2 year CD Rates


2 Year CD Rates

A 2 year CD is a deposit that accrues interest annually, but requires that you keep your money locked up for a total of 24 months. The APY that you will receive is a yield that is garnered annually for the length of 2 years. 2 years is considered a medium length maturity since standard deposits range from 3 months to 5 years.

Generally speaking, all deposits are pretty much identical other than their maturity date. However, timing and the examination of other economic variables should be considered when deciding which deposit to lock in.

No matter the term, with a CD your money will accrue interest annually. It is important to note that some CDs are compounded daily while others are compounded monthly. This is a detail to consider as you search for the perfect investment.

The APY that you receive is a yield that is garnered annually for the length of 2 years. A 2 year CD is a medium length maturity. It is neither regarded as a short term deposit nor a long term one.

When a 2 year Certificate of Deposit Makes Sense

As noted above, a 2 year CD is not considered a short term or a long term investment. If you are looking for a “medium length” product with no risk, this is a great place to start.

The best time to invest in a 2 year CD is if the FED had made it clear that interest rates will not likely change over the next 24 months. In this case, you can lock in a 24 month CD to ensure that you receive the highest possible rate until the market as a whole begins to improve.

Is the interest rate market in a period of decline? If so, locking in a 2 year CD makes sense. This will allow you to have a higher (when compared to 6 or 12 month investments) rate as the market as a whole continues to fall.

[Read more about the certificate of deposit landscape in 2013 here.]

Benefits of a 2 year CD

While a 2 year CD may not be right for every investor, this is an option to consider for a variety of reasons. Here are several benefits to consider:

  • The ability to lock in an interest rate if you feel that rates will continue to decline over the foreseeable future
  • Perfect for those seeking a medium length investment, not something short term or long term
  • A variety of minimum deposit options, allowing you to find a 2 year CD that matches your investment strategy

In our database (shown above), we have the best 2 year CD deposit rates from banks around the country. However, if you do your regular banking with a local credit union, you may want to check out their interest rates as well. Sometimes smaller (and generally more exclusive) credit unions offer higher interest rates on deposits because they are non-profit and have no shareholders to report to.