The longer the CD term, the higher the yield.

Generally, that’s how CDs work. But sometimes a five-year CD is too long of a term. In those cases, a three-year CD might be a happy medium between the two terms.

And these days, a three-year CD and a longer-term CD might have similar annual percentage yields (APYs).

Three-year CDs usually offer a higher yield than what savers can get from money market accounts, under the condition that you leave the funds in the CD for three years. Withdrawing the money before then will usually result in a penalty.

Of course, if the Federal Reserve were to raise rates multiple times that could cause money market accounts to increase higher than current three-year CD yields. But the Fed isn’t expected to change rates in 2020.

Summary of best 3-year CD rates for January 2020

Financial Institution APY Minimum Deposit
Garden Savings Federal Credit Union 2.53% $500
XCEL Federal Credit Union 2.50% $500
Credit Union of the Rockies 2.50%** $1,000
MAC Federal Credit Union 2.50% $1,000
Greenwood Credit Union 2.40% $1,000
Connexus Credit Union 2.31% $5,000

** Promotional CD

Today’s top nationally available 3-year CDs pay 2.4 percent APY or higher. That’s just as high as some of the best 4-year CD rates. A mid-term CD that matures in three years could be a great place to invest for mid-term financial obligations, like a down payment on a future auto loan.

Include online banks, credit unions and other banks in your search to find the best three-year CD APYs.

While many savers tend to stick with the same bank that provides their checking account, that can be a mistake, especially at a large national bank, where deposit rates tend to fall well short of what smaller institutions offer.

Compare: Best 3-year CD rates

Best Rate: Garden Savings Federal Credit Union – 2.53% APY, $500 minimum deposit

There’s a reason why the 3-year CD at Garden Savings Federal Credit Union ranks as one of the best nationally available accounts: the yield is higher than what’s available at most banks, especially since the Federal Reserve cut interest rates several times in 2019.

The credit union was originally founded in 1968 to serve the employees of AT&T Bell Laboratories. The institution currently serves more than 25,000 members, including customers near their headquarters in Parsippany, New Jersey. Membership is open to employees of select companies, local residents and others who worship and live in the surrounding communities. For others, the easiest way to join is through the American Consumer Council.

High Rate: XCEL Federal Credit Union – 2.50% APY, $500 minimum deposit

Members of XCEL Federal Credit Union have access to one of the highest mid-term CD yields available nationwide. Most standard CD terms are available and some promotional deals are also offered.

The credit union was established in 1964. The institution is based in Bloomfield, New Jersey. Joining the American Consumer Council is one of the easiest ways to qualify for membership.

High Rate: Credit Union of the Rockies – 2.50% APY, $1,000 minimum deposit

Credit Union of the Rockies offers certificates across most standard terms. The minimum deposit to open an account is relatively low ($1,000) and the accounts can be easily opened online.

Founded in 1937, Credit Union of the Rockies is based in Golden Colorado. Membership is open to anyone who joins the Consumers United Association for a $5 membership fee.

High Rate: MAC Federal Credit Union – 2.50% APY, $1,000 minimum deposit

The credit union was originally founded as Tanana Valley Federal Credit Union and chartered in 1952. MAC Federal Credit Union is based in Fairbanks, Alaska. There are many options for anyone interested in becoming a member, including joining an association like the Polar Bear Chapter of the Association of the United States Army.

Share certificates are available as IRAs. Money market and kids accounts are also available.

High Rate: Greenwood Credit Union – 2.40% 2.50% APY, $1,000 minimum deposit

Greenwood Credit Union offers a 3-year share certificate paying a competitive yield. Other products available to members include a money market savings account and several different checking account options.

The credit union was founded in 1948 and is based in Warwick, Rhode Island. Membership is open to anyone who opens a Share Account and deposits at least $5. Currently, there are more than 50,000 members.

High Rate: Connexus Credit Union – 2.31% APY, $5,000 minimum deposit

Connexus Credit Union has members in all 50 states. Connexus is based in Wausau, Wisconsin and offers a competitive yield on its three-year share certificate.

You need to be a member of Connexus to open an account. But even if you aren’t an employee or retiree of a certain company and don’t reside in a certain area, you can become a member of the Connexus Association with a one-time, $5 donation.

3-year CD yields offered by popular banks – January 2020

High Rate: Citizens Access – 2.15% APY, $5,000 minimum deposit

Citizens Access launched in July 2018. It made its debut with a savings account and CDs. And then in November 2019, it added an 11-month liquid CD and stopped offering the six and 18-month CDs.

The bank offers a competitive yield on its CDs and savings account. All of its products require a $5,000 minimum deposit. Interest payment options are flexible, meaning customers can have interest credited to the principal balance of the CD or transferred to another account, without penalty, before the CD matures.

Citizens Access is a direct bank offering savings products and the new online division of Citizens Bank.

High Rate: Comenity Direct – 2.10% APY, $1,500 minimum deposit

Among popular online banks, Comenity Direct offers one of the most competitive yields. And savers don’t have to pony up too much cash to qualify. The minimum deposit for its savings account is even lower ($100). CD terms range from one year to five years. As in most cases, at Comenity Direct, the longer-term CDs pay higher APYs.

Comenity Direct launched in April 2019. It’s an online-only bank that offers high-yield savings products and CDs. It’s a division of Comenity Capital Bank, which is part of a brand that has been around for 30 years.

High Rate: Synchrony Bank – 2.10% 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.

High Rate: Barclays Bank – 2.00% 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.

High Rate: PurePoint Financial – 2.00% APY, $10,000 minimum deposit

PurePoint Financial is a division of MUFG Union Bank. It offers nine regular CD terms and three terms for its no-penalty CDs. It also offers an online savings account with a competitive yield.

All of PurePoint Financial’s products have one thing in common: they require a $10,000 minimum deposit to open. So these accounts aren’t a good fit if you’re not ready to deposit that much.

What is a 3-year CD?

A 3-year CD is a deposit account in which you agree to keep the money in the account for three years. Yields can be higher than the national average earned from money market accounts and savings accounts.

Bankrate’s calculator can help you determine how much interest you could earn when your CD matures. Your principal is protected, so you don’t have to worry about stock market ups and downs. Plus, with a CD, your interest rate is locked in, so you also don’t have to worry about your yield decreasing.

Who should open a 3-year CD?

Opening a 3-year CD might make sense for people who don’t need access to their money for at least three years. As a result, these accounts are ideal for mid-term goals, like setting aside money for a car down payment. Getting a 3-year CD could also be a good idea if you’re planning to build a CD ladder.

Search for the best 3-year CD rates online and compare your options. Don’t just stick with your current bank or credit union. If you’re looking for a higher yield, consider some of the lesser-known institutions willing to offer good interest rates to attract depositors.

Can you withdraw cash early?

When putting money into CDs, it’s important to read the fine print. After all, CDs come with restrictions dictating when you can withdraw your money.

In most cases, you’re not allowed to get your cash before the CD matures. With a 3-year CD, that means keeping your money in the account for three years. If you do withdraw the money, there’s a good chance you’ll have to pay a penalty.

The penalty depends on the financial institution, and can vary widely. A penalty might be expressed as a certain number of months’ worth of interest or as a percentage of the principal. In some cases, that percentage of principal might be based on the entire amount in the CD, or it might only apply to the amount you withdraw early.

If you’re unsure that you can keep your money in the account for three years, consider other options. There are no-penalty CDs that won’t charge you for taking the money out early. However, no-penalty CDs often come with lower interest rates than those on conventional CDs.

Additionally, you can choose a 6-month or 1-year CD, instead of getting a 3-year CD. You’ll be able to access your money earlier, but you’ll earn a lower yield.

3-year CD rate vs. other CD terms

When choosing a CD term, it’s important to understand the implications of your decision. In general, the longer you’re willing to tie up your money, the higher your yield. So, a 3-year CD rate often comes with a higher interest rate than CDs with shorter terms.

Also, because there are liquidity restrictions on a CD, you’ll often see a higher yield on a CD than what you’d get with a traditional savings account or money market account. Both of these accounts allow you easier access to your money than a CD — and might not have the same yield.

On the other hand, while a 3-year CD can feature a higher interest rate than shorter-term CDs and liquid savings accounts, it often has a lower yield than what you’d see if you were willing to tie your money up for a longer term.

For example, you might get a higher yield on a 5-year CD than what’s available for a 3-year CD. The same is true of a 6-year, 7-year or 10-year CD.

Carefully consider your needs before putting your money in a CD. Be realistic about when you might need the money, based on your short- and medium-term financial goals. When you have an idea of your true needs, you’re more likely to make a better decision about the type of account that’s best for your money.

Financial Institution 1-year APY 3-year APY 5-year APY Minimum deposit
Garden Savings Federal Credit Union 2.02% 2.53% 2.53% $500
XCEL Federal Credit Union 2.00% 2.50% 2.50% $500
Credit Union of the Rockies 0.40% 2.50% 2.70% $500, $1,000, $1,000
MAC Federal Credit Union 2.10% 2.50% N/A $1,000
Greenwood Credit Union 1.80% 2.40% 2.50% $1,000
Connexus Credit Union 2.01% 2.31% 2.41% $5,000

Bankrate’s best 3-year CD rates for January 2020

  • Garden Savings Federal Credit Union: 2.53% APY
  • XCEL Federal Credit Union: 2.50% APY
  • Credit Union of the Rockies: 2.50% APY**
  • MAC Federal Credit Union: 2.50% APY
  • Greenwood Credit Union: 2.40% APY
  • Connexus Credit Union: 2.31% APY

** Promotional CD

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