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. 22, 2021. Unless otherwise noted, all require you to leave your money on deposit for 36 months.
Best 3-Year CD Rates
|Bank or Credit Union||APY||Minimum Deposit||Early Withdrawal Penalty|
|Hughes Federal Credit Union||1.11%||$1,000||6 months of interest ($50 minimum)|
|Heartland Credit Union||1.05%||$25,000||180 days of dividends|
|Lafayette Federal Credit Union||1.01%||$500||12 months of interest|
|Quorum Federal Credit Union (30 months)||1.00%||$1,000||6 months of interest|
|MAC Federal Credit Union||1.00%||$500||3 months of interest|
|Heartland Credit Union||1.00%||$500||180 days of dividends|
|Quontic Bank||1.00%||$500||24 months of interest|
|PenFed Credit Union||1.00%||$1,000||12 months of interest if closed in the first year; 30% of interest if closed after the first year|
|Interior Federal Credit Union||0.96%||$500||6 months of interest|
|Abound Credit Union||0.95%||$500||6 months of interest|
Here are details about the institutions on our list.
Hughes Federal Credit Union was founded in 1952 to serve employees of the Hughes Aircraft Company (yes, the very same company started by Howard Hughes of aviation legend). It is based in Tucson, Arizona, and has more than 136,000 members.
Although it operates branches only in Arizona, you can open an account from anywhere online, provided you meet the membership criteria. These include living, working, or attending school in Tucson, being employed by a certain partner company, or being related to an existing member of the credit union. If you don’t qualify in one of those ways, you also can join by donating at least $10 to one of four organizations, such as the Friends of the Oro Valley Library. You’ll also need to keep a relatively high amount—at least $50—in a savings account.
Heartland Credit Union began in 1948 as Hutchinson Teachers Credit Union in Hutchinson, Kansas, with 14 members and $315 in assets. The credit union has seven physical branches in Hutchinson, Wichita, and the surrounding areas in Kansas, but anyone can manage an account through online banking or the CO-OP ATM network.
Membership is available nationwide to anyone working in or retired from nearly two dozen broadly defined professions. Those not certain of their eligibility are encouraged to contact the credit union directly.
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 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 also can become a member by first joining the Homeownership Financial Literacy Council for $10. You also must keep a $50 balance in a savings account.
Quorum Federal Credit Union began in Chicago in 1934 as Kraft Employees Credit Union. In 2005, it took the name Quorum Federal Credit Union and expanded membership to additional employee groups, and in 2014, it launched its online banking services.
It has one service center at its headquarters in Purchase, NY, and another in Deerfield, Illinois. Additionally, customers have access to more than 85,000 ATMs nationwide and an online banking app.
Membership is available to employees of KraftHeinz, Mastercard, Philip Morris, and dozens of others. Those not employed by one of the partner groups still can join by becoming a member of the American Consumer Council.
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.
Established in 2005, Quontic is a primarily online bank headquartered in New York. It has three branches, including its headquarters, in the New York area, but its main focus is online banking.
In addition to CDs, customers can find standard options such as checking, savings, and money market accounts, and an online banking app. The bank also handles mortgages.
Membership at PenFed Credit Union is available to anyone nationwide, including those in Guam and Puerto Rico. It also serves customers in Okinawa, Japan.
The credit union was formed in 1935 and has grown to more than 2 million members and more than $25 billion in assets. The credit union offers a full array of consumer banking options, including, checking, savings, credit cards, mortgages, auto loans, and more.
All banking can be done through its app or via online banking.
Based out of the U.S. Department of the Interior Building in Washington, D.C., Interior Federal Credit Union was established in 1935. Members can do their banking online, at over 5,500 shared branches nationwide, or more than 55,000 shared ATM locations nationwide.
Membership is available to individuals or the family of individuals employed by the DOI, one of its bureaus, or one of its contractors. Bureaus of the DOI include the National Park Service, Bureau of Reclamation, U.S. Geological Survey, Bureau of Indian Affairs, Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE), Bureau of Land Management, Office of Surface Mining, and U.S. Fish and Wildlife Service. Employees, volunteers, or partners of numerous other groups also are eligible for membership. A full list is available on Interior FCU’s website.
Formerly known as Fort Knox Federal Credit Union, Abound Credit Union is a Kentucky-based institution with ties to the Fort Knox Army base. Started by 10 people in 1950, Abound claims it is the largest credit union in the state, with 18 locations and more than 100,000 members. While it caters to military and civil service employees and their families, anyone can join, as long as they pay the $10 one-time membership fee and keep at least $5 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 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.