Review
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Are you looking to maximize your savings without much risk? A certificate of deposit (CD) is a great low-risk investment that offers a guaranteed return. The 2-year CD is a popular choice because it provides a decent return over a short period.
However, not all CDs are created equal. Our experts bring you the best 2-year CD rates to help you get the most out of your investment.
Rates as of May 14, 2024
| Bank & CD Offer | APY | Term | Min. Deposit | Next Steps |
|---|---|---|---|---|
Member FDIC.
| APY: 4.50% | Term: 2 Year | Min. Deposit: $500 | |
Member FDIC.
| APY: 4.00% | Term: 2 Year | Min. Deposit: $2,500 | |
Member FDIC.
| APY: 4.00% | Term: 2 Year | Min. Deposit: $0 | |
Member FDIC.
| APY: 4.50% | Term: 2 Year | Min. Deposit: $2,500 | |
Member FDIC.
| APY: 4.65% | Term: 2 Year | Min. Deposit: $1,500 | |
Member FDIC.
| APY: 4.50% | Term: 2 Year | Min. Deposit: $500 | |
| APY: 4.50% | Term: 2 Year | Min. Deposit: $2,500 | |
Member FDIC.
| APY: 4.50% | Term: 2 Year | Min. Deposit: $1,000 | |
Member FDIC.
| APY: 4.20% | Term: 2 Year | Min. Deposit: $500 | |
Member FDIC.
| APY: 4.20% | Term: 2 Year | Min. Deposit: $0 | |
Member FDIC.
| APY: 4.00% | Term: 2 Year | Min. Deposit: $0 |
Sorry, we didn't find any CDs that meet those criteria.
How to find the best 2-year CD rates
There are many CD options out there, so it can be overwhelming to decide where to put your money. The key is to shop around and compare rates from different banks and credit unions.
Typically online banks and credit unions have the best rates. These financial institutions usually offer higher rates than brick-and-mortar banks due to their lower overhead costs. However, it's wise to shop around and compare CD rates from traditional banks, too.
Before locking your money into a CD account, ensure that it is protected in case of bank failure; for example, the FDIC protects banks. If your CD is at a credit union, it should be under NCUA insurance.
By being smart with your money and staying informed, you can find the best 2-year CD rate to meet your financial goals.
More details about the best 2-year CD rates
Quontic CDs
Bottom Line
Quontic Bank offers CDs with terms ranging from six months to five years. It offers most of the terms one would expect, though it is missing a four-year CD, so it may not be ideal for those hoping to build a CD ladder. Its rates are competitive, especially on its longer term CDs, and its minimum deposit is more affordable than what you see with some other top banks.
Minimum Deposit $500
| 6 Mo. APY | 1 Yr. APY | 2 Yr. APY | 3 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|
| 5.05% | 4.50% | 4.50% | 4.40% | 4.30% |
APY = Annual Percentage Yield
Discover® Bank CD
Bottom Line
Discover has a higher minimum balance requirement than some of its competitors, but its rates are competitive and you don't have to worry about getting hit with any fees unless you withdraw funds via wire transfer or choose to withdraw from your CD before it reaches its maturity date. It also offers some unique term lengths, including CDs as short as three months and as long as 10 years.
Minimum Deposit $2,500
| 3 Mo. APY | 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 30 Mo. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY | 7 Yr. APY | 10 Yr. APY |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2.00% | 4.25% | 4.25% | 4.70% | 4.40% | 4.00% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
APY = Annual Percentage Yield
Barclays Online CD
Bottom Line
Barclays offers competitive rates on most common CD terms with no minimum balance requirements. There are no monthly fees, so you likely won't lose money unless you try to withdraw your funds early. The only common CD term missing is a six-month CD -- in fact, there's no CD term less than one year, but those interested in building longer-term CD ladders will find plenty to like here.
Minimum Deposit $0
| 6 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|---|
| 4.85% | 5.00% | 4.50% | 4.00% | 3.50% | 3.50% | 3.75% |
APY = Annual Percentage Yield
LendingClub CD
Bottom Line
LendingClub CDs don't skimp on interest, offering competitive APYs for all six of their CD terms, from six months to five years. They're also FDIC insured. One downside is that you'll need to commit at least $2,500 to open an account.
Minimum Deposit $2,500
| 6 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|
| 5.00% | 5.15% | 5.00% | 4.50% | 4.30% | 4.00% |
APY = Annual Percentage Yield
Bread Savings CD
Bottom Line
Comenity Direct CDs (the bank behind Bread Savings) are available in many of the most popular terms, making it a flexible high-yield CD to consider for differing needs. There's also no monthly maintenance fee. But its $1,500 minimum deposit is a little steeper than what some of its competitors charge.
Minimum Deposit $1,500
| 1 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|
| 5.25% | 4.65% | 4.25% | 4.15% | 4.15% |
APY = Annual Percentage Yield
Prime Alliance Bank CD
Bottom Line
The rates on Prime Alliance Bank's CDs are decent enough, but you can find better. However, the relatively low $500 minimum deposit makes these more available to the everyday saver -- or someone looking to build a CD ladder.
Minimum Deposit $500
| 6 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|---|
| 4.95% | 4.95% | 4.75% | 4.50% | 4.25% | 4.00% | 4.00% |
APY = Annual Percentage Yield
Sallie Mae CD
Bottom Line
Sallie Mae may not be well-known for its banking services, but it offers CDs with competitive rates and the typically available terms. But the $2,500 required minimum deposit to open one will make them out of reach for many savers.
Minimum Deposit $2,500
| 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|---|
| 5.10% | 5.15% | 5.25% | 4.90% | 4.50% | 4.00% | 4.00% |
APY = Annual Percentage Yield
Bask Bank CD
Bottom Line
You get a few straightforward CD terms to choose from (from 6 months to 2 years), and a competitive APY from Bask Bank. But you will need to pony up $1,000 to open one of these CDs.
Minimum Deposit $1,000
| 6 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY |
|---|---|---|---|
| 5.15% | 5.20% | 4.50% | 4.50% |
APY = Annual Percentage Yield
Marcus by Goldman Sachs High Yield CD
Bottom Line
Savers have the potential to create effective CD ladders through Marcus, as it provides competitive rates through the most common CD terms. The minimum deposit is $500 and withdrawal penalties are moderate compared with competitive banks.
Minimum Deposit $500
| 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY | 6 Yr. APY |
|---|---|---|---|---|---|---|---|---|
| 4.80% | 4.90% | 4.90% | 4.60% | 4.20% | 4.15% | 4.05% | 4.00% | 3.90% |
APY = Annual Percentage Yield
Synchrony Online CD
Bottom Line
Perhaps one of the lesser-known names on the list, Synchrony is a full-line bank with a 90-year history. Synchrony's CDs are notable for competitive rates at most term lengths, plus low or no minimum deposits.
Minimum Deposit $0
| 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|---|---|
| 4.80% | 4.90% | 4.80% | 4.50% | 4.20% | 4.15% | 4.00% | 4.00% |
APY = Annual Percentage Yield
Capital One 360 CD
Bottom Line
Backed by Capital One's well-known brand, the Capital One 360 CDs offer competitive rates across many common terms, though they're stronger in durations of a year or longer. There's no minimum deposit, so savers can benefit even if they don't have a large sum to deposit. Check Capital One's web site for the most up-to-date rates.
Minimum Deposit $0
| 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY |
|---|---|---|---|---|---|---|---|
| 4.25% | 4.25% | 5.00% | 4.45% | 4.00% | 4.00% | 3.95% | 3.90% |
APY = Annual Percentage Yield
What is a 2-year CD?
A 2-year CD, or certificate of deposit, is a bank deposit account that requires the account holder to leave their funds on deposit for a period of two years. In exchange for leaving the money on deposit, a 2-year CD pays a fixed interest rate, or APY, for the entire term.
The rates paid on 2-year CDs vary according to market conditions, as well as among different financial institutions. Money in a 2-year CD can be withdrawn early, but doing so will typically result in a penalty equal to a few months' worth of interest.
How to compare the best 2-year CD rates
When seeking the best 2-year CD rates, it's crucial to understand the factors that impact a good rate. Several financial institutions will offer high interest rates. However, don't just settle for the first offer that comes your way.
Here are a few factors to keep in mind when comparing 2-year CDs.
Minimum deposit
Consider whether you can meet the minimum deposit requirement for each CD you're considering. Typically, banks require a minimum deposit, which can range from a few hundred dollars to several thousand dollars, to open a CD. If you can't meet the minimum deposit, you may not be able to take advantage of the interest rate being offered.
Fees
Learn whether the bank charges any fees for opening or maintaining the CD. This can eat away at the interest you earn. Be sure to read the terms and conditions carefully to understand any fees associated with the CD.
Withdrawal penalties
Early withdrawal from a CD typically incurs a penalty fee. However, the amount of the fee can vary from one bank to another. Before opening a CD, make sure you understand the penalty fee and how it may impact your savings goals.
Compounding interest
When comparing 2-year CD rates, consider whether the interest on the CD is compounded daily, monthly, quarterly, or annually. The more frequently interest is compounded, the more your savings will grow over time.
Interest payouts
Consider when the bank pays out the interest earned on the CD. Some banks pay out interest at the end of the 2-year term, while others pay out annually or monthly. The more frequently interest is paid out, the more you can earn in interest over time.
CD maturity
It's also important to consider what happens when the CD matures -- that is, when the CD term ends and the funds are available for withdrawal or reinvestment. Most CDs will automatically renew at the end of the term if you don't take action, so be sure to understand the bank's policies regarding CD maturity and how you can reinvest or withdraw your funds.
Bank or credit union reputation
Lastly, review the reputation of the bank or credit union. Check to see if it is FDIC insured or NCUA insured, which means that your deposits are backed by the government. Research the bank's customer service reviews, branches and ATM availability, and online banking options.
Will 2-year CD rates increase in 2024?
At the beginning of 2024, CD rates were at their highest level in several years, and many consumers are wondering if they will continue to rise.
The short answer is that nobody knows what will happen with CD rates. But they tend to move in the same direction as the benchmark interest rates set by the Federal Reserve (specifically the federal funds rate). The Fed's rate hike cycle that started in 2022 and lasted through 2023 is the primary reason CD yields started 2024 at such an elevated level.
However, the overwhelming majority of experts -- including the voting members of the Federal Reserve -- expect rates to start falling later in 2024. So, while there's no guarantee, and CD rates certainly could go higher in 2024, the most likely scenario is the opposite.
Pros and cons of a 2-year CD
Among the various types of CDs, a 2-year CD offers a good balance of yield and flexibility, especially for those who don't want to tie up their money for too long. Here are the pros and cons of choosing a 2-year CD
Pros
- Higher interest rates: Compared to a regular savings account, a 2-year CD typically offers a higher yield, which means you can earn more interest on your money over time.
- Fixed rate: Unlike a variable-rate savings account, where the interest rate can change over time, a fixed-rate CD locks in your rate for the entire term.
- Predictable returns: With a fixed rate and term, you can calculate your total return in advance and plan accordingly.
- Low risk: CDs are FDIC insured, which means that if the bank fails, your money is protected up to $250,000 per depositor.
Cons
- Limited flexibility: Once you deposit your money into a 2-year CD, you typically can't withdraw it without paying an early withdrawal penalty. Therefore, it's important to only invest money that you won't need in the near future.
- Opportunity cost and interest rate risk: While a 2-year CD can provide steady returns, it may not keep pace with inflation or other investment opportunities that offer higher potential returns. Also in a rising interest rate market, the interest rate offered on your 2-year CD may become less competitive than other investment options.
- Low liquidity: Some people may prefer to keep their savings in a more liquid account, such as a savings account or money market account, that they can access any time without penalty.
Alternatives to consider
In addition to a 2-year CD, there are other investment options to consider.
2-year CDs vs. shorter-term CDs
You can opt for a shorter-term CD like a 6-month CD or 12-month CD if you don't want to commit as much money. This can be a good option if you need fast access to your money.
2-year CDs vs. longer-term CDs
On the other hand, if you have extra cash that you're not going to need for a long time, then you should consider a longer-term CD. Longer-term CDs, like a 5-year CD, allow you to lock in an interest rate for a longer period of time.
2-year CDs vs. a high-yield savings account
Another option is a high-yield savings account. While the interest rates are historically not as high as CDs, savings accounts are flexible and allow you to make deposits and withdrawals as needed.
2-year CDs vs. a money market account
A money market account can offer higher rates than a savings account or checking account because they may have higher minimum deposit requirements.
Money market accounts have some restrictions on withdrawals, so this account is a good option for more extended savings goals.
2-year CDs vs. investments
Another option to consider is to invest your money in stocks, bonds, or real estate. Investments like these always come with higher risk. But, for those looking for more significant long-term returns and have a higher risk tolerance, investing can be a good alternative to a CD.
Other CD term lengths to consider
Our CDs methodology
At The Motley Fool Ascent, certificates of deposit (CDs) are rated on a scale of one to five stars, primarily focusing on annual percentage yield (APY) and early withdrawal penalty fees. Our highest-rated CDs generally include competitive APYs without complex qualification tiers, low withdrawal fees, reliable brand trust and reputation, and ease of use.
The Ascent tracks just standard CDs, not IRA, bump up, callable, and other less popular CD accounts. CD rates displayed on this Best 2-Year CD Rates pages are comprised of both the highest CD rates in The Ascent’s universe of tracked rates and featured placements from advertisers. Ordering within lists is influenced by advertiser compensation, including featured placements at the top of a given list.
Learn more about how The Motley Fool Ascent rates bank accounts.
Banks we monitor
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Here are the 100+ financial institutions we've evaluated in our research:
Alliant, Ally, All America Bank, American First Credit Union, American Express® National Bank, Arvest Bank, Aspiration, Axos Bank, B2 Bank, Bank of America, Bank5 Connect, Bank7, Barclays, Bask Bank, Betterment, Bluevine, BMO, Bread Financial, Capital One, Carver Federal Savings Bank, Charles Schwab Bank, Chase, Chime, CIT, Citibank, Citizens Bank, Citizens Savings Bank, Columbia Bank, Connexus Credit Union, Consumers Credit Union, Copper, Cross River Bank, Customers Bank, Discover® Bank, E*TRADEEdward Jones, EverBank, Fidelity, Fifth Third Bank, First Foundation Bank, First Internet Bank of Indiana, First National Bank, First Tech Federal Credit Union, Flushing Bank, Freedom Bank, Generations Bank, GN Bank, Golden 1 Credit Union, Greenlight, Harborstone Credit Union, HSBC, Huntington Bank, Ivella, Kabbage by American Express, KeyBank, Laurel Road, LendingClub, Liberty Bank, Liberty Federal Credit Union, Marcus by Goldman Sachs, Mercury, Municipal Credit Union, Mutual of Omaha, NASA Federal Credit Union, Nationwide Bank, Navy Federal Credit Union, NBKC Bank, New York Community Bank, Northpointe Bank, Novo, OceanFirst Bank, Old National Bank, ONE Finance, OneUnited Bank, Oxygen, Pacific Western Bank, PNC Bank, Ponce Bank, Popular Direct, Presidential Bank, Prime Alliance Bank, Quontic, Radius, Raisin, Redneck Bank, Regions Bank, Relay, Republic Bank of Chicago, Revolut, Salem Five Bank, Sallie Mae, Santander Bank, SchoolsFirst Federal Credit Union, Simple, SoFi, Synchrony Bank, Tab Bank, TD Bank, Third Federal, Truist Bank, U.S. Bank, UFB, Upgrade, USAA, Valley Bank, Vanguard, Varo Bank, Vio Bank, Wealthfront, Wells Fargo, Western Alliance Bank, and Zeta.
FAQs
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A 2-year CD is right for someone who is looking for guaranteed returns with a predictable outcome and is comfortable receiving the invested funds after two years.
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The interest rates for 2-year CDs are typically higher than those for traditional savings accounts, making it a practical choice for anyone who wants to yield better dividends on their savings.
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A 2-year CD is worth it for someone who has a mid- to long-term investment plan who wants to grow their money securely and wants a higher return than a traditional savings account.
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A 2-year CD is a bank deposit account that requires the account holder to leave their funds on deposit for a period of two years. In exchange for leaving the money on deposit, a 2-year CD pays a fixed interest rate, or APY, for the entire term.
Our Banking Experts
David S. Chang, ChFC®, CLU® is an award-winning entrepreneur, keynote speaker, author, and consultant. He has over two decades of experience in the wealth management space and has been featured in dozens of news, radio, and podcast programs nationwide. He currently works as Head of IoT for the West Region of a Fortune 200 company. He is a graduate of the United States Military Academy at West Point and currently a Lieutenant Colonel in the California Army National Guard. He is an East-West Graduate Degree Fellow and has an MBA from the UCLA Anderson School of Management.
Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for The Ascent and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column ("Ask a Fool") that is syndicated in USA Today, and his work has been regularly featured on CNBC, Fox Business, MSN Money, and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.
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