If you’ve got some money saved up, it’s usually not that hard to part with it for three months, especially if you’ll get a better return than you would with a savings account. Three-month CDs often have higher APYs than traditional savings products, and the rates don’t change like they can with savings accounts. Sure, you’ll find better rates on CDs with longer terms, but if you don’t want to lock up your money for too long, a 3-month CD is a relatively stress-free option.
Every week we survey more than 150 banks and credit unions to find the best rates on 3-month CDs. (We also consider 2- and 4-month CDs.) Our rankings are based on the highest annual percentage yields (APY), but in the case of a tie, we favor the CD with the shortest term, then with the lowest minimum deposit required to earn the APY, and then with the smallest penalties for early withdrawal. All accounts are available nationwide and are insured by either the FDIC or NCUA.
We re-evaluate the products on this list every week, but update CD rates daily if they change. Here are the top 3-month CDs as of Feb. 19, 2020.
Best 3-Month CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|TotalDirectBank||1.75%||$25,000||1 month of interest|
|Chevron Federal Credit Union||1.65%||$500||3 months of interest|
|Spectrum Federal Credit Union||1.65%||$500||3 months of interest|
|My Banking Direct||1.65%||$2,500||1 month of interest|
|BrioDirect||1.55%||$500||3 months of interest|
|Bank of Baroda (3-4 months)||1.55%||$1,000||Forfeit 1% of APR earned|
|Luther Burbank Savings||1.53%||$10,000||3 months of interest|
|Virtual Bank||1.51%||$10,000||All earned interest|
|Popular Direct||1.50%||$10,000||3 months of interest|
|First Internet Bank||1.46%||$1,000||3 months of interest|
TotalDirectBank offers a competitive 1.75% APY, which tops our list. However, you’ll need a $25,000 minimum deposit to open the account. The less stringent early withdrawal penalty of just one month worth of interest takes away some of the risk.
TotalDirectBank is the fully online banking arm of City National Bank of Florida, which was founded over 70 years ago. Anyone in the U.S. (except those in Florida, California, Puerto Rico, American Samoa, Guam, Northern Mariana Islands and U.S. Virgin Islands) can open a money market or CD account. CD terms range from three months to five years.
Chevron Federal Credit Union gets the second spot with an APY of 1.65% and a minimum deposit of just $500.
With more than 100,000 members worldwide, Chevron Federal has been operating since 1935. It has branch locations in five states, but anyone can become a member by joining an affiliated organization with membership fees as low as $15. You’ll also have to get a savings account with Chevron Federal, keeping at least $25 in it.
In addition to CDs with terms as long as five years, Chevron Federal offers many financial products, including savings and checking accounts, IRAs, loans, and credit cards.
This CD matches Chevron Federal with identical terms. It also has a 1.65% APY and a minimum deposit of $500, and the early withdrawal penalty is the same: three months’ worth of interest. It’s no surprise, really, since Spectrum Credit Union merged with Chevron Federal in 2012. Spectrum does, however, operate independently in areas not served by Chevron, which is why they are included on our list separately.
Spectrum was originally founded as Bechtel Employees Federal Credit Union. Just like Chevron Federal, if you do not qualify for membership through your employer or other means, you can join one of the non-profit associations linked to the credit union for as little as $15. And you’ll have to maintain a savings account with a minimum deposit of $25.
Spectrum’s CDs range from this 3-month term to 5-year terms. Members can also get a full slate of bank accounts, as well as loans, credit cards, and insurance.
At a slightly lower APY of 1.65%, we have My Banking Direct’s 3-month CD. You will need to deposit a minimum of $2,500.
Also an online bank, this one is a service of New York Community Bank, which has roots dating back to the late 1800s.
Customers can open up checking accounts, money markets, or CDs with My Banking Direct. Besides the 3-month CD, the bank also offers a 9-month term.
BrioDirect is another online bank focused on high-yield savings accounts and CDs with competitive rates. Its 3-month CD offers an APY of 1.55%. Because you’ll need just $500, it clinches a place in our top five.
BrioDirect is powered by Sterling National Bank, which has been in existence since 1888. Other CD terms range from 30 days to five years. It also has a very competitive high-yield savings option.
Although it is “India’s International Bank,” Bank of Baroda has a strong presence in the U.S. While it’s primarily focused on Rupee remittance services, it also offers competitive certificates of deposit. A minimum of $1,000 is needed to open any of its CD accounts, including the 3-month one that has a 1.55% APY. If you make an early withdrawal, you will forfeit 1% of interest.
With headquarters in Mumbai, India, Bank of Baroda has a footprint in 25 countries with 5,300 branches worldwide.
Though it has a fairly high minimum deposit of $10,000, the solid 1.53% APY on its 3-month CD earns Luther Burbank Savings a spot on our list.
Founded in 1983 in Santa Rosa, California, Luther Burbank Savings is named after a local botanist, horticulturist, and pioneer in agricultural science. The bank has 10 branches and eight loan offices.
In addition to its CDs, Luther Burbank Savings also offers checking, money market, and IRA accounts, as well as business banking and lending.
Virtual Bank’s 3-month eCD, as the bank refers to it, offers a solid 1.51% APY with a $10,000 minimum deposit.
VirtualBank is a division of IBERIABANK, which is a commercial bank founded in New Iberia, Louisiana in 1887.
Other eCDs offered by Virtual Bank range from one-month to five-year terms. Customers can also open eMoney Markets and eChecking accounts.
With a slightly lower APY of 1.50%, Popular Direct’s 3-month CD is still competitive. However, like the others toward the end of the list, a more significant $10,000 minimum deposit is required.
Popular Direct is focused on savings and CD accounts only. CD terms range from three months to five years. As a subsidiary of Popular, Inc., a full-service U.S. bank also located in Puerto Rico and the Caribbean, it’s backed by 122 years of history.
Rounding out the top 10 with an APY of 1.46% is First Internet Bank. Only a $1,000 minimum is needed to open the account, which might make it more desirable than the previous few contenders with higher deposit requirements, even if they have the edge on APY.
As its name implies, First Internet Bank was the first FDIC-insured institution to operate entirely online, beginning in 1999. Its corporate headquarters are in Indiana.
First Internet Bank offers CDs in a variety of terms up to five years. In addition to CDs, there is a full suite of banking products and services including checking, savings, money markets, HSAs, and child accounts, as well as loans, credit cards, and business banking services.
What Is a 3-Month CD?
A certificate of deposit is a type of savings product with a fixed rate of return and a fixed maturity date. In exchange for leaving your money with a bank or credit union for a set period of time, you’ll lock in a fixed APY for that entire period. So in the case of a 3-month CD, the APY is fixed for three months. At the end of the term, you’ll get the interest that’s accrued plus your original deposit. Then you can either take your money, renew, or switch to a new CD. If you withdraw early, there’s often a penalty.
Who Is a 3-Month CD Best For?
If you’re looking for a fixed interest rate product to help grow your savings in the short term, a 3-month certificate of deposit (CD) account can provide more favorable and predictable earnings than you’d get in a regular savings account. Since the APY is almost always higher than what you’d get from a traditional savings account, and it’s fixed, you’ll know exactly how much the CD will earn.
The real benefit might be that it ties up the money for a few months so that you’re not tempted to spend it. You may want a 3-month CD if you have a big expense coming up in a few months. (Because the term is so short, 3-month CDs typically have lower APYs than longer term CDs, so consider how long you can part with your money before choosing a term.)
A 3-month CD can also be used as part of a CD ladder strategy, in which you divide up your money to purchase CDs of varying lengths so you’re not losing access to all of it for a long time. When the 3-month CD matures, you will be able to withdraw your money and can then decide if and how to reinvest it.
What Are the Alternatives to a 3-Month CD?
For a very short-term savings strategy, a 3-month CD can be a good product. It really depends on your personal financial goals and how willing and able you are to lock down some of your savings. Some other alternatives you can consider include:
Different Term Lengths
If you’re leaning toward a CD, consider the pros and cons of a longer term. Going with a CD that matures in one year or even five years will provide a higher APY, but you won’t be able to access the money for a longer time frame.
High-Yield Savings Account
Opting for an online savings account is another safe option if you aren’t comfortable with parting ways with your money for a set time. Some APYs are in line or even higher than what you’ll find among current 3-month CDs. On the downside, savings account rates move with benchmark interest rates. Plus, if you don’t have self-discipline, you might spend any money that’s not locked down.