Best 2-Year CD Rates of September 2024 (2024)

Although high interest rates mean you pay the bank more on the money you borrow, it also means you earn more on the money you save. According to the Federal Deposit Insurance Corporation (FDIC), the national average deposit rate for a 2-year CD is only 1.57%. However, many financial institutions’ best 2-year CD rates average 4.00% or higher. These high interest rates make a certificate of deposit (CD) a great choice to place an emergency fund you won’t need access to for a while, so you can reap the benefits while your money stays secure.

Comparing CDs at various banks and credit unions can help you find the best interest rates with low opening balance requirements and little to no fees. The list below shows our top choices for the best 2-year CD rates today.

10 Best 2-Year CD Rates of 2024

Best CD Without Monthly Fees

Sallie Mae CD

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Vault Verified

APY

4.50%

Min. Deposit Requirement

$2,500

Term Length

2 years

Early Withdrawal Penalty

180 days interest

Why We Chose It

Sallie Mae doesn’t charge monthly fees on its CDs and has multiple terms to choose from. Its 2-year CD earns a 4.50% APY with a $2,500 minimum deposit and balance requirement.

Pros

• FDIC-insured
• Interest accrues daily
• Easy to open online

Cons

• Highest available interest rate (5.25%) is for a 12- or 13-month CD
• 6-month interest early withdrawal penalty
• $2,500 minimum opening balance

Best CD for Early Withdrawal

Digital Federal Credit Union Certificates

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Vault Verified

APY

4.24%

Min. Deposit Requirement

$500

Term Length

2 years

Early Withdrawal Penalty

90 days interest

Why We Chose It

Digital Federal Credit Union offers three 2-year CD options. Its QuickStart Certificate earns 4.24% APY and only requires $100 to open the account for members who are 23 and younger. The Regular Certificate earns 4.24% APY with $500 to start, while the Jumbo Certificate earns 4.50% APY but requires $25,000 to open. But what sets Digital FCU CDs apart is the 3-month early withdrawal penalty, the lowest on our list of lenders.

Pros

• Low early withdrawal penalty
• Low opening balance requirement
• High APY for all CD terms

Cons

• Requires credit union membership
• Only co-op shared branches outside Massachusetts and New Hampshire
• Certificates renew automatically

See Also

Boost your earnings with the best 2-year CD rates11 best CD rates of October 2024: Up to 5.10% APYBest 2-Year CD Rates for October 2024: Secure Returns for Your SavingsBest 2-Year CD Rates Of September 2024

Best 10-Day Rate Guarantee CD

Marcus by Goldman Sachs High-Yield CD

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Vault Verified

APY

4.40%

Min. Deposit Requirement

$500

Term Length

2 years

Early Withdrawal Penalty

180 days interest

Why We Chose It

The Marcus by Goldman Sachs High-Yield CD earns a 2-year CD rate of 4.40% APY. It only requires $500 to start, and you can open the account only in a few minutes. Marcus also has a 10-day CD rate guarantee, which guarantees you earn the highest APY on the CD term length and product you select if you fund the account within 10 days of opening it.

Pros

• Multiple CD options and terms available
• Highly competitive interest rates
• 10-day CD rate guarantee

Cons

• 180-day interest penalty on early withdrawals
• No physical locations
• Must have external bank account to fund

Best No Minimum Balance CD

BMO Alto Online CD

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Vault Verified

APY

4.75%

Min. Deposit Requirement

$0

Term Length

2 years

Early Withdrawal Penalty

180 days interest

Why We Chose It

A BMO Alto CD doesn’t require any money to open the account, but you must fund it within 10 days or it will close automatically. Interest compounds daily, and there are six CD terms to choose from.

Pros

• Easy to open online
• No minimum balance or deposit requirement
• Multiple term options with competitive interest rates

Cons

• Must fund within 10 days or will automatically close
• Early withdrawal penalty of 180 days interest
• No mobile app or in-branch support

Best CD for Large Initial Deposit

Popular Direct

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Vault Verified

APY

4.80%

Min. Deposit Requirement

$10,000

Term Length

2 years

Early Withdrawal Penalty

270 days simple interest

Why We Chose It

If you have at least $10,000 to fund your CD, consider a Popular Direct CD. It earns a 4.80% APY with a minimum deposit of $10,000. Interest compounds daily, and you can track your earnings online or through the Popular Direct mobile app.

Pros

• Customer support available seven days a week
• Manage your account 24/7 online or through the app

See Also

Best 2-Year CD Rates for September 2024

Cons

• Early withdrawal penalty of about 9 months interest
• CDs renew automatically
• No physical branches

Best CD Renewal Rates

Bread Savings CD

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Vault Verified

APY

4.75%

Min. Deposit Requirement

$1,500

Term Length

2 years

Early Withdrawal Penalty

180 days interest

Why We Chose It

Many CDs automatically renew, but it’s rare to see an even better interest rate when it renews. A Bread Savings 2-year CD requires a $1,500 minimum deposit and earns a 4.75% APY. If you allow it to automatically renew, you’ll lock in a 4.80% for two years.

Pros

• Higher CD renewal rate than initial interest rate
• Accounts are FDIC insured
• Interest compounds daily

Cons

• $1,500 opening deposit minimum requirement
• 6-month early withdrawal penalty
• Renewal rates only available for same-term CD

Best Bump Rate CD Option

United States Senate Federal Credit Union

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Vault Verified

APY

5.18%

Min. Deposit Requirement

$1,000

Term Length

2 years

Early Withdrawal Penalty

120 days of dividends paid

Why We Chose It

Although the US Senate Federal Credit Union requires a membership to open an account, it’s only $1 for a lifetime membership. Once you’re an active member, you can choose from a wide range of savings accounts, including share certificates—the credit union version of a CD. The Bump Rate Share Certificate allows you to secure a competitive APY and bump up the rate once during the 2-year term to earn even higher interest for the remaining months.

Pros

• Multiple CD types and terms available
• Only $1 required for lifetime membership
• Accounts are NCUA insured

Cons

• 120 days of accrued dividends for early withdrawals
• Inactive and closed account fees
• Share certificates renew automatically

Best for IRA CDs

Alliant Credit Union

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Vault Verified

APY

4.45%

Min. Deposit Requirement

$1,000

Term Length

2 years

Early Withdrawal Penalty

Up to 180 days

Why We Chose It

There are multiple ways to qualify for membership with Alliant Credit Union, but the easiest is to become a digital inclusion advocate for the Alliant Credit Union Foundation. Alliant Credit Union will make a one-time $5 donation for you. Once you’re a member, you can open a regular CD or an IRA Certificate with a Traditional, Roth or SEP IRA. The IRA CDs allow you to earn a competitive interest rate that isn’t dependent on volatile stock market returns.

Pros

• Multiple IRA CD options and terms available
• No maximum balance
• Jumbo CDs are available

Cons

• Dividends compounded monthly
• Requires credit union membership
• No change options once CD is opened

Best High Interest Rate CD

TAB Bank

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Vault Verified

APY

5.00%

Min. Deposit Requirement

$1,000

Term Length

2 years

Early Withdrawal Penalty

180 days interest

Why We Chose It

Of all the banks we reviewed offering a 2-year CD, TAB Bank has one of the highest annual percentage yields of 5.00%. TAB’s 2-year CD has a $1,000 minimum opening deposit requirement. Traditional and Roth and Coverdell IRA CDs are also available.

Pros

• Highly competitive interest rate
• 8 CD lengths to choose from
• Can open CD account online

Cons

• $1,000 opening deposit
• 6-month early withdrawal penalty
• No brick-and-mortar locations

Best CD Laddering Option

Barclays Online CDs

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Vault Verified

APY

4.40%

Min. Deposit Requirement

$0

Term Length

2 years

Early Withdrawal Penalty

90 days simple interest

Why We Chose It

If you want to maximize your interest earnings using the CD ladder strategy, consider Barclays Bank. This online-only bank offers six CD options that earn highly competitive interest rates, including 4.40% APY on a 2-year CD, 4.80% APY on an 18-month CD and 5.30% APY on a 12-month CD. This strategy allows you to withdraw your funds every six months once the first-year CD matures to either roll over into a higher-earning CD or allow it to automatically renew to continue growing your investment. Barclays doesn’t have an opening balance requirement or monthly maintenance fees, and interest compounds daily.

Pros

• 14-day grace period at maturity to withdraw
• Allows 14 days to fund account after application approval
• Open account easily online

Cons

• No 6-month CD option available
• 90-day early withdrawal penalty
• No physical branches

2-year Certificate of Deposit Overview

A certificate of deposit (CD) is an alternative type of savings account offering a guaranteed interest rate for a set amount of time. CDs have advantages and drawbacks compared to savings accounts, so it’s essential to understand how CDs work to know which savings vehicle is best for you.

What Is a 2-year CD?

Online banks, credit unions, and traditional banks typically offer a range of certificate of deposit (CDs) term lengths, with a 2-year CD being a standard option. A 2-year CD is a CD that has a 2-year term. Once you open and fund the CD account, you agree to allow the bank to hold onto your money for two years. In exchange for holding onto your money for that long, the bank agrees to pay you a fixed interest rate that usually compounds daily and is credited to your account monthly, though some only compound monthly.

This differs from a high-yield savings or money market account, where you can access your money anytime. A high-yield savings account may offer a similar interest rate, but the rate is variable and can change anytime. There might also be fees associated with the account, like a monthly maintenance fee. A money market account also has a variable interest rate, but it functions like a checking and savings account in one, allowing you to write checks from the account and have ATM access. However, money markets usually require a large initial deposit.

How Do 2-year CDs Work?

When you open a 2-year CD, the amount you deposit gets locked into the account for a period of two years. You usually can’t make any deposits after the two-year clock starts. Some banks allow you to remove some of the interest during the two years, but if you do, it reduces your earned interest.

If you remove any of the principal during the two years, you are subject to an early withdrawal penalty. Banks will charge anywhere from 90 days to a year’s interest. CDs with many banks often renew automatically, allowing you a 10- to 14-day grace period to withdraw your money before it automatically renews at the bank’s current 2-year interest rates.

Who Should Get a 2-year CD?

The ideal customer for a 2-year CD is someone who wants a low-risk savings option but also won’t need the funds for two years. Taking an early withdrawal will reduce earned interest significantly, making the investment not worthwhile for many. Interest rates are comparable to a high-yield savings account, with the added benefit of fixed interest instead of variable. If you think you may need the money early, a high-interest, high-yield savings account may be a better option.

Pros and Cons of 2-year CDs

While CDs can be a great fit in many circumstances, they’re not the right solution for everyone. Consider the pros and cons of opening a 2-year CD to know if this savings account is the right choice for you.

Pros of 2-year CDs

• Fixed interest rates. Having a fixed interest rate makes it easy to calculate exactly how much interest you’ll earn on a 2-year CD.
• Insured savings products. CDs are typically FCID-insured or NCUA-insured, if banking with a credit union, providing up to $250,000 in insurance per deposit, account type and ownership category if the bank fails.
• Limits the urge to spend. A 2-year CD can help reduce the urge to spend since the money is locked away and you’ll incur an early withdrawal penalty to liquidate it.

Cons of 2-year CDs

• The longer the term, the lower the interest rate. Many financial institutions offer the best interest rates on small-term CDs, so you might earn more interest funding a 1-year CD than a 2-year CD.
• Some banks have high balance requirements. The best CD rates may come with high opening balance requirements.
• 2-year CDs rarely come with promotional rates. Banks sometimes offer a high promotional interest rate, but they are typically for CD terms of less than two years.

What to Consider When Choosing a 2-Year CD

Not all 2-year CDs are the same. Knowing what to consider when choosing a 2-year CD can help you narrow down the best CD to fit your financial goals. Here are five factors to look at when comparing 2-year CDs.

Minimum Opening Balance Requirement

The minimum opening deposit is the lowest amount you can put into the 2-year CD. Many banks offer a $500 minimum balance, while others may require $1,000 or more. Even if a bank advertises no minimum balance, make sure to read the fine print—you must fund the account within 14 days or less, or the bank will automatically close the CD account.

CD Types

There are several types of CDs to choose from, including:

• Traditional and high-yield CDs: These CDs typically range in term from a month to five years and have a fixed interest rate. However, high-yield CDs typically offer higher interest rates than traditional CDs.
• Jumbo CDs: A jumbo CD offers similar terms to traditional and high-yield CDs but requires a much larger deposit—usually $100,000 or more. Interest rates are competitive but may be on par with high-yield CDs.
• No-penalty CD: A no-penalty CD doesn’t have an early withdrawal penalty and usually comes with a term of a year or less.
• Bump rate CDs: A bump-up CD provides the option to increase the interest rate once during the CD term if the bank’s standard interest rate for the same-term CD increases. For example, if you have a 4.50% APY 2-year bump rate CD and the interest rate rises to 5.00% in the 13th month of the 2-year term, you can “bump up” the interest rate to 5.00% for the remaining 11 months.
• IRA CDs: An IRA CD is a tax-advantaged account that allows you to grow your retirement nest egg at a fixed interest rate, though it may not earn as high of returns as an IRA invested in the stock market.

Interest Rates

The CD’s annual percentage yield (APY) is the amount of interest you’ll earn on your initial investment over the life of the CD term. You might find that online banks offer more competitive interest rates than brick-and-mortar banks. Credit unions may also have comparably competitive interest rates on share certificates, which is their equivalent to a CD.

Early Withdrawal Penalties

An early withdrawal penalty applies if you remove any of the principal balance during the 2-year term. While some banks may only charge three months of interest, others charge up to a year or more for early withdrawals. A penalty doesn’t apply to interest-only withdrawals on eligible CDs; you’ll just earn less interest because you won’t have as much money earning interest.

Renewal Grace Period

Most CDs renew automatically, but you have a grace period between the CD maturity date and when the new 2-year term begins to remove your initial balance plus interest without penalty. The grace period is usually between 10 and 14 days.