Best 2-Year CD Rates for December 2024: Up to 4.40%

Frequently Asked Questions

• What Is a 2-Year CD?

  A 2-year certificate of deposit (CD) allow savers to earn a higher interest rate by agreeing to keep their funds in a special bank account for an agreed upon time period, typically between 21 and 29 months. This means just one deposit is made at the outset, and no withdrawals are made until the CD matures.

  If needed, you can withdraw your money early, but it will cost you an early withdrawal penalty. In theory, financial institutions are willing to pay a higher interest rate on longer-term CDs because they can count on the money for a longer period. However, sometimes shorter-term CDs pay a better rate than longer ones, such as when banks and credit unions expect interest rates to drop in the future.

• Am I a Good Candidate for a 2-Year CD?

  If you have money you do not need for at least 21 months, then a 2-year CD could be the right fit for you. Two-year CDs are not short or long-term CDs (as with 6-month or 5-year CDs). While shorter CDs are great when you think you might need the money within a year, and long terms like five years are a good way to lock in a high interest rate when it seems interest rates will be declining, 2-year certificates represent a balance between duration and accessibility.

  If you're saving for a large purchase like a house, car, or boat—or maybe even a big trip—or will be making tuition payments for your child in the next couple of years, 2-year CDs are a good choice. They include a safeguard against you accessing the funds willy-nilly while not keeping your funds locked up for too many years.

  Two-year CDs may also be appealing when the future of interest rates is uncertain. Interest rates are impossible to predict, but sometimes their direction is widely expected. When the rate environment is very uncertain, however, 2-year CDs strike a balance between knowing you'll have a good rate for the foreseeable future and getting access to your funds thereafter if rates go up or you need your money for something else.

  Lastly, many CD ladders involve a 2-year CD. CD laddering is a strategy that enables savers to capitalize on the higher rates offered by long-term certificates but with access to some of your funds sooner (often, once every year). To complete a 5-year CD ladder, you will need at least one 2-year certificate.

• What Is the Difference Between CDs From Traditional Banks, Online Banks, and Credit Unions?

  There is no real difference between CDs that are offered by traditional banks, online banks, or credit unions. The CDs themselves will all act the same way—you deposit your money, agree to the term, and can't withdraw it without a penalty until the term is up. You'll want to compare CDs from all three types of institutions so that you can find one that pays the best interest rate for your money.

  One difference between these institutions comes from the way you can open the CD. Online banks may require you to wire transfer the money from your checking account to their online CD account, whereas a traditional bank or credit union may allow you to visit a branch and open the CD in person.

  For online banks, their low overhead expenses—they don't need to operate, staff, and maintain physical branches—allow them to pay higher deposit rates to attract customers. So long as you ensure that the bank is FDIC-insured (or the credit union is NCUA-insured), your protection as a consumer will be the same. Though a bank may operate only online, carrying the FDIC logo indicates it meets all the same regulatory standards as a physical bank.

  As for credit unions, it's good to be open-minded to these as well, as their rates are often among the top-ranking in any CD term, and especially long terms. The one caveat with opening a credit union CD is that you must first become a member of the credit union. This is generally easy and fast. But it may sometimes involve making a donation to an affiliated nonprofit.

• Why Are Odd-Term CDs Important to Consider?

  When a bank or credit union has a special certificate they want to offer for a limited time, they will often release it as an odd-term product. What "odd-term" refers to is a duration that differs from the conventional terms, such as 1-year, 2-year, 3-year, etc. Instead, you might see an 11-month CD or even a 29-month CD, for instance. All that's happening here is the institution is trying to differentiate this CD from its regular menu of standard CDs, both as a marketing tool to make the CD stand out and perhaps also as an internal signal to its staff that this is a limited-time CD.

  It's wise to pay just as much attention to odd-term CDs as conventional ones because these promotional certificates often offer much higher interest rates. That's also what helps them stand out and draw customers.

• What If I Need to Withdraw My Money Early?

  Even when you make the most careful financial plans, you can run into something unexpected that challenges your budget and savings goals. While it's true that CDs involve a lock of sorts, prohibiting you from simply withdrawing the funds at will, every CD institution offers an option to access your funds prematurely. This is called an early withdrawal penalty.

  Essentially, the penalty is the price you can opt to pay the bank in exchange for cashing in your CD early. While some banks allow you to take out just some of your funds, others require you to remove them all and close the CD.

  In either case, the bank or credit unions should spell out how the early withdrawal penalties are calculated. The most common method is to deduct a certain number of months' of interest from your balance before the remaining funds are paid to you. Typically, the longer the original CD term, the more months of interest you'll pay as a penalty.

  But buyer beware: Penalty policies vary quite widely, with some even allowing for the penalty to eat into your principal. Even with the best intentions to keep a CD fully funded for the entire term, it's smart to investigate the early withdrawal penalty in advance of committing to any CD, and then only choosing a certificate with a potential penalty you can stomach.

• Is a Jumbo 2-Year CD Worth It?

  Before opening a jumbo CD, compare the interest rate with that of a regular 2-year CD. Traditional or regular CDs often pay higher rates and require lower minimum deposits. So even if you have a jumbo amount, like $50,000 or $100,000, you may be able to deposit that money in a regular 2-year CD with a higher interest rate, making the jumbo CD not worth it. Compare rates first before deciding which CD is right for you.

• Financial Institutions We Review

  1st Source Bank, 5star Bank, ableBanking, Abound Credit Union, Achieva Credit Union, Affinity Federal Credit Union, Affinity Plus Federal Credit Union, Air Force Federal Credit Union, Alabama Credit Union, Allegacy Federal Credit Union, Alliant Credit Union, Ally Bank, Amerant Bank, American 1 Credit Union, American Express, American Heritage Credit Union, Andrews Federal Credit Union, Apple Federal Credit Union, Banco do Brasil Americas, Banesco USA, Bank of Baroda, Bank5 Connect, Bank7, Texas Capital Bank, bankESB (Easthampton Savings Bank), BankUnitedDirect, Barclays, BBVA Bank, Bellco Credit Union, Blue Federal Credit Union, BMO, BMO Alto, BrioDirect, Cadets Federal Credit Union, California Coast Credit Union, Capital One, Capitol Federal Savings Bank, CD Bank, CFG Bank, Chase Bank, Chevron Federal Credit Union, CIBC (Agility Banking), CIT Bank, Citibank, Citizens Access, Citizens Trust Bank, Colorado Federal Savings Bank, Bread Savings, Communitywide Federal Credit Union, ConnectOne Bank, Connexus Credit Union, Consumers Credit Union, Corporate America Federal Credit Union (CAFCU), Credit Union of Denver, Credit Union of the Rockies, Digital, Federal Credit Union, Discover Bank, DollarSavingsDirect, Dover Federal Credit Union, Dow Credit Union, Evergreen Bank Group, RocklandTrust Bank, Elements Financial, EmigrantDirect.com, Liberty Federal Credit Union, Fidelity Investments, Financial Partners Credit Union, Financial Resources Federal Credit Union, First Financial Credit Union, First Financial Northwest Bank, First Internet Bank, First National Bank of America, First Technology Federal Credit Union, Fort Bragg Federal Credit Union, Garden Savings Federal Credit Union, Georgia Banking Company, Georgia's Own Credit Union, GreenState Credit Union, Greenwood Credit Union, Grow Financial Federal Credit Union, GTE Financial, Gulf Coast Bank & Trust Company, Hanscom Federal Credit Union, Heritage Bank, Hiway Federal Credit Union, Home Loan Investment Bank, Home Savings Bank, Hope Credit Union, HSBC Direct, Hughes Federal Credit Union, Hyperion Bank, Ideal Credit Union, iGObanking, Interior Federal Credit Union, Justice Federal Credit Union, Kinecta Federal Credit Union, KS State Bank, La Capitol Federal Credit Union, Lafayette Federal Credit Union, Lake Michigan Credit Union, Langley Federal Credit Union, Latino Community Credit Union, Limelight Bank, Live Oak Bank, Luther Burbank Savings, MYSB Direct, MAC Federal Credit Union, Main Street Bank, MainStreet Bank, MapleMark Bank, Marcus by Goldman Sachs, Market USA Federal Credit Union, Matadors Community Credit Union, MECU Credit Union, Merrick Bank, Michigan State University Federal Credit Union, Mills42 Federal Credit Union, Mountain America Credit Union, MTC Federal Credit Union, MutualOne Bank, My Banking Direct, My eBanc, My Savings Direct, NASA Federal Credit Union, Nationwide by Axos Bank, Navy Federal Credit Union, nbkc, NexBank, North Country Savings Bank, Northern Bank Direct, Northfield Bank, Northpointe Bank, Nuvision Federal Credit Union, Oklahoma Central Credit Union, One American Bank, OneUnited Bank, Pacific National Bank, Paramount Bank, PARDA Federal Credit Union, Partner Colorado Credit Union, Patelco Credit Union, Pen Air Federal Credit Union, PenFed Credit Union, People's Credit Union, First Service Credit Union, Pinnacle Federal Credit Union, Popular Direct, Premier America Credit Union, Presidential Bank, FSB, Prime Alliance Bank, PSECU (Pennsylvania State Employees Credit Union), Quontic Bank, Quorum Federal Credit Union, Rising Bank, Merrimack Valley Credit Union, Salal Credit Union, Sallie Mae Bank, Santa Clara County Federal Credit Union, Signature Federal Credit Union, Spectrum Credit Union, SRP Federal Credit Union, State Bank of India Chicago, State Bank of India New York, State Bank of Texas, State Department Federal Credit Union, Summit Credit Union, Sun East Federal Credit Union, Superior Choice Credit Union, Synchrony Bank, TAB Bank, Teachers Federal Credit Union, Technology Credit Union, The Federal Savings Bank, Third Federal Savings & Loan, EverBank, TotalBank, Transportation Federal Credit Union, TruStone Financial Credit Union, UNIFY Financial Credit Union, Expedition Credit Union, United States Senate Federal Credit Union, United Texas Bank, University Federal Credit Union, US Bank, USAlliance Financial, USPS Federal Credit Union, Velocity Credit Union, VeraBank, Vio Bank, Virtual Bank, WebBank, Webster Bank, Wells Fargo, Western Vista Credit Union, Wings Financial Credit Union, XCEL Federal Credit Union, BankPurely, Umbrella Bank, giantbank.com, CapEd Credit Union, Zeal Credit Union, Finworth, Coastal1 Credit Union, Service Credit Union, National Cooperative Bank, Premier Members Credit Union, Bank of America, Flagstar Bank, 1st MidAmerica Credit Union, INOVA Federal Credit Union, Genisys Credit Union, Ivy Bank, Heartland Credit Union, Luana Savings Bank, Spectra Credit Union, Workers Credit Union, Credit Human, EFCU Financial, Poppy Bank, Credit One Bank, Vibrant Credit Union, CFBank, Department of Commerce Federal Credit Union, Seattle Bank, Crescent Bank, Pima Federal Credit Union, Cross River Bank, USAA, Great River Federal Credit Union, Brilliant Bank, Merchants Bank of Indiana, LendingClub, Chartway Credit Union, First Central Savings Bank, AgFed Credit Union, North American Savings Bank, Pelican State Credit Union, First Community Credit Union, Bask Bank, Skyla Credit Union, SkyOne Federal Credit Union, 3Rivers Federal Credit Union, Utah First Credit Union, Pasadena Federal Credit Union, Magnifi Financial, AloStar, Primis Bank, Farmers Insurance Federal Credit Union, Tampa Bay Federal Credit Union, Veridian Credit Union, Republic Bank, Salem Five Direct, All In Credit Union, Bethpage Federal Credit Union, Self-Help Federal Credit Union, Forbright Bank, Jovia Financial Credit Union, Sun Canyon Bank, Fortera Credit Union, Partners 1st Federal Credit Union, SouthEast Bank, American Bank, Newtek Bank, CBC Federal Credit Union, Vanguard, All America Bank, Amalgamated Bank, Citizens State Bank, AmBoy Direct, Republic Bank of Chicago, Oklahoma Community Credit Union, BluPeak Credit Union, Valley Direct, Bayer Heritage Federal Credit Union, First Harvest Credit Union, Orion Federal Credit Union, Wellby Financial, FedChoice Federal Credit Union, CoVantage Credit Union, Choice First Bank, Sandia Area Federal Credit Union, OMB Bank, Minnequa Works Credit Union, Securityplus Federal Credit Union, Bank of South Texas, T Bank