Interest rate uncertainty has some banks pushing their longer-term certificate of deposit rates over 2.00% for a 2-year term. Among national and Internet-based banks, here are the top annual percentage yields (APY), current as of Thursday, April 22, 2010.
2-year certificate of deposit terms have brimmed the 2.00% APY mark, as banks attempt to attract longer-term customers amid interest rate uncertainty. Leading the way in this week’s BankShout survey is Aurora Bank FSB, which is advertising 2.01% APY for a 2-year term with a minimum deposit of $1000. American Express Bank FSB and Discover Bank, separately, are both offering 2.00% APY on the 24-month term. American Express requires no minimum deposit, while Discover’s deal is good on balances of $2500 or more.
Ally Bank is close behind 1.99% APY for a 2-year term, also with no minimum balance. Nexity Bank also offers 1.99% APY with a $1000 minimum balance.
The drop-off in yield among national and Internet banks can become steep: for instance, Capital One Direct Banking has an annual percentage yield of just 1.25% for a 2-year CD on minimum deposits of 1.25%. 2-year terms are averaging about 50 basis points higher than 1-year certificates. 5-year terms at some banks are currently above 3.00% APY.
Savers may be hesitant to lock up big deposit amounts for multi-year terms, but no one can tell if interest rates will rise anytime soon. Some countries like Australia and China, fearing inflation, have raised their federal interest rates. Yet everything I have read recently (The Economist, WSJ, etc.) indicates that the U.S. Fed is too concerned about the fragile U.S. economy to raise rates this year, likely affecting savings rates as a result.


Kevin Fleming founded the CreditShout Network in 2008 to help people manage their credit and finances. Kevin wants to make it easy for anyone, regardless of their level of financial knowledge to understand banking and what may seem like the complex world of personal finance.

