Earn up to 2.25% with winter's top 2-year CDs

Piggy bank in dollar bills

Now that the Federal Reserve has finally begun to push interest rates higher, we're waiting with bated breath to see banks respond with better yields for savers.

But so far, nothing, which means three things.

E-Loan's 1.52% APY return is still the top nationally available return for a 2-year CD, a lead it captured at the end of July and has held uncontested ever since.

You must take advantage of local deals from credit unions and community banks, which are paying as much as 2.25% APY on 24-month certificates, to earn top dollar on your investments.

And we're continuing to watch and wait for the first sign of the nation's banks or credit unions responding to the Fed with significantly higher savings rates.

The top national deals

E-Loan's return is just a hair below the 1.55% that Citizens State Bank offered from September 2014 through the first week of January.

But when Citizens State stopped offering its CDs nationally, the top 2-year yield sank to 1.35% APY and disappointingly stalled there until returns began increasing in May.

Recovering most of that lost ground is welcome news for a term whose leading rate not only was mired below 1.30% APY for close to two years between 2012 and 2014, but was at its post-recession low of 1.20% APY just a year and a half ago.

E-Loan is an online operation of Popular Community Bank, which has almost 50 branches throughout New York, New Jersey and south Florida.

In addition to holding the national 2-year lead, it also offers the top returns for 1-, 3-, 4- and 5-year CDs.

TOP 2-YEAR CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
E-Loan 1.52% $10,000
EverBank 1.47% $1,500
Silvergate Bank 1.47% $25,000
AloStar Bank of Commerce 1.46% $1,000
Synchrony Bank 1.45% $2,000
California First National Bank 1.45% $5,000
Colorado Federal Savings Bank 1.45% $5,000
First Internet Bank of Indiana 1.41% $1,000
CIT Bank 1.40% $1,000
North American Savings Bank 1.36% $1,000
Triumph Savings Bank 1.35% $1,000
Nationwide Bank 1.32% $500
BAC Florida 1.31% $1,500
State Bank of India — Chicago 1.31% $2,500
State Bank of India – New York 1.31% $5,000
Ally Bank 1.30% No minimum
Barclays Bank 1.30% No minimum
Capital One 360 1.30% No minimum
5Star Bank 1.30% $1,000
Nordstrom Bank 1.30% $1,000
Northpointe Bank 1.30% $1,000
Discover Bank 1.30% $2,500

Earning more with local deals

Fortunately, savers who live in the right place or work for the right employer almost always have options to outearn the top national rate by shopping for local deals.

We're aware of almost 30 credit unions and community banks currently offering 2-year yields that not only beat E-Loan but pay as much as almost three-quarters of a percentage point more for savers who qualify.

TOP 2-YEAR CD RATES: Credit Union, Community Bank Deals

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%
Allegany County Teachers Federal Credit Union Maryland 24 2.02%
Indiana Members Credit Union Indiana 25 2.02%
Members Choice of Central Texas Federal Credit Union Texas 24 2.01%
First Federal Credit Union Iowa 24 2.00%
Select Federal Credit Union Texas 24 2.00%
Four Corners Federal Credit Union New Mexico, Colorado, Utah, Arizona 24 1.96%
Financial Plus Credit Union Michigan 29 1.77%
University of Iowa Community Credit Union Iowa, Illinois 23 1.75%
Idaho Central Credit Union Idaho, Nevada 24 1.75%
Cedar Falls Community Credit Union Iowa 25 1.75%
Dupaco Community Credit Union Iowa, Wisconsin, Illinois 25 1.75%
Farmers State Bank Iowa 25 1.75%
Veridian Credit Union Iowa, Nebraska 25 1.70%
Pioneer Federal Credit Union Idaho 25 1.65%
Greater Springfield Credit Union Massachusetts 24 1.61%
North Platte Union Pacific Employees Credit Union Nebraska 24 1.61%
Westmark Credit Union Idaho 23 1.60%
Federal Employees Credit Union Federal employees and military nationwide 24 1.60%
Georgetown Bank Massachusetts 24 1.60%
F&A Federal Credit Union California 24 1.56%
Advancial Federal Credit Union Texas, Oklahoma, Louisiana, New Jersey, Alaska 24 1.55%
Transit Employees Federal Credit Union Washington, D.C. 24 1.55%
Mutual Security Credit Union Connecticut 25 1.55%
Bogota Savings Bank New Jersey 20 1.50%
Southbridge Credit Union Massachusetts 22 1.50%
Omaha Federal Credit Union Nebraska 23 1.50%

Waiting for Fed ripples

As you can see, both local deals and leading national CDs are worth your attention because they can earn you three to five times more than the current national average of 0.43% APY, according to our weekly nationwide survey of banks and thrifts.

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 for 24-month CDs was 3.78% APY.

That decline was caused by the Federal Reserve, which stepped in to rescue the economy by pushing short-term interest rates to record lows in December 2008 — and holding them there.

The dismal period finally concluded two weeks ago, when the Fed's rate-setting committee kicked off what's forecasted to be a series of small, gradual rate hikes over the next three years.

As expected, they began with a small increase of just a quarter of a point in the federal funds rate, which is what commercial banks pay to borrow money from each other through the Fed.

When the fed funds rate increases, it makes money more expensive for banks, which in turn makes it more attractive for them to court individual savers for their deposits.

Any bump in what Americans can earn on their savings will be a welcome change in the landscape, after suffering minuscule returns for so long.

But though our wait on the Fed's first hike has finally come to an end, we now find ourselves waiting for banks to react by upwardly revising their rate sheets.

It's a tortuously long wait to see CD yields regain even a bit of their past glory. But to get back to national 2-year certificates paying anything close to the 3% to 4% yields we enjoyed before the 2008 financial crisis, wait we must.

Meanwhile, we'll keep you posted on the best-paying options here.