3 Year CD Rates
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What are the top 3-year CD rates today? See if they are worth the commitment.
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- Lafayette Federal Credit Union:
4.58% APY - MIDFLORIDA Credit Union:
4.50% APY - mph.bank:
4.38% APY - Popular Direct:
4.25% APY - America First Credit Union:
4.15% APY - All In Credit Union:
4.07% APY - Freedom Credit Union (PA):
4.07% APY - Eastman Credit Union:
4.00% APY - Kemba Credit Union:
4.00% APY - Cyprus Credit Union:
4.00% APY
Are you okay with locking your money away for three years in exchange for a good rate? If so, a 3-year CD might just be the perfect account for you.
But, remember that it's not only about finding the highest APY. Continue on to know what other factors you should consider and whether it is actually worth it.
To get you started, check out the best 3-year CDs available today.
36-Month Callable CD - 4.38% APY
- No fees
- $1 minimum deposit
- 24/7 online access to funds
- FDIC insured
- Minimum Deposit to Open: $1
Lafayette Federal Credit Union 3-Year Jumbo CD - 4.58% APY
- Minimum Deposit to Open: $100,000
What is a 3-Year CD?
A 3-year or 36-month certificate of deposit (CD) is a long-term account with a fixed rate and a fixed term of three years. You're usually not supposed to withdraw the CD until it matures. Otherwise, you will be charged penalties.
Note that not all banks offer this term, but long-term CDs like this usually come with relatively high APY.
Withdrawing your 3-year CD before maturity often incurs early withdrawal penalty fees. These charges may cost from a few to several months of interest. Note that you usually cannot withdraw portions of your CD. You need to take out the whole amount, ultimately closing your 3-year CD.
Who Is a 3-Year CD Best For?
3-year CDs are good for folks who don't mind locking in their money for a couple of years. CDs give you a fixed rate over its term. So these work great for people who worry about interest rate changes.
But remember that withdrawing your CD early will incur penalties. If you need easy access to your funds, it may be better to consider other options like a high-yield savings account.
Typically, 3-year CD rates will go up if the Federal Funds rate recently increased. There is no guarantee that CD rates will go up or down, but following the movement of the Fed Funds rate is a good way to estimate it.
How much interest does 3-year CDs earn?
Say you have a 3-year CD with a $5,000 deposit and a 4.5% APY. You will earn around $706 at maturity. But if you have a higher deposit and a better APY, you can earn more on your CD.
Here's a table to show you what you can earn with various APYs and deposit amounts.
| Rate | $1,000 | $2,000 | $5,000 | $10,000 |
|---|---|---|---|---|
| 0.00% | $1,000 | $2,000 | $5,000 | $10,000 |
| 0.50% | $1,015 | $2,030 | $5,075 | $10,151 |
| 1.00% | $1,030 | $2,061 | $5,152 | $10,303 |
| 1.50% | $1,046 | $2,091 | $5,228 | $10,457 |
| 2.00% | $1,061 | $2,122 | $5,306 | $10,612 |
| 2.50% | $1,077 | $2,154 | $5,384 | $10,769 |
| 3.00% | $1,093 | $2,185 | $5,464 | $10,927 |
| 3.50% | $1,109 | $2,217 | $5,544 | $11,087 |
| 4.00% | $1,125 | $2,250 | $5,624 | $11,249 |
| 4.50% | $1,141 | $2,282 | $5,706 | $11,412 |
| 5.00% | $1,158 | $2,315 | $5,788 | $11,576 |
| 5.50% | $1,174 | $2,348 | $5,871 | $11,742 |
To know how much you can earn on other CD terms and rates compared to 3-year CDs, use this convenient CD calculator.
Is a 3-Year CD Worth It?
If you're on the hunt for a passive investment option, a 3-year CD may be something you can look into. Getting one can preserve and grow your savings for the next three years. But, you must be confident that you won't need your funds any time soon.
To maximize your 3-year CD, you can't take your money out until it matures as you may lose your earnings to early withdrawal penalties.
It all comes down to whether a 3-year CD aligns with your financial goals. For instance, it could be a smart choice if you're planning for your retirement. But, you're probably better off with a different investment if you're saving up for a quick vacation or building your emergency fund.
The CD term you choose will highly depend on your financial goals.
Tip: A smart goal is a measurable goal. Estimate your goal's timeline and choose a CD term based on that. CD terms range from 1 month to 10 years, so you have many options to match your goals.
Pros and Cons of a 3-year CD
If the 3-year term works for you, take some time to consider the pros and cons of a 3-year CD.
Pros
- Usually higher rates compared to savings accounts and short-term CDs
- Federally insured up to $250,000 by the FDIC or the NCUA
- Fixed, competitive rate throughout CD term
Cons
- Usually can't add or withdraw money until the CD matures
- Early withdrawal penalties can be costly
- Potentially miss out on better APY and investments
- 3-year CD may not grow fast enough to keep up with inflation
Yes, 3-year CDs are a safe and stable passive investment option. Not only are your interest earnings guaranteed, most CDs are also federally insured up to $250,000 which means the FDIC or NCUA will cover your deposits in case your bank or credit union fails.
Choosing the Best 3-year CD
It's best to cover all your bases for a 3-year-long investment. Here are the major points to consider when shopping for 3-year CDs.
- APY
Look for the highest APY available on a 3-year CD as much as possible. It's best to check online banks and credit unions as they usually offer high rates on their CDs. - Minimum Deposit Requirement
A 3-year CD may or may not have a minimum deposit requirement but the typical range is from $500 to over $1000. Make sure to check the deposit requirement if you have a budget to follow.If the amount isn't an issue, check out 3-year jumbo CDs—these often give better rates than standard CDs due to their higher minimum deposit.
- Early Withdrawal Penalties
You must try your best to keep your money in the 3-year CD until it matures for maximum earnings. Thus, it would be best to look for one with minimal penalties in case of emergencies. You can also check out no-penalty CDs to avoid them entirely. - Other Features
Some 3-year CDs have special features that may benefit you. For example, a "bump-up" increases your rate during the term and an "add-on" lets you deposit more into your CD. These can be rare but are great to have depending on the situation.
How to Open an 3-year CD
Opening a 3-year CD can be straightforward. Here's a step-by-step guide to help you:
- Determine where to open the CD.
Read the CD's disclosures to see if is exclusive to online platforms, physical branches, or both. - Complete the application form and review the terms.
Fill out the application form and submit the required documents. Make sure you review the terms and conditions for important details like interest payments, maturity date, and early withdrawal penalties. - Submit and fund your CD.
You can submit your application after agreeing to the terms. Then you can fund your CD through various methods, such as online transfers, wires, or check deposits.
If you're not sure how to open a CD with a specific bank or credit union, it is best to reach out to a representative to help you through the process.
Alternatives to 3-Year CD
If you're still on the fence about 3-year CDs, here are some alternatives that you can check out.
Better liquidity with High-Yield Savings Account
If tying up your money worries you, high-yield savings accounts may give you the flexibility you need. Luckily, many online high-yield savings accounts out there offer competitive rates.
- Western Alliance Bank:
High-Yield Savings Premier - 4.46% APY - Discover® Online Savings:
$200 Cash Bonus - CIT Bank Platinum Savings:
4.55% APY - Mission Valley Bank:
High Yield Savings Account - 4.43% APY - DR Bank:
High-Yield Savings Account - 4.40% APY - Paprika Capital Bank:
High-Yield Savings Account - 4.36% APY - Dayspring Bank:
High-Yield Savings Account - 4.30% APY - The State Exchange Bank:
High Yield Savings Account - 4.25% APY - First Community Bank:
High-Yield Savings Account - 4.22% APY - CFBank National Association:
High-Yield Savings Account - 4.20% APY
Secure returns with Treasury Securities
Treasury bills, notes, and bonds can have competitive, fixed rates for a 3-year period too. These government-backed securities are usually safe and stable, even when interest rates are constantly changing.
Higher yields with Corporate Bonds
Corporate bonds typically pay higher interest than government bonds, but there may be a bit more risk involved. Be sure to research the company and check its credit ratings before investing in its bonds.
Higher returns with Blue Chip Stocks
Blue chip stocks belong to well-established companies with a history of strong growth and attractive dividends. While there's more risk involved in the stock market, withdrawing your investments is a bit easier (with some fees).
Other CD Terms
If a 3-year CD doesn't suit your plans, there are other terms available, ranging from 1 month up to 10 years. Some may even offer better rates and perks than a standard 3-year CD. So, do research to find one that fits your situation best.
Sometimes banks and credit unions offer promotional CDs with "odd" terms. These are CDs with non-standard terms like 13-months, 11-months, 5-months, etc. They also usually have very competitive rates.
- SkyOne Federal Credit Union:
15-Month High-Yield CD - 3.90% APY - Blue Federal Credit Union:
15-Month High-Yield CD - 3.75% APY - CIT Bank:
13 Month CD - 3.50% APY - Consumers Credit Union:
17-Month Super Jumbo CD - 4.35% APY - Sallie Mae Bank:
14-Month No Penalty CD - 3.95% APY - Ponce Bank:
13-Month High-Yield CD - 1.31% APY - Citizens Bank:
14-Month CD - 2.75% APY - Associated Bank:
13-Month CD - 3.00% APY - Florida Credit Union:
13-Month CD - 4.54% APY - Vibrant Credit Union:
13-Month CD - 4.50% APY
3-year CD FAQs
How do I use a 3-year CD in a CD Ladder?
If you're building a CD ladder, the 3-year CD should be one of the long-term CDs in your ladder. CD laddering is a strategy where you break up your money into multiple CDs.
The idea is to have CDs mature in intervals. This way, you get the flexibility to use or reinvest your money whenever it becomes available.
To visualize how much you can earn with a 3-year CD ladder, here's a CD ladder calculator you can use.
When is the best time to get a 3-year CD?
The best time to get a 3-year CD is usually when interest rates are at their highest, just before when interest rates are expected to decrease. Follow the Fed Funds rate changes to time your CD investment.
Is a 3-year CD better than a savings account?
If you need your money in the next 3 years, choose a savings account. If not, consider a 3-year CD to lock in good rates. Both are FDIC-insured, as long as your bank or credit union is an FDIC or NCUA member.
Bottom Line
Ultimately, whether a 3-year CD is worth the commitment or not depends on your financial plans. A lot could happen in between so making sure you have a specific and measurable goal is best when getting any long-term investment.
Take some time to think and do your research before you get a 3-year CD.
Write to Rue Atanacio at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
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