Use this free CD calculator to find out how much interest is earned on a CD.
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.
|Financial Institution||APY||Minimum Deposit|
|America First Credit Union||2.20%||$500|
|First Tech Federal Credit Union||2.15%||$500|
|SchoolsFirst Federal Credit Union||2.15%||$500|
|Navy Federal Credit Union||2.15%||$1,000|
|Sallie Mae Bank||2.15%||$2,500|
Note: The APYs (Annual Percentage Yield) shown are as of Feb. 1, 2020. The rates for some products may vary by region.
Today’s top nationally available 3-year CDs pay 2.25 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.
Amerant Bank has 26 banking centers -- 18 in South Florida and eight in Houston. Though the Amerant Bank CD yields mentioned here aren’t available in Florida and Texas.
Amerant does require a $10,000 minimum balance to earn this APY on a CD. So this may not be the right CD for you if you’re just starting to save.
Amerant Bank CDs offer a competitive yield on all of its CD terms. The CDs do have an early withdrawal penalty of 180 days of interest on the amount you withdraw.
America First Credit Union was founded in 1939. It has 131 locations and is the ninth largest credit union, based on assets, in the U.S. It’s also the sixth largest based on membership with more than a million members.
Bank5 Connect is the online-only division of BankFive. Bank5 Connect has been around since 2013.
Bank5 Connect offers CDs, a savings account and a checking account.
First Tech Federal Credit Union was founded in 1952 by a few Hewlett-Packard and Tektronix employees. You can join if you work for a company on its partner list or work for the state of Oregon, or work or live in Lane County. You can also become a member through the Computer History Museum or Financial Fitness Association.
SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. The credit union, created by school employees, has 50 branches.
SchoolsFirst serves the education community in California. Certain school employees, certain retired school employees and immediate family members of existing SchoolsFirst Federal Credit Union are eligible to join.
The credit union has low minimum balances and CD terms from as short as 30 days to as long as five years. The more money you put in your CD, the higher the APY. CDs at SchoolsFirst have four balance tiers: $500, $20,000, $50,000 or $100,000. Each tier gives you an extra five basis points added to your APY.
Navy Federal Credit Union has more than 8.8 million members and is the world’s largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.
Sallie Mae does more than just provide private student loans.
Sallie Mae Bank offers CDs, a savings account, money market account and credit cards. It offers a competitive yield on all of these deposit products.
Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA. Marcus offers a variety of CDs, three no-penalty CD terms and a savings account. Marcus also offers lending options with its debt consolidation loans, home improvement loans and personal loans.
The bank recently launched the Marcus app for mobile banking. It’s available on the App Store for iPhones and is scheduled to be available on Google Play this spring.
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.
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.
American Express Bank has been offering personal savings to the general public for more than 10 years. American Express features low minimum balance requirements and competitive APYs.
American Express is well-known for its credit cards and it’s also one of the leaders in the online banking space.
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 to get the highest APY.
The bank offers a variety of 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).
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.
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.
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.
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.
Here are the best 3-year CD rates for February 2020:
Use this free CD calculator to find out how much interest is earned on a CD.
Find out how to maximize returns on your CD with CD laddering.
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