Best 3-Month CD Rates
The best 3-month CD rates provide a short-term investment opportunity with guaranteed returns. Interest rates may be lower than longer-term CDs, but they offer liquidity and a safe place for funds in the short run.
Written by
Matthew Levy
After graduating with a Bachelor of Science in Economics from the University of Victoria in 2010, Matthew developed a passion for helping clients meet their financial freedom through strong, risk-adjusted portfolios. Matthew also undertook and completed his CFA® charter in 2015, a rigorous professional credential program promoting the highest standards of education, ethics, and professional excellence in the investment profession.
Last Update on Sep 27, 2023
Table of Contents
The Best 3-Month CD Rates
Bethpage Federal Credit Union Certificate Account
3-month CD APY
2.25%
Minimum Deposit
$50
Certificate Options
Nine standard certificates from 3 months to 5 years
Digital Experience
Manage accounts online or via the mobile app
Dividend Compounding
Daily compounding, credited monthly
Grace Period
Seven-day grace period post maturity for modifications
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Bethpage Federal Credit Union’s Certificate Accounts have competitive dividend rates, considering there is only a $50 minimum deposit requirement. They have a variety of nine standard certificates, spanning from 3 months to 5 years. Its 3-month CD has an APY of 2.25%, and is a top pick for those with short-term needs. Users can manage their accounts online or through the mobile app, and joining Bethpage is simple with a $5 deposit into a savings account.
Pros:
- Competitive dividend yields across various terms.
- Wide choice of terms available.
- An attractive low minimum deposit requirement of $50.
- Joining the credit union is straightforward.
Cons:
- Some other institutions may offer higher rates.
- To access the certificate, you need to open a savings account.
- Membership is a prerequisite.
Additional Details
Customer Support/Unique Features:
Bethpage has an excellent digital experience, allowing members to manage their certificate accounts online or via the dedicated mobile app. For those unfamiliar, note that credit unions use the term “dividends” instead of “interest” when discussing CD return rates. The company’s CD dividends compound daily and credited monthly.
Any Additional Details:
Members who open specific term certificates in a branch for 6-, 12-, 24-, 36-, or 39-month periods can select monthly or quarterly dividends. After maturity, a seven-day grace period is given to renew or modify your account. There are early withdrawal penalties of either 90 or 180 days of dividends, depending on your chosen term length.
Consumers Credit Union Certificate Account
91-day Certificate APY
0.50%
Minimum Deposit
$250
Customer Support
24/7 live chat and 6-day-a-week phone service
Membership
$5 donation to the Consumers Cooperative Association required
Interest Compounding
Daily compounding, credited monthly
Grace Period
10-day grace period post maturity before auto-renewal
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Consumers Credit Union has a diversified offering of certificates, with terms from 91 days to 55 years. The 91-day certificate has a 0.50% APY with a minimum deposit of $250. They are primarily an online entity, although some physical branches exist in Illinois. There is a 24/7 live chat feature and a dedicated telephone customer service 6 days a week. To join, simply donate $5 to the Consumers Cooperative Association.
Pros:
- Diverse certificate term lengths cater to various financial needs.
- Accessible minimum deposit of $250.
- Daily compounding of interest.
Cons:
- Some institutions might have higher rates.
- Membership remains a prerequisite.
Additional Details
Customer Support/Unique Features:
Consumers Credit Union has an excellent customer service approach, with mostly online but some physical locations in Illinois. The website, alongside their mobile app, makes online banking easy, and they provide around-the-clock live chat and 6-day-a-week phone service.
Any Additional Details:
As they are a credit union, they also use the term “dividends” instead of “interest.” Dividends are compounded daily and credited monthly. Early withdrawal penalties exist of 60 days dividends for terms of a year or less and 120 days dividends for longer terms. There is a 10-day grace period post maturity for funds withdrawal, after which there is auto-renewal.
Everbank Bank Basic CD (formerly TIAA Bank)
3-month CD APY
Excellent at 4.00%
Minimum Deposit
$1,000 with daily interest compounding
Grace Period
10-day grace period after maturity for adjustments
Mobile App
Highly-rated for monitoring and managing CDs
Maturity Alert
Proactive 20-day advance notice
Interest Withdrawal
Flexibility to withdraw accrued interest before maturity without penalty
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TIAA Bank has CDs spanning from 3 months to 5 years. The 3-month CD has an excellent 4.00% APY with a minimum deposit of $1,000 and includes daily interest compounding. A unique advantage of their offering is the flexibility to withdraw accrued interest before maturity without a penalty. They also send a 20-day advanced maturity alert and have a 10-day grace period after maturity to allow for changes. They also have a highly-rated mobile app for monitoring and managing your CDs.
Pros:
- Competitive APY across various terms.
- Diversity in term lengths caters to different savings goals.
- Top-tier mobile application.
- Proactive 20-day advance maturity alert.
Cons:
- Certain credit unions and online banks might offer higher rates.
- Penalties associated with early withdrawals can be on the higher side.
Additional Details
Customer Support/Unique Features:
TIAA has an extremely user-friendly interface and efficient customer service. Their mobile app has gained high ratings, emphasizing the ease of use and features available.
Any Additional Details:
TIAA Bank has interest that is compounded on a daily basis and credit to accounts monthly. Cautious with early withdrawals, as there are penalties which will vary based on the term length of the CD chosen.
TotalDirectBank CD
3-month CD APY
5.36%
Minimum Deposit
$25,000
Maximum Deposit
Up to $500,000
Interest Compounding
No compounding, credited at term’s end
Maturity Notice
Communication emphasized with notice prior to maturity
Grace Period
10-day grace period before automatic renewal
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TotalDirectBank has an outstanding 5.36% APY on its 3-month CD. The rate is excellent, but the minimum deposit is steep at $25,000. On the other hand, the maximum deposit they allow is a large enough sum of $500,000, so those with deeper pockets should look here for their savings. Interest does not undergo compounding and is only credited at the end of the term. You will receive notice prior to maturity, followed by a 10-day grace period before an automatic renewal of your CD at the prevailing interest rate.
Pros:
- Impressive 5.36% APY that’s highly competitive.
- Capability to deposit a substantial amount of up to $500,000.
Cons:
- High minimum deposit requirement of $25,000.
- Absence of compounding interest.
- Lack of a mobile application for convenient account management.
Additional Details
Customer Support/Unique Features:
The company emphasizes communication, sending out a maturity notice as your CD ends. Their customer support is also helpful and available.
Any Additional Details:
The interest in their 3-month CDs is simple interest, meaning it doesn’t compound. If you withdraw prematurely, you will also be charged an early withdrawal penalty equal to a month of interest.
BrioDirect High-Rate CD
3-month High-Rate CD APY
0.25%
Minimum Deposit
$500
Mobile App
Convenient, well-reviewed, and highly secure
Banking Products
Limited to CDs and a money market account
Interest Compounding
Daily, disbursed at term’s end
Grace Period
7-day grace period after maturity for adjustments
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BrioDirect is an offshoot of Sterling National Bank but only offers a 0.25% APY for its three-month High-Rate CD. There is a low minimum deposit of $500, accessible for savers who are just beginning their savings accounts. Account holders can monitor their finances via their mobile app, which is highly secure. BrioDirect offers a range of banking products and wants to emphasize quality over quantity.
Pros:
- A convenient and well-reviewed mobile app.
- Approachable minimum deposit threshold of $500.
Cons:
- Limited to offering only CDs and a money market account.
- Only 0.25% APY for a short-term CD.
- Absence of physical branch locations.
Additional Details
Customer Support/Unique Features:
Their mobile application is a standout feature, which allows users to track their finances on the go. Being a subsidiary of Sterling National Bank adds another layer of trust, as deposits and accounts are protected and provided by the bank, which is an FDIC member.
Any Additional Details:
The interest compounds daily and is disbursed at the term’s end. If you need to liquidate before maturity, there will be an early withdrawal penalty of 90 days of interest, whether the interest was earned at that point or not. There is a 7-day grace period after maturity to make alterations or changes to your accounts.
3-Month CD Rate Trend
In the past few years until recently, 3-month CD rates have languished near zero, with interest rates from the Federal Reserve extremely accommodative for the economy. However, as the Fed has had to raise rates to combat inflation, 3-month CD rates have also risen into the 3-5% range.
The Top 3-Month CD Rates
Currently, the national average of 3-month CD rates sits between 3-5%, depending on what institution you go to. There is a wide range, with some companies still offering low rates near zero, while others offering rates above 5%, sometimes with deposit restrictions. Some of the more traditional institutions may offer lower rates, but online banks and credit unions such as Bethpage Federal Credit Union and TotalDirectBank are recognized for their competitive rates. Do your research before entering into any CD agreement for 3-months to ensure you get the best CD rate available.
Comparison Shopping For CDs
While the Annual Percentage Yield (APY) is significant, it’s not the only factor to consider when buying a CD. A CD with slightly lower APY but fewer fees and more lenient withdrawal terms may ultimately be a better choice for some investors. Looking into a brokered CD may be the right play for those looking to maximize their returns.
These CDs are typically sold by brokerage first, often coming with higher rates, but come with their own set of risks. If you need to cash out before maturity, you may have to sell your brokered CD in the secondary market, potentially below its purchase value.
3-Month CD Basics
A 3-month CD is a fixed-term savings product that guarantees a set interest rate for 3 months. It allows investors to lock in a rate for a short duration, often higher than a regular savings account.
There are some typical restrictions to be aware of:
- Early Withdrawal Penalties: Withdrawing funds from a CD before maturity will typically result in a penalty. It can be a flat fee or a few months’ worth of interest, depending on the institution.
- Rollover at Term’s End: Many CDs automatically roll the balance of your matured holding into a new CD with a similar term unless instructed otherwise.
- Fixed Interest Earnings: The interest rate for a CD is set at the time of opening and won’t change for the duration of its term, regardless of the broader market fluctuations.
Understanding 3-Month CD Operations
When opening a 3-month CD, investors make an initial deposit – known as the principal amount. This amount is locked in for a 3-month period, and will earn interest at the rate agreed. Remember that the interest rate shown is normally the annual equivalent, not the rate you will gain over 3 months.
One of the benefits of many CDs is compounding interest. Depending on the institution and the specific terms of the CD, interest can compound daily, monthly, or otherwise, allowing your interest to earn interest, maximizing returns over time.
Should an investor need to access the funds in the CD before the 3-month term ends, there is normally a penalty. These can vary, but are often a certain number of months’s worth of interest. Be aware of these fees before locking in your funds, especially if there’s a chance you need access to the funds on short notice.
Pros And Cons Of Investing In 3-Month CDs
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Choosing the Right 3-Month CD
Selecting the right 3-month CD depends on various factors:
- Interest Rate (APY): Generally, higher is better, but other factors can affect your choice.
- Institution’s Reputation: Research the bank or credit union’s customer reviews, financial stability, and history.
- Compounding Frequency: A CD that compounds interest daily may yield more than one that compounds monthly.
- Minimum Deposit: There are minimum deposits you may need to meet before opening an account.
- Early Withdrawal Penalties: Understand any consequences associated with accessing your funds before maturity.
- Digital Access: If you value online banking, check whether there is a user-friendly app or online portal.
Steps to Open a 3-Month CD
- Research and Choose an Institution: Compare various banks or credit unions’ rates.
- Visit the Institution In-Person or Online
- Open an Account: If not already a member or account holder, you may need to open a checking or savings account alongside your CD.
- Fund the Account: Deposit the amount you want to invest in the CD.
- Review and Sign the CD Agreement: Before you finalize, read the terms carefully.
- Confirmation: Once opened, you should receive a confirmation with all of the account details for your records.
Frequently Asked Questions (FAQs)
What Is A 3-Month CD?
A 3-Month CD, or Certificate of Deposit, is a fixed-term savings product where you deposit a sum of money and agree not to withdraw it for three months. In return, the bank or credit union offers a higher interest rate than typical savings accounts.
Can I Withdraw Money From My 3-Month CD Before It Matures?
Yes, but doing so usually incurs an early withdrawal penalty. The penalty might be a portion (or all) of the interest earned. Always check the CD’s terms before withdrawing funds early.
How Is The Interest On A 3-Month CD Paid Out?
Interest payment methods vary by institution. Some might pay it into the CD account, allowing it to compound, while others might transfer it to a linked checking or savings account. Some CDs only pay the interest at the end of the term.
What Happens When My 3-Month CD Matures?
Upon maturity, you typically have a grace period (e.g., 7-10 days) to make changes without penalties. If no action is taken, many institutions will automatically renew the CD for the same term at the current interest rate.
Are 3-Month CDs Worth It?
It depends on your financial goals. 3-Month CDs can be ideal for individuals looking for a short-term, low-risk investment with a guaranteed return. However, they might offer lower returns than longer-term CDs or other investment options.
Is My Money Safe In A CD?
Generally, yes. CDs at banks are typically insured by the FDIC up to the applicable limits, and those at credit unions are insured by the NCUA.
How Do 3-Month CDs Compare To Other Short-Term Investments?
3-Month CDs often offer higher interest rates than regular savings accounts but may have lower returns than other short-term investments. The key advantage of CDs is the guaranteed return.
Matthew Levy
Author
After graduating with a Bachelor of Science in Economics from the University of Victoria in 2010, Matthew developed a passion for helping clients meet their financial freedom through strong, risk-adjusted portfolios. Matthew also undertook and completed his CFA® charter in 2015, a rigorous professional credential program promoting the highest standards of education, ethics, and professional excellence in the investment profession.
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