Best 2-Year CD Rates of July 2025

What are 2-year CD interest rates?

Essentially, a certificate of deposit is a savings account that holds a set amount of money for a set period of time. In return for getting to hold your money, the bank pays interest on the sum.

CD rates can be different, depending on how much money is held and for how long. The Federal Deposit Insurance Corp. (FDIC) tracks the average interest rates paid on CDs by banks and credit unions. According to FDIC data, the average interest rate on a 24-month CD with a $10,000 minimum opening deposit is 1.48%.

Of course, this rate has changed over time. The graph below shows how 2-year CD interest rates have moved in recent years.

2-year CD rate history: Average APY (%) rate trend over time

Pros and cons of 2-year CDs

Like any financial decision, investing in a 2-year CD has its advantages and disadvantages. Be sure to weigh them as you make a decision on whether to open a CD.

How to choose a 2-year CD

Once you have a better idea of whether a 2-year CD is right for you, the next step is to select the CD that best fits your needs. Here are five factors to consider as you review your options:

1. Annual percentage yield (APY). The annual percentage yield (APY) is the interest rate you’ll earn while you keep your funds in the CD. It’s a good idea to shop around for the highest rate, especially with online banks. They often have much higher rates than traditional brick-and-mortar banks can offer.
2. Term length. This is the amount of time you’ll need to keep your funds in the CD. Maturity terms last anywhere from a few months to multiple years. Make sure you pick a term length that matches your needs because if you try to withdraw your funds early, you could face a steep early withdrawal penalty.
3. Minimum opening deposit. This is the amount of money needed to start the CD, and it can range from a few hundred dollars to thousands. It’s usually clearly advertised along with the term length, and you’ll typically deposit the money as an upfront lump sum.
4. Early withdrawal penalty amount. As the name suggests, the early withdrawal penalty is the fee you’ll pay if you try to take the money out of your CD before the maturity date. Fee amounts can vary, but it’s usually some portion of your interest earned. Be sure to read the fine print so that you’ll know how much it will cost if you withdraw early.
5. FDIC insurance. Most CDs have FDIC insurance covering you up to the federal limit of $250,000 per accountholder. This protects your savings in the rare event of bank failure.

Alternatives to 2-year CDs

If a 2-year CD is not the right choice for you, here are some alternative options.

• High-yield savings account. A high-yield savings account is a deposit account that helps you earn money on your savings more quickly, thanks to a higher-than-average APY. Rates for HYSAs aren’t usually as high as for CDs, but the funds are more liquid because you can access them whenever you need.
• Money market account. Money market accounts tend to pay higher rates of interest than other forms of savings accounts because their APYs are tied to market rates. These accounts also offer features, such as debit card access. However, in exchange, they can also impose strict transaction limits.