certificate Special from Eastman Credit Union Eastman Credit Union has pretty restrictive membership requirements. You’ll have to be an employee (or a family member of an employee) of one of their select employers, or live in certain parts of Tennessee, Texas, or Virginia.This special offer yields 2.40% APY for an 18-month investment certificate deposit, with a minimum deposit of $1,000. If you withdraw your money before the CD matures, you’ll owe a penalty fee of 90 days’ worth of dividend earnings.

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on Eastman Credit Union’s secure website

NCUA Insured

Delta Community Credit Union – 1-Year Certificate, 1.99% APY, min. deposit $1,000

Delta Community Credit Union
There are many ways to join Delta Community CU, such as living in certain parts of Georgia, being a member of one of their select employers, or being a member of one of their partner organizations. Interestingly, citizens of many countries like Argentina, France, and Peru are also eligible to join.

Delta Community CU used to be the lowest-earning credit union on our list, but recently increased the APY on this product from 1.10% to 1.99%. The early withdrawal penalty is 90 days’ worth of interest on a 12-month CD.

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on Delta Community Credit Union’s secure website

NCUA Insured

SECU – 1-Year CD, 1.85% APY, min. deposit $500

SECU
The State Employees Credit Union of Maryland (SECU) is the largest credit union in the state of Maryland and is among the largest credit unions in the United States. Membership is open to employees, retirees and contractors of the state of Maryland, employees of Anne Arundel County, alumni, students, faculty and staff of University System of Maryland Schools, employees of organizations located in Maryland that receive federal, state or local funding, and over 500 local Select Employer Groups. SECU offers a decent rate of 1.85% on its 1-year CD.

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on SECU’s secure website

NCUA Insured

Wright-Patt Credit Union – 12 to 17-Month Certificate, 1.71% APY, min. deposit $500

Wright-Patt Credit Union
Unlike many credit unions, you can’t just make a simple donation to join Wright-Patt CU if you fail to meet their membership criteria. You need to live in certain areas of Ohio, be associated with Wright-Patterson Air Force Base, or be an employee of their select employer group, among other options.

Wright-Patt offers an 12 to 17-month certificate yielding a decent return of 1.71% APY. withdrawal penalties vary depending on the original term of your CD, however they’ll be anywhere between 5-12 months’ worth of dividends.

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on Wright-Patt Credit Union’s secure website

NCUA Insured

Redstone Federal Credit Union – 12 Month MemberPlus Share Certificate, 1.56% APY, min. deposit $1,000

Redstone Federal Credit Union
You can’t just make a simple donation to join to Redstone Federal Credit Union if you fail to meet their membership criteria. You need to be a government employee or contractor, a member of the military, reserve, or National Guard, or affiliated with a number of organizations listed on their website among other options.

However, if you do qualify for membership, you could earn an APY of 1.56% with a minimum deposit of $1,000. Redstone FCU has compounding and non-compounding certificates, which allow you to have the option to withdraw interest earned or not throughout the term of the certificate.

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NCUA Insured

3 questions to consider before opening a credit union CD

Banks are more likely to call their products certificates of deposit, while credit unions often refer to them as share certificates. Aside from the name, the biggest difference between the two is that credit unions have higher average annual percentage yields (APYs) than traditional banks, as of September 2018. That’s good news: It means more money back in your pocket when the CD matures (i.e., reaches the end of its term and is available for withdrawal).

There really is no difference in safety between depositing money in a CD with a credit union versus a bank, as long as they participate in either the National Credit Union Administration (NCUA) for credit unions, or the Federal Deposit Insurance Corporation (FDIC) for banks.

According to Neal Frankle, a Los Angeles-based Certified Financial Planner with Wealth Pilgrim, deposits of up to $250,000 per financial institution are “backed by the full faith and credit of United States Government, so it’s pretty solid.”

For the most part, choosing a CD at a bank or a credit union boils down to your preference as a consumer: Do you want to be a bank customer or a member of a credit union? Here’s a primer on the differences.

The biggest advantage of credit union CDs over bank CDs is that you can likely earn more interest. But with both products, the longer the CD term, the more interest you will earn. And with a CD laddering strategy, you can have the best of both worlds: frequent access to your money, yet you can still keep it locked away in high-interest, long-term CDs.

Beyond that, the disadvantages of opening a credit union CD are the same as if you’re opening a CD with a bank. You can’t access that money without paying an early withdrawal penalty until the CD matures. While CDs do offer some of the highest rates for any financial product you’re likely to come across at a bank or credit union, they still don’t really earn great interest. If you’re investing for the long-term (like retirement savings), your money is better invested in the riskier (but higher-earning) stock or bond market.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Best of

The Best 2-Year CD Rates in 2019

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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

InstitutionAPYMinimum deposit amount
Pennsylvania State Employees Credit Union2.00%$500
Wheelhouse Credit Union2.50%$1,000
Dow Chemical Employees Credit Union2.40%$5,000
MAC Federal Credit Union2.40%$1,000
Connexus Credit Union2.40%$5,000
State Department Federal Credit Union2.32%$500
Dover Federal Credit Union2.30%$500
CommunityWide Federal Credit Union2.30%$1,000
First National Bank of America2.25%$500
Nationwide by Axos Bank2.05%$500

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.

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NCUA Insured

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.

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NCUA Insured

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.

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NCUA Insured

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.

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NCUA Insured

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.

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NCUA Insured

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.

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NCUA Insured

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.

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NCUA Insured

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.

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on Communitywide Federal Credit Union’s secure website

NCUA Insured

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.

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Member FDIC

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.

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FDIC Insured

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.

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Lauren Perez
Lauren Perez |

Lauren Perez is a writer at MagnifyMoney. You can email Lauren here