Earn up to 1.20% with our top 2-year CD rates
There are three new leaders offering the top deals on 2-year CDs, according to our October survey of the best nationally available rates.
CIT, Nationwide and AloStar are all paying 1.20% APY.
The biggest difference you'll find between these banks in this minimum deposit amount.
Nationwide requires an easy $500 minimum, and AloStar wants a modest $1,000 to open, but CIT requires a steep $25,000.
Overall, there are 10 banks paying 1.10% APY or higher on 24-month CD rates.
This is all a little less than the 1.25% APY you could have earned from our previous leader, Salem Five Direct. But it dropped its rate a couple of times last month and is no longer ranked among our best deals.
We've said it before, and we'll say it again: Stability is about the best we can hope for in this environment.
The Federal Reserve mainly influences how much we make on our savings by setting the federal funds rate, the interest rate that commercial banks pay to borrow money from the Fed.
Since December 2008, that rate has been essentially zero, so we haven't been seeing any truly enticing savings rates for the last five years or so.
Despite dismal rates, we've piled a record $7 trillion into low-paying savings accounts of various kinds at banks, with around $3 trillion of that being dumped in since 2009.
But low interest rates have also prompted savers to pour a lot of money into stocks this year.
TrimTabs, an investment research firm based in Sausalito, Calif., says we shoveled more than $50 billion into stock mutual funds and exchange-traded funds in October.
That's the fifth-largest monthly inflow on record after January and July of this year grabbed the top two spots, hitting $66.3 billion and $55.3 billion, respectively.
Here are the best nationally available 24-month certificates of deposit, as of today:
Top 24-month CD Rates
|GE Capital Retail||1.15%||$25,000|
|Hudson City Savings||1.15%||$5,000|
To qualify for this list, a bank must allow savers from all 50 states to buy its certificates of deposit online or through the mail.
Click here to compare these returns with the top CD rates from dozens of banks in your area.
Our CD calculator will help you figure out the interest you'll earn, for any term, amount and interest rate.
How to buy the top 2-year CD rates
|CIT Bank||The online consumer bank of CIT Group Inc., which offers financing to small businesses and middle-market companies.||www.bankoncit.com|
|Nationwide Bank||An online bank owned by Nationwide Mutual Insurance Company and its affiliates.||www.nationwide.com|
|AloStar Bank of Commerce||An online bank based in Birmingham, Ala., formerly known as Nexity Bank.||retail.alostarbank.com|
|GE Capital Bank||One of two online banks, each with its own FDIC insurance, that are subsidiaries of GE Capital Corp., the financial services unit of the manufacturing giant.||gecapitalbank.com|
|GE Capital Retail Bank||The other subsidiary of GE Capital Corp.||banking.gecrb.com|
|Hudson City Savings Bank||Operates 130 branches in New Jersey, New York and Connecticut.||hcsbonline.com|
|BAC Florida||Operates one branch in south Florida and sells its products nationally through My e-BAnC.||www.bacflorida.com|
|Virtual Bank||The online division of Sabadell United Bank, based in Miami.||www.virtualbank.com|
|Pacific Mercantile||A Southern California community bank with seven branches from San Diego to Los Angeles.||www.pmbank.com|
|Palladian PrivateBank||An online division of The PrivateBank and Trust Co., which has 34 branches in nine states.||www.palladianprivatebank.com|
Over the past several decades, savers could usually count on earning something like 3% or 4% on a 2-year CD.
But the Federal Reserve has driven returns to record lows in an attempt to haul the economy out of the worst financial crisis and recession since the 1930s.
It did that by lowering the federal funds rate to essentially zero in December 2008 — and leaving it there.
Since then, the average return on 24-month CDs has fallen from 2.42% APY to a record-low 0.37% APY today.
Late last year, Fed Chairman Bernanke said the central bank would start bumping rates up when the unemployment rate hit 6.5%.
With that goal in mind, savers anxiously watched the jobless rate fall to 7.3% in August. Not quite there, but closing in.
Then Bernanke told a news conference after the Fed's rate-setting committee met on Sept. 18 that “the first increases in short-term rates might not occur until the unemployment rate is considerably below 6.5%."
Indeed, the Fed chairman said a return to market-driven rates — and a reasonable return on our savings — could be "several more years" down the road.
Not surprisingly, the Fed policy-making committee decided to hold out on making any type of decision at its late October meeting, reiterating its commitment to hold short-term interest rates near zero.
Contributing editor Darci Swisher contributed to this report.
Follow Mitch Strohm on Google Plus.