Best national 2-year CD rates stand at 1.52%
It's been two weeks since the Federal Reserve finally announced a second rate hike, and CD rates for some terms have enjoyed a little boost.
Unfortunately, 2-year CDs are not yet among them, with the national bank lead sitting at the same 1.52% APY threshold as it did last December.
But we are seeing general upward movement from a number of leading banks, so perhaps better 24-month yields are on the near horizon.
Whether those arrive, it's always smart to seek out credit union and community bank CDs that pay more than the national banks. We've rounded up almost 20 of the best 2-year deals below, including three that pay 2% or better for lucky savers who qualify.
As for what the future of CD rates holds, no one knows how this coming year will play out. But we'll clue you in on what the Fed's predicting.
The top national deals
Today’s top national bank rate of 1.52% APY is offered by co-leaders EverBank and Popular Direct.
Based in Jacksonville, EverBank operates 10 branches in Florida but is more nationally known for its robust online operation.
Usually, we caution readers that EverBank is known for making almost weekly changes to its rate sheet, effective each Friday. But with this current 2-year rate, EverBank has held steady for six weeks now.
Meanwhile, Popular Direct is an online portal of the bricks-and-mortar Popular Community Bank, which operates almost 50 branches in New York, New Jersey and south Florida. Popular Community Bank launched Popular Direct in late July.
Leading 24-month CD rates have been on a yo-yo that's seen the lead languish at 1.50% and 1.51% APY last winter, then bump up in the spring to 1.55% and 1.60% APY — the best leading return we'd seen in more than three years.
Summer then saw the top rate fall back to 1.50% APY, while early fall lifted returns to 1.55% APY before we sank back to 1.52% APY in November.
With this feeling of going nowhere fast, it helps to remember the ground we've regained.
For almost two years between 2012 and 2014, the best national 24-month return was mired between 1.20% and 1.30% APY.
Still, it's hard not to wish for more in 2-year returns.
TOP 2-YEAR CD RATES: Nationally Available Bank Deals
|Gulf Coast Bank & Trust||1.50%||$2,000|
|BAC Florida Bank||1.46%||$1,500|
|State Bank of India-Chicago||1.46%||$2,500|
|Capital One||1.45%||No minimum|
|Live Oak Bank||1.45%||$2,500|
|State Bank of India-New York||1.43%||$5,000|
Earn more with local deals
Fortunately, savers who live in the right place or work for a certain employer can usually outearn the top national rate by shopping local deals.
We're aware of almost 20 credit unions and community banks currently offering 2-year yields that beat the national leaders, including three offers of 2% or more. One deal is even available nationwide.
As always, eligibility requirements apply. So contact the bank or credit union directly to determine if you qualify.
TOP REGIONAL 2-YEAR CDS: Credit Unions & Community Banks
|Bank||States||Term (in months)||APY|
|Peoples Transport Federal Credit Union||New Jersey||24||2.25%|
|Self Reliance New York Federal Credit Union||New York||24||2.07%|
|Institution for Savings||Massachusetts||24||2.00%|
|Collins Community Credit Union||Illinois||28||1.96%|
|Idaho Central Credit Union||Idaho, Nevada||24||1.75%|
|First American International Bank||New York||26||1.70%|
|Texas Exchange Bank||Texas||24||1.69%|
|First Financial Credit Union||California||24||1.63%|
|Advancial Federal Credit Union||Texas, Oklahoma, Louisiana, New Jersey, Alaska||24||1.62%|
|Horizon Credit Union||Washington, Idaho, Montana||26||1.61%|
|Advia Credit Union||Michigan, Wisconsin, Illinois||22||1.60%|
|IH Mississippi Valley Credit Union||Illinois, Iowa||24||1.56%|
|First Service Credit Union||Texas||24||1.55%|
|Sandy Spring Bank||Maryland, Virginia, Washington, D.C.||27||1.55%|
|Credit Union of New Jersey||Nationwide||20||1.50%|
|Service Credit Union||Military affiliation, New Hampshire, Massachusetts||20||1.50%|
Local deals like these or a leading national CD are definitely worth your attention because they can earn you three to four times more than the current national average of 0.48% APY, according to our weekly nationwide survey of banks and thrifts.
The Fed waiting game
The national average for 24-month CDs sank to a record low of 0.36% APY in December 2013 and hit that low point again in July 2014.
Compare that to February 2007, before irresponsible mortgage lending put the economy in a tailspin and the national average return was 3.78% APY.
The decline began when the Federal Reserve stepped in to rescue the economy by pushing short-term interest rates to record lows in December 2008 — and holding them there for the following seven years.
That dismal period finally concluded last December, when the Fed's rate-setting committee kicked off what was expected to be a series of small, gradual rate hikes over the next several years.
But with inflation still not at the healthy level the Fed would like to see, plus various global instabilities this year, the rate-setting committee hesitated through seven of 2016's eight meetings, finally announcing a second hike Dec. 14.
The particulars of the Fed's announcement suggest most members of the committee anticipate making three rate increases in 2017. That would certainly bring some relief to long-suffering savers.
But of course, the Fed predicted three hikes last December, too. With its decision at each meeting highly dependent on the latest economic data, anything is possible and nothing can be assumed.
In the meantime, it's heartening to see this second hike has moved the bar up a tad in a few CD terms and may continue with further ripples.
As always, we'll keep you abreast of the best-paying options here.
Disclaimer: The rates above were gathered Dec. 28, 2016. Before applying, check with the bank or credit union of interest to confirm the offer still stands.