Best 2-Year CD Rates from Eco Banks



CD rates are moving lower. That’s the conventional wisdom anyway. With the Federal Reserve poised to support ultra-low interest rates for the foreseeable future, it may be a good idea to lock-in rates on deposits before CD rates, money market rates, savings rates and checking rates move lower. The next question is what CD term to pick? An analysis of the yield curve indicates that 2-year terms may be favorable right now.


Currently, the two-year Treasury bill is yielding 0.34%. If you can buy a $10,000 2-year CD with an APY of 1.60% this gives you a healthy 126-basis point spread over the the T-bill alternative.  After two years, this would mean an extra $126 in interest earned. If you keep rolling over 90-day CDs for the same time period you would lose your rate advantage and could pick up some extra bank service fees that would cut into your earnings. So while no one blames for by not jumping for joy about 1.60% rates, just remember if inflation stays low your real interest rate is actually quite good.


Real Interest Rate = Nominal Interest Rate – Inflation Rate


You might feel better with a 4% 2-year CD rate, but if inflation is 5% you are actually better off today with the 1.60% rate. Also remember that Green Bank Report is listing the highest yielding 2-year CD rates. Chances are your local bank is offering a rate below 0.75%. Better to go with the higher-rate greener option.



Highest Yielding 2-Year CD Rates from Green Banks


iGOBanking.com, 2.25% APY, $1,000 minimum, link

Bank of Internet USA, 1.72% APY, $1,000 minimum, link

Virtual Bank, 1.61% APY, $10,000 minimum, link

First Internet Bank of Indiana, 1.60% APY, $1,000 minimum, link

NewDominion Direct, 1.60% APY, $3,000 minimum, link


The banks listed above are FDIC-insured up to $250,000 per depositor



Updated CD rates and bank deposit rates

 

 


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