Savers have tons of places to park their cash. But choosing between a savings account and a certificate of deposit (CD) can be difficult.

A CD allows you to tuck away your money at a bank and earn fixed interest on that money until the CD matures. But because 3-month CDs are pretty short investments, banks tend to offer lower interest rates on these when compared to a high-yield savings account.

The top savings accounts pay nearly 2.3 percent APY. But the average yield is much lower (0.10 percent APY). If you’re hoping to earn a higher rate of return and you want the money you invest to be accessible, consider buying a 3-month CD.

The best 3-month CD rates available from banks and credit unions pay nearly six times the national average of 0.31 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.

The best 3-month CD rates for December 2019

Today’s top nationally available 3-month CDs pay 1.85 percent APY (when the minimum deposit is $25,000 or less). They could be a great place to invest for short-term financial obligations, like establishing a rainy day fund you can eventually transfer to a savings account.

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Finding the best 3-month CD rates

Comparison shopping is a must when you’re looking for the best 3-month CD rates. There are multiple types of CDs, including bump-up CDs and liquid CDs. But the top 3-month CD rates are usually found in the form of a traditional CD.

Check out the best 3-month CDs offered by banks and credit unions and weigh the pros and cons of going with a short-term certificate of deposit over an account that’s more liquid. Don’t forget to crunch the numbers and calculate how much interest you could earn by the end of your term.

Best 3-month CD details

Spectrum Credit Union – 1.85% APY; $500 minimum deposit

Spectrum Credit Union offers today’s top nationally available 3-month CD, which pays just under 2 percent APY. The institution offers a variety of CDs with yields that differ depending on the minimum deposit. For example, for CDs with longer terms, it’s possible to earn extra basis points by depositing $50,000 to $250,000 or more.

Founded in 1973, Spectrum Credit Union is based in Oakland, California. It is a division of Chevron Federal Credit Union. Membership is open to anyone who joins the Contra Costa County Historical Society or the Navy League of the United States.

MyBankingDirect – 1.65% APY; $2,500 minimum deposit

MyBankingDirect offers two short-term CDs that mature in three months and nine months. The 3-month CD requires a larger minimum deposit and pays a slightly lower yield.

The online bank is a division of the New York Community Bank. Accounts — including CDs, a checking account and a money market account — can be accessed 24/7. Services available include bill pay, mobile check deposit and the ability to transfer money through Popmoney if the recipient or sender has a different bank.

Advancial Federal Credit Union – 1.62% APY; $25,000 minimum deposit to earn APY

At Advancial Federal Credit Union, members are rewarded with a higher yield for making larger deposits. To earn the highest yield available, you’ll have to deposit a significant amount. There are however, CDs that can be opened with as little as $100.

Founded in 1937, the credit union offers membership to any U.S. citizen or permanent resident alien who joins Connex, a professional, online interactive network.

Bethpage Federal Credit Union – 1.60% APY; $50 minimum deposit to open

Bethpage Federal Credit Union makes its CDs available to members across the income spectrum. Only a $50 minimum deposit is required. Most standard CD terms are offered between three months and five years.

Founded in 1941 and based in Bethpage, New York, Bethpage Federal Credit Union originally served employees of Grumman Aircraft Engineering Corporation. Today membership is open to anyone who opens a savings account with a minimum of $5.

USALLIANCE Financial – 1.60% APY; $500 minimum deposit

The credit union is based in Rye, New York. In addition to regular share certificates and specials there are money market and savings accounts and banking options for kids.

Membership is open to anyone who joins an organization or association like the American Consumer Council or the Rye Arts Center. Investment and insurance products are available in addition to loans and various deposit accounts.

3-month CD rates offered by popular banks

Check out the 3-month CD rates offered by some of the country’s most popular big banks:

Ally Bank – 0.75% APY, no minimum deposit

Ally Bank is an online-only bank that has been around for a little more than 10 years. Its CDs have competitive APYs and few require a minimum deposit.

The bank offers several different types of CDs. In addition to its standard CDs, it has a Raise Your Rate CD and a no-penalty CD. The Raise Your Rate CD allows the interest rate to increase once with the two-year CD or twice with the four-year CD if the balance tier increases on your CD.

Ally Bank’s early withdrawal penalties are less harsh than those that apply at most other banks. For example, the penalty applying to CDs maturing in five years is 150 days of interest (usually it’s equal to at least 180 days of interest).

Synchrony Bank – 0.75% APY, $2,000 minimum deposit

Synchrony Bank offers competitive yields across 12 terms. All standard CD terms typically offered by banks and credit unions are available. The bank also offers a savings account and a money market account. The savings account has a competitive APY and has no minimum balance requirement.

The bank is an online-only financial institution that’s part of a company that also issues credit cards. The bank’s relatively new mobile app makes it possible to transfer funds and check account balances at any time from anywhere.

Barclays Bank – 0.35% APY, no minimum deposit

Barclays Bank doesn’t have minimum balance requirements to open its CDs and savings account. That means it’s an option for savers across all income levels. The bank offers nine CD terms. It has competitive yields, but it doesn’t tend to offer the highest available APY. Barclays also offers a savings account, which has a competitive APY.

The bank is headquartered in the U.K. and has a global presence. In the U.S., its products are limited, but the bank overall rates well for its lack of monthly fees and deposit products.

Discover Bank – 0.35% APY; $2,500 minimum deposit to open

Discover Bank offers CDs across all standard terms ranging from three months to 10 years. The 3-month CD pays the lowest yield, however, so you’ll have to invest for a longer period of time to earn a decent rate of return.

Discover is an online bank headquartered in Greenwood, Delaware. One of its core values is to help bring financial education to students nationwide. Until August 2000, it was known as the Greenwood Trust Company, which was incorporated in 1911.

BMO Harris – 0.05% APY, $5,000 minimum deposit

BMO Harris is a regional bank based in Chicago with limited branch access. But the CDs on its website are available nationwide.

The bank gives customers access to more than 43,000 ATMs and has branch locations in eight states. Representatives are available through the bank’s call center 24 hours a day, seven days a week.

How to use a 3-month CD in a CD ladder

With a CD ladder, you’ll open several short- and long-term CDs with staggered maturity dates. The long-term CDs should allow you to take advantage of higher CD interest rates, while the shorter-term CDs let you either access the money sooner or reinvest into a new CD if you can find higher interest rates.

A 3-month CD may fit into your ladder as the shortest rung. Once it matures, you can either use the funds or reinvest into a longer-term CD with a higher interest rate.

Alternatives to 3-month CDs

This type of CD isn’t right for everyone. Check out these alternatives to 3-month CDs:

Savings account or money market account

You may be able to score a higher interest rate with a money market account or a high-yield online savings account, while still maintaining access to your money.

“Money market and high-yield savings accounts typically offer higher interest rates than standard savings accounts, but normally require higher balances and may have restrictions or conditions to accessing one’s money,” says Robert Drury, executive director of the Association of Christian Financial Advisors.

Consider a CD with a longer term

CDs give savers a little bit of a yield boost over savings accounts in exchange for a long-term deposit. The longer savers agree to leave their money in the bank, the higher the yield.

Investing in a 1-year CD, for example, would require you to tie up your funds for a full 12 months. But it’s possible to earn a yield as high as 3 percent APY (for CDs available nationwide).

“Money market and high-yield savings accounts typically offer higher interest rates than standard savings accounts, but normally require higher balances and may have restrictions or conditions to accessing one’s money,” says Robert Drury, executive director of the Association of Christian Financial Advisors.

“CDs normally offer higher interest than these but unconditionally obligate one’s money for a specified term,” he says.

Learn more about other CD terms:

To recap, see the best 3-month CD rates below:

Institution APY Minimum deposit
Spectrum Credit Union 1.85% $500
MyBankingDirect 1.65% $2,500
Advancial Federal Credit Union 1.62% $25,000
Bethpage Federal Credit Union 1.60% $50
USALLIANCE Financial 1.60% $500