Best 3-Year CD Rates for September 2024 (2024)

Putting your money in a savings or money market account offers much more flexibility than a CD, with no risk of an early withdrawal penalty. You'll also be able to add and withdraw funds more or less as you like. The trade-off is that interest rates on liquid accounts can change at any time. So if rates are declining, the annual percentage yield on your high-yield savings or money market account will almost certainly go down, while any rate on a CD will hold.

In addition, liquid accounts don't always offer as high a return as CDs. By committing your funds to a CD term, you can usually boost your earnings, and sometimes quite substantially.

If you know you won't need your funds for three years, you could consider investing in stocks instead. The upside is that you could potentially earn quite a bit more in the stock market than with a fixed 3-year CD rate.

But beware the notable downside, which is that you can always lose money in the stock market, including scenarios where you lose most of your investment. Stocks are an excellent investment over long periods of time. But for a time horizon of just three years, there is no guarantee your investment will grow, or even retain its value.

Frequently Asked Questions

• What Is a 3-year CD?

  Certificates of deposit, or CDs, are savings products that pay the customer interest in exchange for agreeing to leave their deposit with the bank or credit union for a fixed period of time.

  Most depository institutions offer a variety of CDs with different maturity dates; typically, the shortest ones will last three months while the longest ones range up to ten years, though five years is the longest term at most institutions. In theory, the longer the duration of the deposit, the higher the rate the institution is willing to offer.

  CDs are considered safe, conservative investments because their rate of return is pre-determined and guaranteed to remain locked for the full term. In addition, virtually all CDs are offered by FDIC-insured banks, or by credit unions insured through the NCUA. As a result, deposits of up to $250,000 are protected, even if the financial institution faces liquidity problems.

  Most CDs don't allow you to add funds after the initial deposit, making it a less favorable savings vehicle for those who wish to make periodic contributions. But CD accounts are well-suited for parking cash you won't need for a while and that you want invested reliably and essentially risk-free.

  Usually, CDs are set to automatically renew at maturity. But you'll be notified of the maturity date in advance and given the opportunity to tell the bank you'd like to do something different with the money, such as withdraw it or transfer it to another institution. Fortunately, if you miss the maturity date by a few days, most banks and credit unions afford a grace period of a few days during which you can still withdraw your funds without penalty.

  It's important to note that CD rates can vary significantly from one bank or credit union to another. Indeed, the top certificate rates nationwide are typically three and five times the industry average for a CD of the same duration. So it's critical you shop around.

• When Is a 3-Year CD a Good Idea?

  The main reason to consider a CD that's three years in length is because it fits your personal timeline. Maybe you know you can lock up the funds for that number of years because it's money for a student going to college further down the road than that, or its surplus savings you know you won't need to touch for a long time because you have other savings you can tap in the meantime.

  Another reason to buy a 3-year CD is if you are building a 5-year CD ladder, which involves buying an array of different CD terms, in yearly durations of up to five years, so that you always have on CD maturing every year. To create a 5-year CD ladder, you'll need one 3-year CD for the group.

• How Are CD Rates Determined?

  The rate paid on CDs is determined by each bank and credit union and involves their particular need for deposits and the time horizon of their deposit strategy. However, the actions of the Federal Reserve loom large in the equation. The federal funds rate, which is determined by the central bank's Federal Open Market Committee, influences how much banks have to pay in order to borrow from each other. That, in turn, influences how much individual depository institutions are willing to pay consumers for their deposit funds.

  When the Fed's rate is low, banks will offer lower yields on interest-bearing accounts. When interest rates go up, however, they tend to pay higher rates in order to attract customers.

• What if I Need to Withdraw My Money Early?

  To provide a disincentive to CD holders from taking their money out of the account before maturity, all banks and credit unions have an early withdrawal penalty policy. Withdrawing early will cause you to forfeit some of your interest earnings—three to 12 months' worth of interest is common—but the penalties vary widely by institution, with some harsh enough to eat into your original principal.

  Some banks and credit unions offer penalty-free CDs, although they typically offer a lower rate and may be "all or nothing" propositions. If that's the case, you would need to pull out your entire balance and close the account if you want to withdraw early. Because of their lower rates, no penalty-free options make the cut in our ranking of the top-paying nationally available 3-years CDs.

• How Can I Join a Credit Union on the List?

  Unlike banks, credit unions are created to serve the needs of a specific community. In many cases, that means restricting membership to the residents of a certain area or to the employees of a particular company or group of companies.

  However, some credit unions make it fairly easy for non-local individuals to join. For example, the institution may allow you to attain membership by making a donation to its foundation or a nonprofit in its community, or by joining a financial literacy or consumer protection organization like the American Consumer Council. The process of joining is also typically very easy, and it is often indistinguishable from the process of opening an account with a new bank.

  Being open to credit union membership is a smart move for CD shoppers, as many of the best nationwide rates are offered by credit unions.

• Financial Institutions We Review

  We researched and reviewed over 250 banks, credit unions, and financial institutions to find the best CD rates you see above on this list. While we write individual reviews for most, we do not always write reviews for those we would not recommend. Below are the banks, credit unions, and financial institutions we researched along with links to individual company reviews to help you learn more before making a decision:

  1st Source Bank, 5star Bank, ableBanking, Abound Credit Union, Achieva Credit Union, Affinity Federal Credit Union, Affinity Plus Federal Credit Union, Air Force Federal Credit Union, Alabama Credit Union, Allegacy Federal Credit Union, Alliant Credit Union,Ally Bank, Amerant Bank, American 1 Credit Union, American Express, American Heritage Credit Union, Andrews Federal Credit Union, Apple Federal Credit Union, Banco do Brasil Americas, Banesco USA, Bank of Baroda, Bank5 Connect, Bank7, Texas Capital Bank, bankESB (Easthampton Savings Bank), BankUnitedDirect,Barclays, BBVA Bank, Bellco Credit Union, Blue Federal Credit Union,BMO, BMO Alto,BrioDirect, Cadets Federal Credit Union, California Coast Credit Union,Capital One, Capitol Federal Savings Bank, CD Bank, CFG Bank,Chase Bank, Chevron Federal Credit Union, CIBC (Agility Banking),CIT Bank,Citibank, Citizens Access, Citizens Trust Bank, Colorado Federal Savings Bank,Bread Savings, Communitywide Federal Credit Union, ConnectOne Bank, Connexus Credit Union, Consumers Credit Union, Corporate America Federal Credit Union (CAFCU), Credit Union of Denver, Credit Union of the Rockies, Digital, Federal Credit Union,Discover Bank, DollarSavingsDirect, Dover Federal Credit Union, Dow Credit Union, Evergreen Bank Group, RocklandTrust Bank, Elements Financial, EmigrantDirect.com, Liberty Federal Credit Union,Fidelity Investments, Financial Partners Credit Union, Financial Resources Federal Credit Union, First Financial Credit Union, First Financial Northwest Bank, First Internet Bank, First National Bank of America, First Technology Federal Credit Union, Fort Bragg Federal Credit Union, Garden Savings Federal Credit Union, Georgia Banking Company, Georgia's Own Credit Union, GreenState Credit Union, Greenwood Credit Union, Grow Financial Federal Credit Union, GTE Financial, Gulf Coast Bank & Trust Company, Hanscom Federal Credit Union, Heritage Bank, Hiway Federal Credit Union, Home Loan Investment Bank, Home Savings Bank, Hope Credit Union, HSBC Direct, Hughes Federal Credit Union, Hyperion Bank, Ideal Credit Union, iGObanking, Interior Federal Credit Union, Justice Federal Credit Union, Kinecta Federal Credit Union, KS State Bank, La Capitol Federal Credit Union, Lafayette Federal Credit Union, Lake Michigan Credit Union, Langley Federal Credit Union, Latino Community Credit Union, Limelight Bank, Live Oak Bank, Luther Burbank Savings, MYSB Direct, MAC Federal Credit Union, Main Street Bank, MainStreet Bank, MapleMark Bank, Marcus by Goldman Sachs, Market USA Federal Credit Union, Matadors Community Credit Union, MECU Credit Union, Merrick Bank, Michigan State University Federal Credit Union, Mills42 Federal Credit Union, Mountain America Credit Union, MTC Federal Credit Union, MutualOne Bank, My Banking Direct, My eBanc, My Savings Direct, NASA Federal Credit Union, Nationwide byAxos Bank,Navy Federal Credit Union, nbkc, NexBank, North Country Savings Bank, Northern Bank Direct, Northfield Bank, Northpointe Bank, Nuvision Federal Credit Union, Oklahoma Central Credit Union, One American Bank, OneUnited Bank, Pacific National Bank, Paramount Bank, PARDA Federal Credit Union, Partner Colorado Credit Union, Patelco Credit Union, Pen Air Federal Credit Union,PenFed Credit Union, People's Credit Union, First Service Credit Union, Pinnacle Federal Credit Union,Popular Direct, Premier America Credit Union, Presidential Bank, FSB, Prime Alliance Bank, PSECU (Pennsylvania State Employees Credit Union), Quontic Bank, Quorum Federal Credit Union, Rising Bank, Merrimack Valley Credit Union, Salal Credit Union,Sallie Mae Bank, Santa Clara County Federal Credit Union, Signature Federal Credit Union, Spectrum Credit Union, SRP Federal Credit Union, State Bank of India Chicago, State Bank of India New York, State Bank of Texas, State Department Federal Credit Union, Summit Credit Union, Sun East Federal Credit Union, Superior Choice Credit Union,Synchrony Bank, TAB Bank, Teachers Federal Credit Union, Technology Credit Union, The Federal Savings Bank,,EverBank, TotalBank, Transportation Federal Credit Union, TruStone Financial Credit Union, UNIFY Financial Credit Union, Expedition Credit Union, United States Senate Federal Credit Union, United Texas Bank, University Federal Credit Union,US Bank, USAlliance Financial, USPS Federal Credit Union, Velocity Credit Union, VeraBank,Vio Bank, Virtual Bank, WebBank, Webster Bank,Wells Fargo, Western Vista Credit Union, Wings Financial Credit Union, XCEL Federal Credit Union, BankPurely, Umbrella Bank, giantbank.com, CapEd Credit Union, Zeal Credit Union, Finworth, Coastal1 Credit Union, Service Credit Union, National Cooperative Bank, Premier Members Credit Union,Bank of America, Flagstar Bank, 1st MidAmerica Credit Union, INOVA Federal Credit Union, Genisys Credit Union, Ivy Bank, Heartland Credit Union, Luana Savings Bank, Spectra Credit Union, Workers Credit Union, Credit Human, EFCU Financial, Poppy Bank, Credit One Bank, Vibrant Credit Union, CFBank, Department of Commerce Federal Credit Union, Seattle Bank, Crescent Bank, Pima Federal Credit Union, Cross River Bank,USAA, Great River Federal Credit Union, Brilliant Bank, Merchants Bank of Indiana,LendingClub, Chartway Credit Union, First Central Savings Bank, AgFed Credit Union, North American Savings Bank, Pelican State Credit Union, First Community Credit Union, Bask Bank, Skyla Credit Union, SkyOne Federal Credit Union, 3Rivers Federal Credit Union, Utah First Credit Union, Pasadena Federal Credit Union, Magnifi Financial, AloStar, Primis Bank, Farmers Insurance Federal Credit Union, Tampa Bay Federal Credit Union, Veridian Credit Union, Republic Bank, Salem Five Direct, All In Credit Union, Bethpage Federal Credit Union, Self-Help Federal Credit Union, Forbright Bank, Jovia Financial Credit Union, Sun Canyon Bank, Fortera Credit Union, Partners 1st Federal Credit Union, SouthEast Bank, American Bank, Newtek Bank, CBC Federal Credit Union,Vanguard, All America Bank, Amalgamated Bank, Citizens State Bank, AmBoy Direct, Republic Bank of Chicago, Oklahoma Community Credit Union, BluPeak Credit Union, Valley Direct, Bayer Heritage Federal Credit Union, First Harvest Credit Union, Orion Federal Credit Union, Wellby Financial, FedChoice Federal Credit Union, CoVantage Credit Union, Choice First Bank, Sandia Area Federal Credit Union, OMB Bank, Minnequa Works Credit Union, Securityplus Federal Credit Union, Bank of South Texas, T Bank