Best 2-year CD rates July 2024

Best 2-year CD rates

• Quontic Bank certificates of deposit.
• Sallie Mae Bank certificates of deposit.
• First Internet Bank certificates of deposit.
• Bread Savings certificates of deposit.
• Service Credit Union share certificate.

Best 2-year CD rates July 2024

Quontic Bank certificates of deposit

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

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On Quontic Bank’s Website

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

CD APY 24 month

4.50%

Minimum deposit requirement

$500

What should you know

With a low minimum deposit requirement to open ($500), and a good APY (4.50%), this 24-month CD would be a good option if you’re starting to build up your savings. Quontic credits CD interest once a month, which you can reinvest or cash out. If you have any questions, you have a choice in how you can contact customer service: by calling on your computer, your phone or via live chat. However, be absolutely sure that you can commit your funds for the whole CD term. Partial early withdrawals aren’t allowed and Quontic stresses that it may not permit you to withdraw CD funds early at all. Even when it’s permitted, the early withdrawal penalty for a 24-month term is 24 months; of interest. If your deposit hasn’t earned that much yield yet, the appropriate amount will be deducted from your principal.

Sallie Mae certificates of deposit

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Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

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On Fiona’s website

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Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

CD APY 24 month

4.50%

Minimum deposit requirement

$2,500

What should you know

Although Sallie Mae primarily helps people save for and afford education, you don’t need to be a (prospective) student to open one of its CDs. Its two-year CD offers a competitive 4.50% APY and its other CDs, especially longer-term ones, have similar top-of-market yields. You’ll need a minimum balance of $2,500 to open an account. That can be a reach for new savers, but isn’t amongst the highest minimum in the market. There are no monthly fees to bring down your earnings and the early withdrawal penalties aren’t steep: 90 days’ interest on CDs with terms of 12 months or fewer; 180 days’ interest on CDs with greater terms. If you’re interested in more than a two-year CD, you have 11 CDs to choose from, with terms ranging between six and 60 months.

Pros and cons

Pros

• Competitive yields.
• No monthly fees.
• Daily compounding interest.

Cons

• High minimum deposit.
• Early withdrawal penalties can affect your principal.
• No checking accounts and limited banking tools.

First Internet Bank certificates of deposit

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

CD APY 24 month

4.76%

Minimum deposit requirement

$1,000

What should you know

First Internet Bank’s two-year CD couples a high 4.76% APY on its two-year CD with a low minimum deposit requirement, which is ideal for new savers. None of its eight CDs with terms ranging between three months and five years have monthly maintenance fees. And while it may not actually be the first bank to have digital services, First Internet Bank is completely online and has a highly-rated mobile app, which earned a 4.8 star rating on the Apple App Store and 4.4 on the Google Play Store. If you need to contact the bank, it offers email, phone and chat customer service options. Before you open a CD here, however, be confident that you won’t need to cash it out early. The early withdrawal penalties are on the expensive side. If you need the funds before the maturity date, you’ll pay 360 days’ interest on CD terms two years and up; 180 days’ on terms from six to 18 months and 90 days’ on three-month terms.

Bread Savings certificates of deposit

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

BLUEPRINT RATING

Our ratings are calculated based on fees, rates, rewards and other category-specific attributes. All ratings are determined solely by our editorial team.

CD APY 24 month

4.65%

Minimum deposit requirement

$1,500

What should you know

If you want to tuck some of your funds away and watch them rise, Bread Financial could help you do it. Its 24-month CD offers an outstanding 4.65% APY, which compounded daily. Overall, the bank offers five CD terms in annual increments from one to five years; each with some APYs that may make your mouth water, including 5.25% APY on a one-year term. There’s a 10-day grace period once you open the CD to increase the deposit amount (if you so desire) and then a 10-day grace period once it matures to cash it out or change it up before it automatically renews. If you need to cash out early, the early withdrawal penalties are pretty standard: 90 days’ interest for terms less than a year, 180 days’ interest for terms from 12 to 36 months’ and 365 days’ interest for terms four years and more.

Service Federal Credit Union share certificate

CD APY 24 month

3.50%

Minimum deposit requirement

$500

What should you know

Don’t let “credit union” scare you away. Anyone can join Service Credit Union by also joining the American Consumer Council (you don’t need to pay for either membership). And, unlike the other best two-year CDs (which are all at online banks), here, you get access to plenty of physical branches via the credit union Co-Op network. Service CU offers a 24-month certificate with 3.50% APY and has a relatively low minimum deposit requirement of $500. You’ve got ten CD terms overall, running from three months to five years, from which to choose. The early withdrawal penalties are pretty standard: 90 days’ dividends for terms less than 12 months; 180 days’ dividends for terms between one and two years; 365 days’ dividends for terms longer than two years.

Compare the best two-year CDs

	STAR RATING	APY	MIN. DEPOSIT
Sallie Mae	5	4.50%	$2,500
First Internet Bank	4.98	4.76%	$1,000
Quontic Bank	4.94	4.50%	$500
Bread Financial	4.92	4.65%	$1,500
Service Credit Union	4.9	3.50%	$500

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Choosing the best 2-year CD rate

All else being equal, it’s smart to take the highest CD rate. Most CD rates are given as an annual percentage yield (APY), which describes how much your deposit would earn each year.

As of June 17, 2024, the average APY for a two-year CD stood at 1.57%, according to the Federal Deposit Insurance Corp. (FDIC). At the same time, some financial institutions were offering two-year CDs with APYs exceeding 5%. 

“[It] can make a huge difference for your future bank balance,” said Ben McLaughlin, president of Raisin (previously SaveBetter).

To find the best CD rate, you can start by looking at what your current bank offers. 

“But don’t sell yourself short by ending the search there,” said McLaughlin. “Be sure to check online for other options, because your local bank may not have the best rates.” 

Ken Tumin, senior industry analyst at the DepositAccounts, said credit unions and online banks tend to provide the best rates for two-year CDs. 

Data from the National Credit Union Administration (NCUA) shows that the national average CD rates offered by credit unions in the first three months of 2023 were, on average, 0.49 percentage points higher than those offered by banks. 

Besides looking at credit unions, “pay close attention to promotional interest rates,” said Michael Ashley Schulman, CFA and chief investment officer at El Segundo, a California-based capital advisor firm. 

You may be able to score a great rate that’s only available for a short time from a smaller organization, which makes the offer to attract new customers. 

Keep in mind, however, that, when the maturity date rolls around, there may not be another stellar promotional rate at the same organization and you may have to look around again.

How to open a 2-year CD

Opening a two-year CD is similar to opening a savings account. Here are the steps:

• Consider the type of CD you want. Several kinds of CDs are available, such as traditional CDs, which offer a fixed interest rate; jumbo CDs, which typically require a hefty deposit; a bump-up CD, which lets you switch to a higher APY if the rate changes before the maturity date; and a no-penalty CD, which allows you to withdraw your cash early without paying fees. 
• Research the best rates. Use our list and look around at the banks you know to see the best yields on the market. 
• Ensure the institution is federally insured. Your deposits can be protected up to $250,000 per bank, per account ownership type, if the institution is insured. You can look on the organization’s website or use the FDIC’s BankFind tool or the NCUA’s Research a Credit Union tool to find out.
• Set up the account. Depending on the financial institution, you may be able to open a CD online, via a mobile app, in person or by phone. However you do it, you’ll need to supply personal information such as name, address, date of birth and Social Security number. Credit unions have an additional step; to become a member, you typically must be (or become) affiliated by joining a consumer group or donating to a charity. 
• Determine how often you’d like to receive interest payments. You may be able to get interest payments monthly, semiannually or annually. Or you could reinvest your interest payments.
• Put money into the CD. To fund the account, you must make an initial deposit through an online transfer, through an over-the-phone transfer, by check or with cash. Some financial institutions require a minimum dollar amount for the deposit, while others don’t.

While savers typically get CDs directly from banks or credit unions, brokerage firms and independent salespeople also offer CDs. Although you may be able to obtain a higher interest rate with “brokered CDs,” keep in mind that they don’t qualify for deposit insurance.

Are 2-year CD rates rising?

“In today’s higher interest rate environment, investing in CDs can be rewarding, especially in shorter durations like a two-year CD,” said Krisstin Petersmarck, investment advisor representative at Bridgeriver Advisors in Bloomfield Hills, Mich. 

For now, interest rates for two-year CDs remain high. In fact, they could climb even more.

CD yields tend to follow, albeit at a lag, the path set by the Federal Reserve; if the Fed increases rates, CD rates typically increase, too. Right now that increase is at the shorter end, typically between six months and two years, because market participants believe that longer-term economic growth could slow, thereby causing the Fed to eventually cut rates. 

Learn more: Read our 2023 CD rates forecast.

However, that’s still a ways off. The Fed is likely to raise interest rates throughout 2023 since unemployment remains low and inflation, especially when you strip out volatile food and energy prices (which is what the Fed takes most seriously), is much higher than desired. 

Therefore, expect rates to crater only when the economy appears to be in trouble. 

Using a 2-year CD in a CD ladder

A CD ladder lets you take advantage of several CDs with a variety of maturity dates in hopes of maximizing yields. The ladder might include a blend of short-term and long-term CDs with different APYs. When a CD reaches the maturity date, you can withdraw your money or roll it over into a new CD.

If you’re building a CD ladder, you need to figure out how much money to put into the CDs and how many CDs to use as rungs in the ladder.

Imagine you have $1,500 to put to use. In a laddering strategy you could put $500 in a one-year CD, $500 in a two-year CD and $500 in a three-year CD. 

When the one-year CD matures, you then purchase another three-year CD. This way, you have access to a third of your funds every year. 

The benefit of the strategy is that you are taking advantage of rising interest rates now. In the event that interest fall, at least you have exposure to longer-term CDs paying at a higher rate than you hypothetically would be able to find on the market. 

“With the ladder strategy, savers take advantage of rising interest rates without having their hard-earned money languishing in a checking account, earning no interest and even losing value over time,” McLaughlin said. 

Other CD terms to consider

 A “term” is the fixed amount of time you’ll earn a fixed interest rate on the money held in a CD. A two-year CD isn’t your only option, of course. You can choose from a wild variety of terms. Some popular CD terms you might consider include:

• Three months
• Six months
• One year
• Five years
• 10 years

Most short-term CDs range from three months to one year, while most long-term CDs are in the two-year to five-year bucket.

Among the factors to weigh when deciding on a CD term are:

• How long are you willing to lock up your money? Are you more comfortable keeping your money in a two-year CD rather than a five-year CD? You should maintain an emergency fund that you can access at any time without penalty, in addition to any CDs.
• What are your savings goals? When will you likely need the cash for a vacation or a down payment on a house or car? 
• What do your investments look like? Deposits can be considered an extremely conservative investment, one to balance out riskier stock market choices. How far out are you willing to plan and how long do you want to have such a safe (low-yield) asset?
• How do different terms fit into a CD ladder strategy? If you’re building a CD ladder, how often do you want some of your funds to be available? For example, if one-year increments are good, you could sandwich a two-year CD with a one-year and three-year deposit. 

The Office of the Comptroller of the Currency points out that once a CD matures, you might be given a grace period to decide whether to renew it, roll over the money to another CD or withdraw your money. Keep in mind that a financial institution isn’t necessarily obligated to keep paying interest on your CD after it matures.

Frequently asked questions (FAQs)