Hi, S.! We added a 2nd child when my daughter was 3 years old. The transition has been both challenging and fun. My daughter was already in day care when the baby was born. I would not recommend making both transitions at the same time. We found she really needed to stay home more often when he was born, because she needed more of Mommy to reassure her she still had her place in the family. So, IF you are going to put your older one into day care, I'd do it earlier, and maybe only part time.
Another option to consider is childcare in your home. When our new baby was 6 months old, and we needed help with both children so we could work some, we brought in an au pair. It has been an amazing and wonderful experience for all of us. My older daughter experienced a lot of stress in a day care environment, but she has blossomed being back at home with a care provider. It also gives us amazing flexibility, since we have our own business and don't always operate on a "day care center" schedule.
If you didn't feel you needed full time help, you could consider a nanny instead of an au pair.
It also gave us the opportunity to have our older child in activities of interest to HER instead of just whatever day care decided she should do. So the au pair takes her to dance and gymnastics lessons once each week. Kelly gets to socialize with the other children and do something fun, but still have the one-on-one (ok one-on-two!) attention most of the time, instead of being in a room of 30 children or whatever it was.
Another choice would be preschool, which is usually just 2 or 3 hours a day, 3 to 5 days a week. Gives you time alone with the new baby, and your older one the social time, but without the long days and stress of day care.