Best 2 Year CD Rates for July 2024

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Is it worth getting a 2-year CD? Depends on your goals and situation. Read on to find out if you should get one or not.

Top 2-year CD Rates:

Two years is quite a long time to lock up your funds. If you commit to the wrong CD, you could lose out on making more money.

What's even worse is the possibility of having to pay hefty early withdrawal penalties.

To avoid that grief, take your time when shopping for 2-year CDs and learn how you can maximize earnings.

Here are the best 2-year CD rates in the market to get you started.

What is a 2-Year CD?

A 2-year or 24-month certificate of deposit (CD) is a savings account with a fixed rate that requires you to tie up an amount of money for a fixed period. Typically, you earn a higher APY than with a regular savings account.

Since a 2-year CD has a relatively long term, banks tend to offer better rates for them. It is also quite common in the market, so you'll get many 2-year CD options to choose from. Then comes this question.

What is your primary goal for considering a 2-year CD?

How Much Interest Will a 2-Year CD Earn?

If you deposit $1,000 in a 2-year CD, you can earn $103 with a 5% APY. Here's a table showing how different rates and deposit amounts impact your earnings.


Here's a convenient CD calculator for you to see how much you can earn on a 2-year CD with other APY and amounts.

CD Calculator

Is a 2-Year CD Worth It?

Whether you should get a 2-year CD or not mostly depends on your financial goals and the time you need to achieve them.

For example, if you're building your emergency fund, a 2-year CD may not be the best option because you won't get easy access to your funds. And, you can end up with less money than you put in because of early withdrawal penalties.

Can I withdraw money from my 2-year CD?
Like other CDs, a 2-year CD typically incurs penalties for early withdrawal. The appeal of CDs lies in their high rates, which come in exchange for committing a fixed amount of money for a set term. However, if you will need an early withdrawal, no-penalty CDs can be a good choice to avoid charges.

How important is liquidity to you when investing your money?

2-year CDs are best for those with mid-term to long-term goals. Say you want to passively grow funds for a real estate purchase in two years, it might be a great fit term-wise.

For longer timelines, like saving up for your retirement fund, you can include a 2-year CD as part of a CD ladder in your IRA portfolio.

Can You Lose Money on a 2-Year CD?

In general, you will not lose money on 2-year CDs. CDs are federally insured by the FDIC or the NCUA for up to $250,000 so you're covered in case your bank or credit union closes down.

You might still lose some money if you withdraw your funds too early that your earnings can't cover the penalties. For 2-year CDs, the penalties can cost several months of interest which can eat into your principal if you close the CD way too soon.

Pros and Cons of a 2-Year CD

To guide you further on whether you should get a 2-year CD, here are its pros and cons.


  • Higher interest rates compared to savings accounts
    Since you're tying up your money for two years, you usually get fixed, competitive rates that are higher compared to that of regular savings accounts.

  • Low-risk and guaranteed returns
    2-year CDs are federally insured and the rate is fixed so your money and earnings are safe, guaranteed, and predictable.

  • Curb spending
    2-year CDs work great if you want to stow away your money and avoid using it. You can't withdraw your CD without paying penalties, so it discourages you from spending.


  • Limited liquidity during the term
    If you suddenly need to take out your money, 2-year CDs are not the best option because of the early withdrawal penalties. You may lose some or all of the interest your CD earned.

  • Missed opportunities for higher returns
    CD rates can change quite often, it typically moves with the Fed Funds rate. If you get a 2-year CD too soon or too late, you can miss out on better offers.

  • Inflation
    Since your 2-year CD rate is fixed, there is a chance that your earnings may not grow fast enough to match changes in the inflation rate.

Are 2-year CDs safe?
Yes because most financial institutions that offer 2-year CDs are insured up to $250,000 by the FDIC or NCUA. This means your deposits are covered in case your bank or credit union fails.

How to Find the Best 2-Year CD

If you've decided to get a 2-year CD, here are some things to ask before you commit to a specific offer.

What is the APY?
You should find the highest APY to maximize your interest earnings. 2-year CDs are pretty common so take time to check different institutions and compare their rates.

What is the minimum deposit requirement?
If you have a specific deposit amount in mind, make sure to look for a 2-year CD that fits your criteria or has no minimum requirement.

How much is the early withdrawal penalty?
A lot of things can happen within 2 years. To avoid paying high penalties, try to find a 2-year CD with low early withdrawal fees. You can also look for No-Penalty CDs, although these are quite rare.

Are there unique features?
A 2-year CD with convenient features, like bump-up or add-on features, can make your investment more worthwhile. Always make it a habit to ask for the fine print of your CD.

Alternatives to 2-Year CDs

2-year CDs may not be for you so, here are other investments you can consider:

High-Yield Savings Account
Liquidity is a big issue with 2-year CDs. If you want flexibility with your money, look for online high-yield savings accounts with competitive rates.

Compare Savings Account Offers

Money Market Accounts
Much like savings accounts, a money market account allows you to earn a good rate while giving you easy access to your funds. Some even come with a debit card, a checkwriting option, and ATM access. But rates are variable, unlike CDs.

Compare Money Market Account Offers

Treasury Securities
Consider Treasury bills, notes, and bonds if you want fixed rates for a period of two years. These government-backed securities can offer a safe and reliable investment option similar to CDs.

Blue Chip Stocks
If you don't mind a bit of risk, try investing in blue chips. Blue chip stocks are shares in established, renowned companies with a strong growth record and often pay good dividends. You can also easily pull out your investments for a fee.

CD Ladder with Short-Term CDs
These days, short-term CD rates can be better than long-term CD rates. If you want high interest earnings, a CD ladder with short-term CDs is a good option.

A CD ladder is a tactic used to address liquidity problems with CDs. The idea is to divide your money into multiple CDs with varying terms so that the CDs will mature in intervals.

Typically, you'd want a CD to mature every month so you get quicker access to your funds and the flexibility to choose between using or reinvesting them.

If you want to invest for 2 years, you'll have to set a ladder that stretches up to 2 years.

Consider Odd-Term CDs
Do you want higher rates? Some banks and credit unions offer promotional CDs with odd terms or non-standard terms. These are CDs with terms like 13-months, 11-months, 5-months, etc. and usually they come with good rates.

Watch out for these odd-term CDs! They are usually only offered for a limited time. Here are some odd-term CDs that you can consider.

Compare Odd-Term CD Rates:

2-Year CD FAQs

Where can I get a 2-year CD?
2-year CDs are often available at banks and credit unions. You can visit a nearby branch or their official website to see what CDs and rates are being offered. You can usually open an account either online or at a physical location as well.

When should I get a 2-year CD?
Generally, it's best to get a CD when interest rates are at their peak. CD rates usually move with the Fed Funds rate and the Treasury Yield. By monitoring these trends, you can determine the best time for you to invest in a 2-year CD.

Will 2-year CD rates go up?
Typically, CD rates follow the movement of the Fed Funds rate and the Treasury Yield. An increase may lead to higher CD rates but there's no guarantee that 2-year CD rates will go up or down.

What are the types of CDs?
Here's a list of different types of CDs available.

  • Term CDs are standard CDs with fixed rate for fixed term.
  • No-Penalty CDs allow you to withdraw money early without any withdrawal penalties.
  • Bump-Up CDs include an option to increase your rate during the CD term.
  • Add-on CDs includes an option to add more deposits to your CD balance.
  • Jumbo CDs are for large deposits of usually over $100,000.
  • IRA CDs offer tax advantages for retirement savings.

Bottom Line

Making a two-year commitment is a major decision, but if you're looking for passive income or to stow away your savings for a while, getting a 2-year CD might be a good choice.

If it fits well with your financial plans, then a 2-year CD may be worth your while. Otherwise, consider other savings accounts and investments.

Write to Rue Atanacio at Follow us on Twitter and Facebook for our latest posts.

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