CD Rates Surge Ahead of Interest Rate Hikes

As interest rate hikes are expected to kick in later this year, savers are flocking to two-year CDs that can offer higher returns before the rates go up. With the Federal Reserve projected to raise short-term interest rates by 25 basis points in March, investors are prioritizing locking in current rates while they’re still high. According to recent data, some of the top 2-year CD offers include those from online banks and credit unions that are offering significantly higher rates than traditional brick-and-mortar institutions. For example, Ally Bank’s 2-Year CD is currently yielding a rate of 4.25% APY, while Capital One’s 2-Year CD is offering a rate of 4.15% APY. For those looking to lock in a high interest rate for two years or more, online banks and credit unions are emerging as attractive options. These institutions often have lower overhead costs than traditional banks, allowing them to offer higher rates to customers. Meanwhile, traditional brick-and-mortar banks are typically offering lower rates due to their higher operating costs. However, some larger banks are still managing to offer competitive rates on their 2-year CDs, such as Bank of America’s 2-Year CD at 4.00% APY. Investors who act quickly can still snag some of the best rates available before interest rate hikes take hold.