The best 2-year CD rates for July 2021

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The best 2-year CD rates of July 2021

	APY	Minimum deposit	Next steps
	0.55%	$0	Ally Ally Raise Your Rate CD
	0.80%	$1,000	Delta Community Credit Union Delta Community Credit Union Certificate of Deposit
	0.55% to 0.60%	$1,000	Navy Federal Credit Union Navy Federal Credit Union Standard Certificate
	0.70%	$1,000	First Internet Bank of Indiana First Internet Bank of Indiana Certificate of Deposit
	0.65% to 0.70%	$500	Golden 1 Credit Union Golden 1 Credit Union Certificate of Deposit
	0.75%	$1,500	Comenity Direct Comenity Direct Certificate of Deposit
	0.70%	$1,000	First National Bank of America First National Bank of America Certificate of Deposit
	0.71%	$5,000	Connexus Credit Union Connexus Credit Union Share Certificate

*As of July 2021, the national average APY on a 2-year CD is 0.17%, according to the FDIC.

2-year CD rates at the largest US banks

Bank	APY	Next steps
Citibank	0.10%	Citibank Citibank Fixed Rate Certificates of Deposit (CDs)
Capital One	0.25%	Capital One Capital One 360 CDs®
PNC Bank	0.01% to 0.03%	PNC Bank PNC Fixed Rate Certificate of Deposit
TD Bank	0.05%	TD Bank TD Bank Choice Promotional Certificate of Deposit
Bank of America	0.03%	Bank of America Bank of America Standard Term Certificate of Deposit
Chase Bank	0.01% to 0.05%	Chase Chase Certificate of Deposit (CD)
US Bank	0.05%	US Bank US Bank Certificate of Deposit
Charles Schwab Bank	0.25%	Charles Schwab Bank Charles Schwab Bank Certificate of Deposit
BB&T Bank	0.01%	BB&T Bank BB&T Personal Certificate of Deposit

If you want to grow your money but keep it safe from the turbulence of the stock market, a certificate of deposit (CD) may be a good option.

Right now, the best 2-year CD rates are at least 0.60%. You can snag a higher APY with longer CD terms, but 2-year CDs have their perks.

You'll likely earn a higher APY on a 2-year CD than with a 1-year CD, and you won't have to part with your money for as long as you would with a longer term. Two-year terms provide a nice balance of a good rate and a relatively short length of time.

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Learn more about our top picks

Ally Raise Your Rate CD

Why it stands out: A Raise Your Rate CD allows you to increase your APY once during a 2-year term should Ally's rates go up. Ally doesn't require a minimum deposit, and it charges low early withdrawal penalties.

2-year CD early withdrawal penalty: 60 days interest

What to look out for: Other types of CDs. The Raise Your Rate CD is the only Ally CD with a 2-year term. But Ally also offers regular term CDs and no-penalty CDs, so consider whether you'd prefer one of those types rather than a Raise Your Rate CD.

Delta Community Credit Union Certificate of Deposit

Why it stands out: Delta Community Credit Union pays competitive rates, and if you need to withdraw funds before your CD matures, its penalties are lower than what most institutions charge.

2-year CD early withdrawal penalty: 180 days interest

What to look out for: Membership and compounded interest. Membership is available for residents of several Georgia counties, as well as for employees of numerous companies, members of specific associations, and family members of current Delta Community members. As with many credit unions, your interest is compounded monthly rather than daily, which will limit how much wealth you build. Depending on your balance, this may or may not make a significant difference.

Navy Federal Credit Union Standard Certificate

Why it stands out: Navy Federal Credit Union pays higher rates for higher balances, but its APY is competitive regardless. Navy Federal compounds your interest daily like most banks would, unlike many credit unions that compound monthly.

2-year CD early withdrawal penalty: 180 days interest

What to look out for: Membership and tiered APY system. You or a family member must have ties to the military for you to become a member of Navy Federal. Also, keep in mind that you won't earn the highest APY unless your balance is at least $100,000.

First Internet Bank of Indiana Certificate of Deposit

Why it stands out: First Internet Bank of Indiana pays a good rate for 2-year CDs, and contrary to what the bank's name may lead you to believe, this online bank is available to residents of all US states.

2-year CD early withdrawal penalty: 365 days interest

What to look out for: Monthly compounded interest and early withdrawal penalty. First Internet Bank of Indiana compounds your interest monthly, not daily, so you'll earn less in the long run. Depending on how much money is in your CD, this may or may not make a significant difference. You can also find a bank that charges less for an early withdrawal from a 2-year CD.

Golden 1 Credit Union CD

Why it stands out: Golden 1 Credit Union pays high rates, even on its lower balance tier. You'll only need $500 to open a CD.

2-year CD early withdrawal penalty: 365 days interest

What to look out for: Membership, compound interest, and tiers. Anyone who lives or works in California can become a member of Golden 1 Credit Union, and people who work for certain companies can qualify. Golden 1 compounds your interest monthly instead of daily, and you can't earn the highest APY unless you have at least $100,000 in your CD.

First National Bank of America Certificate of Deposit

Why it stands out: First National Bank of America's main strength is its high APYs.

2-year CD early withdrawal penalty: 360 days interest

What to look out for: High early withdrawal penalty. Some of our other top picks charge less to take out funds before your CD matures.

Comenity Direct Certificate of Deposit

Why it stands out: Comenity Direct pays high rates on CDs and charges reasonable early withdrawal penalties.

2-year CD early withdrawal penalty: 180 days simple interest

What to look out for: Minimum deposit. Comenity Direct requires at least $1,500 to open a CD.

Connexus Credit Union Share Certificate

Why it stands out: Connexus pays a good rate on its 2-year CDs, and it's easier to become a Connexus member than it is to join many credit unions.

2-year CD early withdrawal penalty: 180 days interest

What to look out for: Opening deposit and quarterly compounded interest. You'll need at least $5,000 to open a CD with Connexus, and it compounds your interest quarterly – not daily, or even monthly. This will affect how much wealth you'll build over the term.

Other 2-year CDs we considered

We looked at the following 2-year CDs as well, but all of them currently have lower rates than our winners:

• American Express CDs
• Synchrony Bank CD
• NBKC CD
• Discover CD
• CIT Bank CD
• BrioDirect High-Yield CD
• TIAA Basic CD
• Sallie Mae CD
• Signature Federal Credit Union Certificate

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Frequently asked questions

Why trust our recommendations?

Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that "best" is often subjective, so in addition to highlighting the clear benefits of a financial product or account – a high APY, for example – we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.

What is a CD?

A CD, or certificate of deposit, is a time-sensitive savings account that usually holds your money at a fixed interest rate for a specified period of time. If you don't need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed APY for the term of the CD.

With most banks, you typically won't be able to deposit more money or access your funds before the CD matures without paying a penalty.

You will, however, earn interest on the amount and have the option to collect those payments monthly or reinvest them into your CD. Most banks offer varying rates for different terms and deposit amounts – in many cases, the longer the term, the higher the rate.

At the CD's maturity date, you'll typically have a 10- to 14-day grace period in which you can withdraw your money and close the account or renew the term.

What is a 2-year CD?

With a 2-year CD, you stash away your money for 24 months and typically earn a fixed rate. You have the option to renew your CD at the end of the 2-year period, or close the account and pocket the money.

How do CD rates work?

Most CDs lock in your rate for the entire term. For example, if you open a 2-year CD at a 0.60% APY, you'll earn 0.60% for the entire period. If you renew your CD after it matures, you'll earn the new rate available in two years.

There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.

What is the best CD term length?

Most banks offer CD terms up to five years. Your choice will likely depend on how soon you plan to need the money and which term pays the highest rate. For the most part, longer terms pay higher rates – but that isn't always the case.

Also, going for a shorter term gives you the opportunity to snag a better APY if rates are up in a year. With a 3-year or 5-year CD, you could miss out on higher rates. But on the other hand, you could avoid lower rates with a 3-year or 5-year term if rates drop later.

Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths so you can take advantage of higher rates with longer terms, but also access some of your money earlier. For instance, you might open 1-year, 2-year, and 4-year CDs at the same time, which means you'll get some of your money back in one year, then more in two years, then more in four years.

See Insider's picks for the best CD rates »

Which is better, a 2-year CD or a high-yield savings account?

The choice between a 2-year CD and high-yield savings account will depend on several factors.

First, a bank typically pays a higher rate for a 2-year CD than for a high-yield savings account. However, that's not always the case, and the rates can be pretty close.

But a 2-year CD locks in your rate for the entire term. If rates are dropping, this could make the CD a better choice, because your savings account APY could decrease throughout the two-year period. If rates are rising, the savings account might be a better fit, because your rate could go up.

It also depends on when you'll need to access your money. You should be able to access funds from your savings account regularly – but if you need access to money from your 2-year CD before it matures, then you'll have to pay a fee.

You can also continuously add money to your savings account, whereas most CDs block you from making additional deposits after opening the account.

See Insider's picks for the best high-yield savings accounts »

Which is better, a 2-year CD or a money market account?

Like with a high-yield savings account, you may prefer a money market account over a CD if you want quick access to your money. Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping.

Many banks require higher deposits for money market accounts than CDs, which could affect your decision. It's also good to remember that you can add more funds to your money market account over time, while a CD typically only allows an opening deposit.

See Insider's picks for the best money market accounts »

Which is better, a 2-year CD or another investment account?

CDs aren't generally considered investments the same way something like an index fund, which puts your money into the stock market, is. Instead, a CD is typically viewed as a type of savings account, and your potential for losses and gains – your risk – is much more limited. Because the stock market is risky, experts generally don't advise investing money you'll need in the next five years. In the case of a stock market drop, you wouldn't have time to make up your losses.

If you need to access your money in a year and want a guaranteed rate of return, a 2-year CD is a better choice than a different type of investment account.

If you're comfortable parting with your money for longer and want to take more risk with your money, then you may want to invest in the stock market. One way to do this is through tax-advantaged retirement accounts, like a 401(k) or IRA, which grows your money over decades. Another is through brokerage accounts, which are useful tools to build long-term wealth, but can't guarantee a given return like a CD can.

There is such a thing as an IRA CD, which is sort of a combo savings/investment account. It's a safe investment tool that may be a worthwhile option for people who are close to retirement age.

Related Content Module: More on Certificates of Deposit