If you’ve got $25k and are in the market for a high yield 2 year CD, you’ll want to check out CiT Bank’s current offer of 1.26% APY. CiT Bank has lead our CD rate market place for a while now on a number of products but was just recently bumped from the number 1 spot on 1 year certificate of deposits.
We love the ease in which one can obtain a CD through CiT Bank. It takes only minutes to set up and you can do it online with a direct deposit. The only catch is that they require a relatively steep minimum deposit requirement of $25,000.
Early this month we hinted that two year CD’s were likely the best FDIC insured deposit account to get involved at this time. Ben Bernanke and the FED has made note that these record low rates will likely remain this low throughout 2012 and most of 2013 as well. Even though he publicly stated this recently it doesn’t mean it’s set in stone, but it is more than likely the most probable outcome. Unless the economy as a whole takes a rapid turn for the better, interest rates in general will likely not budge.
The reason 2 year CD’s pose an enticing term is because your CD will mature at the precise time deposit rates may begin to rise – allowing you to re-invest your funds into a more lucrative CD rate with an alternative term.
An important reminder when investing in bank CDs is this: always call your bank ahead of time (as in one to two months before you CD matures) to make sure they know you would like your funds removed from the deposit account. In almost all situations banks and credit unions alike will automatically reinvest your funds in the exact same deposit product they were in beforehand unless you take the proactive approach in contacting them directly. We routinely receive complaints on our comment sections of people enraged at their bank or credit union for failing to do this.
Top 2 year CD Rates Available Nationally and Online (January 2012 Edition):
1) CiT Bank features a 2 year CD with an interest rate of 1.25% compounded daily (1.26% APY) and requires a $25,000 deposit.
2) VirtualBank holds the number 2 spot featuring a 2 year CD with an interest rate of 1.20% compounded daily (1.21% APY) and requires a $10,000 deposit.
3) USAA Bank and Discover Bank are tied for the third spot featuring 2 year CD’s with an interest rate of 1.19% compounded monthly for USAA Bank and 1.19% compounded daily for Discover Bank. USAA Bank requires a $1,000 minimum deposit while Discover Bank requires a $2,500 minimum deposit.