One of the few banks still offering a 2% CD is Discover Bank. Unfortunately, this requires a long term. Discover Bank's 7-year CD has a 2.00% APY and its 10-year CD has a 2.10% APY. These rates are accurate as of 9/27/2012.
Minimum deposit is $2,500, and these CDs are available in an IRA. Early withdrawal penalty for terms over 5 years is equal to 9 months simple interest on the amount withdrawn. You can see how this penalty would reduce the effective rate if the CD is closed early in my long-term CD comparison post.
Discover Bank used to offer an extra 5 basis points to AAA members. This changed in July. Only a few CDs now get higher rates. In addition, there's no premium rate for the savings and money market accounts. Currently, the only 3 CDs that have rate premiums are the 1-year, 2-year and 5-year CDs. These rates are fairly competitive (1.05% APY 1-year, 1.20% APY 2-year and 1.80% APY 5-year as of 9/27/2012). You can see the latest AAA Discover Bank rates at www.aaa.com/deposits. Note, this page doesn't show for some states. I was told last year that AAA members from any state can qualify for these higher rates. If you can't apply online, you can apply by phone. I have more details in this post.
AAA isn't the only association that has an agreement with Discover Bank for special rates. American Association of Individual Investors (AAII) still offers its members an extra 5 basis points on all CDs, savings and money market accounts. These rates are listed at this Discover Bank/AAII page. AAII basic membership costs $29.
Discover Bank is one of the largest internet banks. It has over $71 billion in assets and over $41 billion in deposits. Its overall health score at DepositAccounts.com is 5 stars (out of 5) with a Texas ratio of 7.08% (excellent) based on June 2012 data. Please refer to our financial overview of Discover Bank for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 5649).
How These CD Rates Compare
There are not many other options if you want a 2% CD. The only other large bank that I know of with a 2% CD is BBVA Compass which still has a special 2% 5-year CD. However, this is only available in a few states where BBVA Compass has branches.
For CDs available nationwide, the only other option is an all-access credit union. Yesterday, I reviewed Air Force Federal Credit Union which has a 2.25% APY 7-year CD. Pentagon Federal Credit Union has a 2.02% APY 7-year CD. Both of these credit unions have larger early withdrawal penalties than Discover Bank. There are four all-access credit unions that offer 2% 5-year CDs. The best deal is currently at Eli Lilly Credit Union.
The above rates are accurate as of 9/27/2012.
Searching for the Best CD Rates
To search for the best nationwide CD rates and the best CD rates in your state, please refer to the CD rates section of DepositAccounts.com.