Best national 2-year CD rates stand at 1.55%

Piggy bank in dollar bills for 2-year cd rates

Since the Federal Reserve hiked interest rates in December, 2-year CD rates have bobbed up and down, and currently sit just a smidge above what you could earn at the time of the Fed's increase.

One bank has been toying with the lead for almost all of the last 10 months, paying a current yield of 1.55% APY.

As usual, though, a handful of credit unions and community banks across the country are offering that much or better — above 2% for some lucky savers. So you're smart to see if you qualify for any of the local deals we've rounded up for you below.

As for what the future of CD rates holds, it's unknowable when the Fed will make a second hike. But we'll clue you in on the possibilities.

2-year cd rates

The top national deals

E-Loan is the one place you can still earn 1.55% APY on a 2-year term.

Popular Direct was also offering that rate until Monday, having lowered its return to 1.50% APY. It's notable because E-Loan and Popular Direct are both online portals 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, with an array of CD terms and rates identical to E-Loan's, prompting me to ask the bank's chief operating officer, Manual Chinea, about the reason for running two parallel operations.

Chinea explained they are market-testing Popular Direct to see how well an online operation that's better aligned with the bank's corporate brand identity can attract consumer deposits.

When I talked to Chinea in early August, he said they expected to keep Popular Direct and E-Loan's CD offerings synchronized for at least a couple of months more, at which time they'd assess their findings to decide if they'd learned enough or need more data.

So does Popular Direct's decrease Monday while E-Loan stays steady signal the end of the market test? It's too soon to say, but we'll keep watching.

In any case, leading 2-year CD rates have been on a yo-yo string that's gone up and down with the seasons ever since the December hike.

Through the winter, the top rate on national 24-month certificates languished at 1.50% and 1.51% APY.

Then spring saw the top rate bump up to 1.55%, and later to 1.60% APY, the best leading return we'd seen in more than three years.

That was not to last, however, with summer bringing the top rate back down to 1.50% APY.

It wasn’t until about Labor Day that Popular Direct and E-Loan raised the bar back up to 1.55% APY.

While that 2-year yield isn't much to celebrate, 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.

So for now, we'll consider a 2-year yield that's above the pre-Fed level of 1.52% as a minor win.

TOP 6-MONTH CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
E-Loan 1.55% $10,000
Popular Direct 1.50% $10,000
EverBank 1.46% $1,500
Synchrony Bank 1.45% $2,000
Live Oak Bank 1.45% $2,500
State Bank of India-Chicago 1.43% $2,500
State Bank of India-New York 1.43% $5,000
TAB Bank 1.42% $1,000
BAC Florida Bank 1.41% $1,500
Bank of Baroda 1.40% $1,000
Triumph Savings Bank 1.40% $1,000
First Internet Bank of Indiana 1.36% $1,000

Earn more with local deals

Fortunately, savers who live in the right place or work for a certain employer can often outearn the top national rate by shopping local deals.

We're aware of a dozen credit unions and community banks currently offering 2-year yields that beat the national leaders, including four offers of 2% or more. One is even available nationwide.

TOP REGIONAL 6-MONTH 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%
Community First Bank Pennsylvania 29 2.00%
First Federal Credit Union Iowa 29 2.00%
Farmers State Bank Iowa 29 1.80%
Idaho Central Credit Union Idaho, Nevada 24 1.75%
Manatee Community Federal Credit Union Florida 24 1.75%
Garden Savings Federal Credit Union Nationwide 24 1.66%
Deere Employees Credit Union Illinois, Georgia, Wisconsin, South Carolina, Iowa, North Dakota 24 1.65%
North Platte Union Pacific Employees Credit Union Nebraska 24 1.61%
Cedar Falls Community Credit Union Iowa 25 1.60%
IH Mississippi Valley Credit Union Illinois, Iowa 24 1.56%

Local deals like these or a leading national CD are definitely worth your attention since they can earn you three to five times more than the current national average of 0.46% 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 in December 2015, when the Fed's rate-setting committee kicked off what was predicted 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 has since hesitated, announcing no rate hikes at the six meetings since December.

The Fed holds its next meeting in three weeks, but a majority on Wall Street project we won't see the next hike until December, or even 2017.

In any case, we've seen that one small increase hasn't moved banks to boost their rate sheets. Will a second bump finally trigger some movement?

No one knows, but we'll always tell you the best-paying options here.

Disclaimer: The rates above were gathered on October 11, 2016. Before applying, check with the bank or credit union of interest to confirm the offer still stands.