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 from about three months to five years) and as such, they can be an important component of a CD ladder.
We review more than 150 banks and credit unions to find the best rates available nationwide for 3-year CDs. We track annual percentage yields and re-evaluate the list every weekday. All accounts are available to the public and are insured by either the Federal Deposit Insurance Corp. or the National Credit Union Administration.
For this list, we considered products that lock in deposits for 30 to 41 months. Our rankings are based primarily on the best 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 Oct. 19, 2020. Unless otherwise noted, all require you to 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|
|MAC Federal Credit Union||1.30%||$1,000||3 months of interest|
|Georgia's Own Credit Union||1.20%||$500||9 months of interest|
|Hiway Federal Credit Union
|1.20%||$25,000||6 months of interest|
|1.15%||$2,500||12 months of interest|
|Pen Air Federal Credit Union||1.15%||$500||6 months of interest|
|Home Loan Investment Bank||1.15%||$1,000||6 months of interest|
|Evansville Teachers Federal Credit Union||1.15%||$1,000||6 months of interest
|Wings Financial Credit Union||1.11%||$10,000||730 days of dividends|
|Evansville Teachers Federal Credit Union
|1.10%||$1,000||6 months of interest
|TruStone Financial Credit Union||1.10%||$500||12 months of interest|
Here are details about the institutions on our list.
MAC Federal Credit Union offers members financial products like checking, savings, and money market accounts, credit cards, insurance, and more. Originally founded in 1952 to serve the active duty and civil service personnel in Fort Wainwright, Alaska, the credit union is now open to anyone who purchases a two-year membership for $40 to the Association of the United States Army. When applying for the membership, just change the chapter to the Polar Bear Chapter in Fort Wainwright, Alaska.
Based out of Atlanta, Georgia’s Own Credit Union has been around since 1934 and has about 200,000 members and $3 billion in assets as of September 2020. While living in certain parts of Georgia is one way to qualify for membership, you also can join by first becoming a member of the Getting Ahead Association for $5 or Georgia’s Own Foundation for $10. As with most other credit unions, you’ll also need to keep at least $5 in a savings account in order to keep your membership active.
Hiway Federal Credit Union was founded in 1935 to serve transportation workers in Minnesota. Membership is available to anyone nationwide with a $10 donation to the Minnesota Recreation & Park Foundation (plus a $5 deposit to your share savings account). Members have access to thousands of CO-OP shared branches nationwide.
INSBANK Online is the digital arm of Tennessee-based INSBANK. It offers just two types of accounts: money market accounts and CDs. CDs offer flexible terms ranging from three months to three years, allowing you to meet short- and medium-term savings goals. Accounts come with convenience features such as an online dashboard and private client advocates to answer your questions.
Founded in 1936, Pen Air Federal Credit Union is the largest and oldest local credit union in Pensacola, Florida. Though there are only 15 locations in Northwest Florida and Southeast Alabama, there are more than 113,000 members nationwide.
In addition to CDs ranging in terms from three months to five years, Pen Air also offers personal and business savings and checking accounts, along with various other types of accounts and lending products.
It may be easier to join Pen Air Federal than some of the other credit unions on this list, as all you need is to join the Friends of Navy Marine Corps Relief Society if you don’t have the other affiliations listed on the Pen Air website. There’s no fee to join because Pen Air will make a $1 donation to the organization for you. You’ll also need to make a $25 deposit in a savings account to join.
Home Loan Investment Bank offers more than just mortgages, as evidenced by its place on our best CDs list. Its history dates back to 1959, but it became FDIC-insured in 1988 and became a federal savings bank in 1995.
In addition to CDs, it offers savings and checking accounts. Headquartered in Warwick, Rhode Island, it has several branches throughout Rhode Island and Massachusetts. However, anyone can open an account online and use its mobile app to manage accounts.
Evansville Teachers Federal Credit Union launched in 1936 when a small group of teachers decided to pool their savings and offer loans. It began with a small field of membership including the board of education and Evansville College in Evansville before incorporating other organizations when it merged with Owensboro Public Schools Federal Credit Union in 1992. Its consumer offerings include checking, savings, and money market accounts, loans, and CDs with terms ranging from three months to six years.
To become a member, you’ll either need to be related to or live with a current member or work for or become a member of an organization within the credit union’s field of membership. For example, you can join the Mater Dei Friends and Alumni Association (MDFAA) with annual dues of just $5. You’ll also need to open a savings account and maintain a $5 deposit.
Wings Financial Credit Union, based in Apple Valley, Minnesota, was started in 1938 by a handful of Northwest Airlines employees. Since then, it’s grown to have more than $5.3 billion in assets and 280,000 members, and anyone in the aviation industry or from Atlanta, Detroit, Orlando, Seattle-Tacoma, or parts of Wisconsin and Minnesota is eligible to join. If you don’t meet the eligibility requirements any other way, don’t worry. You can join by becoming a member of the Wings Financial Foundation, which carries a $5 membership fee. You’ll also need to keep $5 in a savings account.
With 14 locations across Minnesota and Wisconsin, TruStone Financial Credit Union has come a long way since it was founded by eight Minneapolis teachers in 1939. The credit union offers a full suite of personal and business banking services including checking, savings, loans, and credit cards. CD terms range from three months to five years.
Anyone who doesn’t meet eligibility based on employer or location can become a member by making a $10 donation to the TruStone Financial Foundation. You’ll also need to open a savings account with a $5 deposit.
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 set amount of time. Because the rate is fixed, the account holder knows exactly how much the CD will earn when it matures. For a 3-year CD, the account holder agrees not to touch the 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 usually are 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 is on the horizon. 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 also can 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 probably will have a lower APY. Longer terms likely will earn more but will separate you from your money for a bigger stretch 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 often are 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 close to what you’d earn from a 3-year CD. 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 have partnered with the following banks to bring you the high-yield savings and money market account offers displayed in the table.