Best 3-Year CD Rates of [current_month_year] (2024)

A certificate of deposit, or CD, is a type of interest-earning savings account offered by banks and credit unions where you keep your money for an agreed-upon amount of time. CDs come in different term amounts, ranging from one month to several years.

Three-year CDs offer interest rates that are usually higher than you can get in high-yield savings accounts. The average 3-year CD rate today is 1.40% APY, however, many 3-year CDs offer higher rates, with the highest above 5%.

A 3-year CD can be a good option if you want your money to grow steadily for the next three years. The best 3-year CDs not only have the best rates but also offer benefits like minimal fees and low deposit requirements.

10 Best 3-Year CD Rates of 2024

Best for No Minimum Deposit

BMO Alto

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Vault Verified

APY

4.60%

Min. Deposit Requirement

$0

Term Length

36 months

Early Withdrawal Penalty

180 days interest

Why We Chose It

BMO Alto is the online-only division of BMO Bank, and it launched in April 2023. BMO Alto’s 3-year CD doesn’t have a minimum deposit requirement and still earns a competitive APY of 4.60%.

Pros

• No minimum deposit
• Competitive APY
• 24/7 customer service via phone

Cons

• BMO Alto is less than one year old
• No mobile application
• 180-day early withdrawal penalty

Best for Those Who Want to Support a Cause

Self-Help Credit Union Term Certificate

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Vault Verified

APY

4.08%

Min. Deposit Requirement

$500

Term Length

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36 months

Early Withdrawal Penalty

180 days interest

Why We Chose It

Self-Help Credit Union Term Certificate is open to anyone after paying a one-time fee of $5. Self-Help Credit Union also offers specialty certificates that allow you to support specific initiatives, like women empowerment, economic development projects or eco-friendly projects.

Pros

• You can choose a specialty certificate that allows you to support specific initiatives
• Anyone can join the Self-Help Credit Union nationwide with a one-time fee of $5
• Only $500 minimum deposit

Cons

• Not the highest APY
• 180-day early withdrawal penalty
• No Sunday phone support

Best High APY for a Credit Union

United States Senate Federal Credit Union

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Vault Verified

APY

4.08% – 4.18%

Min. Deposit Requirement

$1,000

Term Length

36 months

Early Withdrawal Penalty

180 days of dividends paid and accrued

Why We Chose It

You can join the United States Federal Credit Union if you work for or are retired from one of the over 100 select employee groups, are an immediate family member of a current United States Federal Credit Union member, a member of The U.S. Capitol Historical Society or a member of The American Consumer Council. Thankfully, anyone can join the nonprofit American Consumer Council by agreeing to a free, one-year membership. Plus, its 3-year CD earns one of the highest APYs on our list: 4.08% to 4.18% APY, depending on the account balance.

Pros

• High APY of up to 4.18%
• Some may feel secure having their money with the federal government
• Offers jumbo 3-year CDs of over $200,000 for highest APY

Cons

• $1,000 minimum deposit
• Six months early withdrawal penalty
• Eligibility limitations

Best High APY for a Bank

DollarSavingsDirect

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Vault Verified

APY

5.00%

Min. Deposit Requirement

$1,000

Term Length

36 months

Early Withdrawal Penalty

180 days interest

Why We Chose It

DollarSavingsDirect, while a unique name, is an FDIC-insured online division of Emigrant Bank, which is headquartered in New York. DollarSavingsDirect offers a high APY of 5.00% for a 3-year CD. Plus, interest is compounded daily. You must be a DollarSavingsDirect account holder to be eligible for a 3-year CD.

Pros

• High APY of 5.00%
• Interest is compounded daily
• Automatic notification prior to maturity

Cons

• You must be a DollarSavingsDirect account holder
• $1,000 minimum deposit
• Out-of-date website

Best for Low Early Withdrawal Penalty

Prime Alliance Bank

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Vault Verified

APY

4.25%

Min. Deposit Requirement

$500

Term Length

36 months

Early Withdrawal Penalty

90 days interest

Why We Chose It

Prime Alliance Bank offers one of the highest APYs for a 3-year CD from a bank, at 4.25%. While we never recommend withdrawing money early from a CD, Prime Alliance Bank’s early withdrawal penalty is on the lower side compared to some of the other accounts on this list.

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Pros

• Competitive APY of 4.25%
• Early withdrawal penalty is relatively lower than average
• Minimum deposit is relatively low

Cons

• Limited customer service hours
• Interest is paid quarterly
• Only one physical bank location

Best for a Withdrawal Grace Period

Barclays

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APY

3.50%

Min. Deposit Requirement

$0

Term Length

36 months

Early Withdrawal Penalty

180 days interest

Why We Chose It

Barclays offers a 14-day grace period in which funds can be withdrawn from the CD without penalties. Plus, Barclays doesn’t have a minimum deposit requirement for its 3-year CD, and interest is even compounded daily.

Pros

• Offers a 14-day grace period in which funds can be withdrawn from the CD without penalties
• Interest compounds daily
• No minimum deposit required

Cons

• 180 days of interest early withdrawal penalty after the initial 14-day grace period
• APY is good, but not the highest
• Limited branch access

Best For IRA CDs

Alliant Credit Union

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APY

4.20% – 4.30%

Min. Deposit Requirement

$1,000

Term Length

36 months

Early Withdrawal Penalty

Up to 180 days of interest

Why We Chose It

Alliant Credit Union is an online credit union that offers regular and jumbo CDs, as well as IRA CDs. Alliant Credit Union offers 36-month CDs in regular or jumbo size, which are for amounts over $75,000. The APY on a 36-month CD is 4.20% and the APY on a 36-month jumbo CD is 4.30%. Both regular and jumbo CDs are also offered as Traditional IRA certificates, Roth IRA certificates and SEP IRA certificates. To open an IRA certificate, you must have or establish an IRA with Alliant.

Pros

• Jumbo CDs earn a little more interest
• Alliant offers IRA CDs
• No penalties for monthly dividend withdrawals

Cons

• Dividends are compounded monthly
• To open an IRA CD, you must have an IRA with Alliant
• $1,000 minimum deposit

Best for Environmental Sustainability

Forbright Bank

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Vault Verified

APY

3.00%

Min. Deposit Requirement

$1,000

Term Length

36 months

Early Withdrawal Penalty

6 months of interest

Why We Chose It

Forbright Bank’s CDs support renewable energy and energy efficiency projects across commercial and residential buildings for things like renewable energy, lighting and electricity, water efficiency and HVAC. Although the APY is lower than many other competitors, it is compounded daily and posted monthly.

Pros

• Money goes toward renewable energy and energy efficiency projects
• You can apply for a CD online or in person at a branch in Maryland or Northern Virginia
• Interest is compounded daily

Cons

• Fairly low APY of 3.00%
• $1,000 minimum deposit
• Six months interest early withdrawal penalty

Best Online-Only CD

First Internet Bank Of Indiana

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Vault Verified

APY

4.61%

Min. Deposit Requirement

$1,000

Term Length

36 months

Early Withdrawal Penalty

360 days interest

Why We Chose It

First Internet Bank of Indiana offers a 3-year CD with a competitive APY of 4.61%. First Internet Bank of Indiana was established in 1999 and is an online bank that serves all 50 states.

Pros

• APY of 4.61%
• 10-day grace period upon maturity to withdraw money from the account
• Customer service support by phone from 7 a.m. to 9 p.m. EST on weekdays and 9 a.m. to 3 p.m. EST on Saturdays

Cons

• $1,000 minimum deposit
• Early withdrawal penalty of 360 days’ interest
• CDs automatically renew at maturity

Best for Large Deposits

Discover

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Vault Verified

APY

3.75%

Min. Deposit Requirement

$2,500

Term Length

36 months

Early Withdrawal Penalty

6 months interest

Why We Chose It

Discover Bank’s 3-year CD is open for amounts between $2,500 and $5,000,000, and it earns a 3.75% APY.

Pros

• Available for accounts up to $5,000,000
• Large network
• No monthly maintenance fees

Cons

• Large minimum deposit may be prohibitive for some
• Six months interest early withdrawal penalty

3-Year Certificate of Deposit Overview

Before opening a 3-year CD, you should have an understanding of what 3-year CDs are, how 3-year CDs work and who would benefit from 3-year CDs.

What Is a 3-Year CD?

A certificate of deposit (CD) is a savings account that has a fixed interest rate and term. A 3-year CD is a certificate of deposit account that you agree to keep money in for three years. The principal amount in the CD is protected, so you won’t have to worry about fluctuations in value like with the stock market. The interest rate for a CD is locked in when you deposit the money, and interest rates on CDs can be higher than on savings accounts or money market accounts.

How Do 3-Year CDs Work?

Some CDs have a minimum opening deposit amount. After your initial deposit, you likely won’t be adding money to the CD, as most CDs don’t allow for ongoing contributions. Your money sits in the account earning interest until the CD maturity date.

A three-year CD matures on a specific date exactly three years after you open it. At the end of the three years, you can withdraw your original principal plus whatever interest it earned. If you withdraw your money earlier than the maturity date, you will likely have to pay a penalty, which can be worth several months of interest earned. Three-year CDs earn the same rate of interest over the entire three-year period. Interest gets compounded over time, and compounding occurs in regular intervals, such as daily or monthly.

CDs have federal deposit insurance up to $250,000 at banks insured by the Federal Deposit Insurance Corporation and at credit unions insured by the National Credit Union Administration.

Who Should Get a 3-Year CD?

Those who want to earn interest on their money and don’t want to worry about fluctuations in the stock market should consider a 3-year CD. You should only consider a 3-year CD if you don’t need access to your money for at least three years. If you are not sure you can keep your money in the account for three years, you could choose a CD with a smaller term, like six months or one year. These accounts will often earn a lower yield, however.

Three-year CDs might be a good choice for people who want to lock up funds for a future purchase at a specific date. They might also be a good choice for those who want to protect their wealth for several years.

Pros and Cons of 3-Year CDs

Opening a 3-year CD can be a great choice, but there are some drawbacks to consider. Before deciding to open a 3-year CD, weigh the following pros and cons.

Pros of 3-Year CDs

• Many CDs don’t charge fees, except for early withdrawal penalties
• Interest rates on CDs can be higher than on savings accounts or money market accounts
• The principal amount in the CD is protected, so you won’t have to worry about fluctuations in value like with the stock market

Cons of 3-Year CDs

• You will likely have to pay a penalty fee if you withdraw your money earlier than the three-year maturity date
• If interest rates go up after you open a 3-year CD, you won’t be able to take advantage of them, since your interest rate is locked at the time of account opening
• Most CDs don’t allow for ongoing contributions after the initial deposit

What to Consider When Choosing a 3-Year CD

When choosing a 3-year CD, there are several factors to consider, including:

• APYs
• Fees
• FDIC or NCUA insurance
• Compounding rates
• Minimum deposits

APY

The APY, or annual percentage yield, is the rate of return earned on your money, taking into account the effect of compounding interest. You want to earn the highest APY possible when you open your account because the APY is not adjusted once it is set for a three-year CD.

Fees

Many CDs don’t charge fees beyond an early withdrawal penalty. There is no need to pay a monthly fee for a 3-year CD. You should also compare the early withdrawal fee when deciding between three-year CDs as well. While you never want to pay this fee, it is important to know what it is before opening the account.

FDIC or NCUA Insured

CDs have federal deposit insurance up to $250,000 at banks insured by the Federal Deposit Insurance Corporation and at credit unions insured by the National Credit Union Administration. This means if something happens to your bank or credit union, you won’t lose your money (as long as it’s less than $250,000). You should only consider banks and credit unions that are FDIC or NCUA insured. If you want to keep more than $250,000 in a three-year CD, you may want to consider splitting it among multiple banks for liability purposes.

Compounding Rate

CDs compound daily, weekly or monthly. In general, the more frequent the compounding, the better your returns. If possible, choose a CD that compounds daily or weekly.

Minimum Deposit

Many 3-year CDs have a minimum deposit requirement. If the minimum amount is higher than you would like to deposit, exclude that account as an option. Once you make your initial deposit, you usually can’t deposit more into the CD.