Three-year CDs are an easy way to earn some serious interest on a lump sum of cash that you won’t need to touch for a while. They’re in the middle of the range of CD terms (most banks offer terms of between three months and five years) and as such, they can be an important component of a CD ladder.
Each week, we review over 150 banks and credit unions to find the best rates available nationwide for 3-year CDs. We track APYs daily but re-evaluate the list weekly. All accounts are available to the public and are insured by either the FDIC or NCUA.
For this list, we considered products that lock in deposits for 30 to 41 months. Our rankings are based primarily on the best annual percentage yields (APY). In the case of a tie, we then look at the CD with the shortest term, then with the lowest minimum deposit required to earn the APY. From there, we compare the penalties for early withdrawal. These factors allow us to ultimately decide which banks earn their spots in our rankings.
Here are the top 3-year CD rates as of March 31, 2020. Unless otherwise noted, all require you leave your money on deposit for 36 months.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and updating them accordingly.
Best 3-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Premier America Credit Union||2.05%||$25,000||6 months of interest|
|Hughes Federal Credit Union||2.02%||$1,000||6 months of interest ($50 minimum)|
|Pen Air Federal Credit Union||2.00%||$500||6 months of interest|
|American Express||1.95%||$0||9 months of interest|
|Dow Chemical Employees’ Credit Union||1.90%||$500||12 months of interest|
|Georgia’s Own Credit Union||1.90%||$500||9 months of interest|
|Barclays||1.85%||$0||6 months of interest|
|Marcus by Goldman Sachs||1.85%||$500||9 months of interest|
|Capitol Federal Savings Bank (30-month)||1.85%||$1,000||6 months of interest|
|Lafayette Federal Credit Union||1.82%||$500||2 months of interest|
Here are details about some of the institutions on our list.
With more than 100,000 members, Premier America is one of the nation’s top credit unions. It was founded in 1957. You can become eligible for membership simply by first joining the Thousand Oaks Alliance for the Arts for free. (You’ll also need to open a savings account with at least a $5 deposit.) Though it’s based in California, members can use the 5,000+ branches in its shared network.
From checking and savings accounts to loans and credit cards, there is a variety of banking products from which to choose at Premier America. Certificates are available in terms ranging from three months to five years.
Hughes Federal Credit Union has grown to 132,000 members since it was first established for Hughes Aircraft Company employees in 1952. Today, anyone can join the Arizona-based credit union by making a $10 donation to one of four local library nonprofits; you’ll also need to open a savings account with a $50 deposit.
It is potentially easier to join Pen Air Federal than some other credit unions, since all you need is to join the Friends of the Navy Marine Corps Relief Society if you don’t have any of the other affiliations listed on the website (and the credit union will make a $1 donation on your behalf). You’ll also need to keep at least $25 in a savings account to remain eligible for membership.
Founded in 1936, Pen Air Federal Credit Union is the largest and oldest local credit union in Pensacola, Florida. While there are only 15 locations in Northwest Florida and Southeast Alabama, there are more than 108,000 members nationwide.
In addition to CDs ranging in term from three months to five years, Pen Air has personal and business savings and checking accounts, loans, and more.
Amex is primarily known for its credit cards and charge cards, but it also offers high-yield savings and certificate accounts. CD terms range from six to 60 months and have no minimum deposit requirements, which is unusual. You won’t want this as your primary bank because there is no checking account, but the CD and savings rates tend to be good, especially for a well-known bank.
Dow Chemical Employees’ Credit Union was founded in 1937 for just employees. Today, with its additional employer groups and membership eligibility, it’s 62,000 members strong. Despite its name, almost anyone can become a member of Dow Chemical Employees’ Credit Union. One easy way is making a $35 donation to the Midland Center for the Arts. You’ll also need to make a $5 deposit to open a savings account.
Members have access to accounts including savings, checking, loans and credit cards. In addition to the 3-year CD, you can also choose a six-month, 1-year, 18-month, or 2-year term.
With 210,000 members, Georgia’s Own Credit Union has come a long way since it was established in 1934. In fact, today it’s one of the largest credit unions in Georgia.
You can become a member even if you’re not a Georgia resident, however, by joining the Getting Ahead Association, which costs $5. You’ll also have to deposit a minimum of $5 in an account.
Barclays Online Banking is headquartered in Wilmington, Delaware, and is one of several divisions of Barclays, the British banking behemoth that traces its roots back to the 1690s. Customers can choose from online savings accounts as well as certificates that range in length from three months to five years.
Marcus by Goldman Sachs is the online lending and deposits platform started by Goldman Sachs in 2016. Marcus offers no-fee, fixed-rate personal loans, high-yield online savings accounts, and certificates of deposit. CDs range in length from six months to six years. One nice perk is that you get the highest published APY within 10 days from when you open your account. So if rates happen to go up right after you open a CD, you’ll get that higher rate. You can apply for and open an account online in minutes.
Capitol Federal has a 125-year history. Headquartered in Topeka, Kansas, today it’s a full service financial institution that serves Kansas and Missouri with 44 branches, but you can also open an account online from anywhere in the U.S.
Customers can open checking, savings, money market, and IRA accounts, as well as take out home and auto loans, and more. CDs range from 3-month to 8-year terms.
Lafayette Federal Credit Union is based out of Rockville, Maryland, and it operates just eight branches scattered around the Washington D.C. area. It’s a full-service credit union, and you can even choose from variable-rate and fixed-rate certificates depending on what tickles your fancy.
If you don’t qualify for membership through other means (such as living in the area or working for certain employers), you can also become a member by first joining the American Consumer Council for $8, or by joining the Homeownership Financial Literacy Council for $10. You must also keep a $50 balance in a savings account.
What Is a 3-Year CD?
A certificate of deposit (CD), offered by banks and credit unions, provides a fixed interest rate (typically higher than other account types) in return for the account holder agreeing to leave the deposit for a fixed amount of time. The rate is fixed so customers know exactly how much they’ll earn by the time the CD matures. For a 3-year CD, the account holder agrees not to touch their deposit for 30-41 months, depending on the bank or credit union. At the end of the term, the full interest will be added to the deposit amount. The customer then has the option to withdraw the full amount or renew or change the CD.
Who Is a 3-Year CD Best For?
A 3-year CD is appropriate for someone who wants to earn more interest than a typical savings account would offer.
Remember, you have to be OK with locking up your money for three years. That’s because there are usually early withdrawal penalties, and if you have to give back earnings to pay those penalties, it will have been a wasted opportunity.
A common reason to consider a 3-year CD is to save for some sort of life milestone that is set to take place a few years in the future. Perhaps your daughter’s Sweet 16 or a big wedding anniversary trip to Europe. The idea is that it’s an investment for the not-so-near future. Opening a CD helps safeguard your money, and lets you collect some interest while you wait for it to mature.
Typically, the longer the term, the higher the rate you’ll receive. A 3-year CD can also be used as part of a CD ladder. With a CD ladder, you buy CDs of varying lengths to mitigate the risks of locking all your money into one long-term CD.
What Are the Alternatives to a 3-Year CD?
If you’re looking for a savings option, a 3-year CD is just one of them. When choosing the best approach for you, the key is to think about your current financial situation, your goals, and your saving/spending habits. Beyond a 3-year CD, there are some other options to consider.
Explore Different CD Terms
If you know you want to go the CD route, you may decide to go with a shorter or longer term, depending on your needs. Shorter term CDs allow you access to your money sooner, but will typically have a lower APY. Longer terms sometimes earn more, but will keep your money tied up for a longer period of time.
What’s the difference between interest rate and annual percentage yield (APY)? The interest rate is what the bank actually pays you for your money. The APY is what you actually receive, on an annualized basis, after fees and compounding are factored in. If you’ve wondered why the advertised interest rates on CDs are often lower than their APYs, it’s because of compounding—the bank is paying interest on the interest it has already paid you!
High-Yield Savings Accounts
If you’d rather not tie up your money, you might consider an online savings account. Some APYs are just under what you’d earn from a 3-year CD APY. The difference is that savings account rates fluctuate. If opening a CD will help ensure that you won’t end up spending your savings, then that route might make the most sense for you.
If you prefer instant account access, we teamed up with QuinStreet to bring you the following high-yield savings and money market account offers.