Benzinga found that the best 3-month CD rate right now is 4.71% APY from TotalBank.
Three-month Certificates of Deposit (CDs) are less common than their longer-term counterparts, but they can provide attractive interest rates, particularly from online banks. These short-term investment options appeal to investors looking for liquidity and low commitment, making them a viable choice in uncertain economic times. The recent 50 basis point cut in the federal funds rate by the Federal Reserve on September 18 has created a ripple effect on interest rates across various financial products, including CDs. Adjustments by banks and financial institutions may not be immediate, leading to discrepancies in CD rates. As a result, while the anticipated economic shifts unfold, it’s important for investors to carefully compare rates and terms across banks to make the most informed decisions.
Benzinga reviewed the current best 3-month CD rates based on annual percentage yield (APY), minimum deposit, customer service and more. Explore our list to find the perfect CD option for your savings strategy.
Quick Look at the Best 3-month CD Rates Today:
- Best for High APY: TotalBank — 4.71% APY
- Best for Overall Terms: MutualOne Bank — 4.70% APY
- Best for Credit Union Membership: America First Credit Union — 4.65% APY
- Best for Online Banking: Popular Direct — 4.65% APY
- Best for Minimum Deposit Amount: Western Alliance Bank — 4.05% APY
Best 3-month CD Rates
Here are some of the best 3-month CD rates currently available, so you can make an informed decision and make the most of your money.
1. Best for High APY: TotalBank
TotalBank offers a high annual percentage yield of 4.71% on its 3-month Certificate of Deposit, which is among the best 3-month CD rates available in the market. However, the minimum deposit of $25,000 is high compared to competitors. There is a maximum amount allowed per client, which is $1,000,000.
TotalBank's High-Yield Certificate of Deposit is a good fit if you have substantial cash to invest in a short-term CD to earn a competitive interest rate. To open a Certificate of Deposit account, you must be a citizen of the United States or a resident alien with a valid Social Security number, a valid email address and a U.S. mailing address. TotalBank offers CDs with terms ranging from three months to five years.
- 3-month CD APY: 4.71%
- Minimum deposit: $25,000
Why We Picked It: With competitive rates and a short term commitment, TotalBank offers one of the highest annual percentage yield for a 3-month Certificate of Deposit. Plus, its simple and user-friendly online platform makes it easy to open and manage your account from the comfort of your own home.
2. Best for Overall Terms: MutualOne Bank
MutualOne Bank is a community-focused financial institution that has been serving the MetroWest area of Massachusetts for over 130 years. With a strong commitment to providing personalized and innovative banking solutions, MutualOne Bank has built a reputation for excellence in customer service and community involvement.
MutualOne Bank's 3-month Certificate of Deposit offers an annual percentage yield of 4.70% with a low $500 minimum opening deposit. The account must be funded with new money to the bank and interest is paid at maturity. An early withdrawal fee may apply.
To open a Certificate of Deposit account, you will be required to provide the following: a government issued ID, your Social Security number, a valid email address and the means to fund the account (credit card/debit card, checking account or savings account.)
- 3-month CD APY: 4.70%
- Minimum deposit: $500
Why We Picked It: MutualOne Bank's 3-month Certificate of Deposit is a solid option for savers looking for a short-term, low-risk investment opportunity. With high APY, low minimum deposit requirements, flexible terms and insurance from the Federal Deposit Insurance Corporation (FDIC), this CD offers a mix of features that make it a top choice for those looking to grow their savings.
3. Best for Credit Union Membership: America First Credit Union
The America First Credit Union's three-month Certificate Accounts boast an annual percentage yield of 4.65% and a low minimum deposit of $500. This combination of high interest and low entry barrier makes this Certificate of Deposit a great pick if you don't mind joining a credit union.
Also, if you prefer in-person banking, the convenience of access to one of the 120+ branches in Arizona, Idaho, Nevada, Utah and New Mexico adds further appeal to the America First Credit Union three-month certificate of deposits. Aside from CDs, they also offer other financial products such as loan and IRA investing.
- 3-month CD APY: 4.65%
- Minimum deposit: $500
Why We Picked It: With competitive rates, flexible terms, low fees, and additional member benefits, America First Credit Union is a top contender for credit union membership and CD investments.
4. Best for Online Banking: Popular Direct
Popular Direct's three-month Certificate of Deposit has a competitive annual percentage yield of 4.65%. It requires a minimum opening deposit of $10,000, which is relatively higher than most competitors.
To get started, you must create an account online. Popular Direct will ask for the following details when setting up your account: personal details, contact information, government issued ID and employer information.
One of the key benefits of opening a Certificate of Deposit account with Popular Direct is the ease of online banking. With 24/7 access to your account, you can manage your savings from anywhere at any time. This makes it convenient for busy individuals or those who prefer to handle their finances online. Its mobile app is available for both Android and iOs users.
- 3-month CD APY: 4.65%
- Minimum deposit: $10,000
Why We Picked It: With its user-friendly platform and range of financial products, Popular Direct is a top choice for those who prioritize online banking convenience and maximizing their savings.
5. Best for Minimum Deposit Amount: Western Alliance Bank
Western Alliance Bank’s three-month CD, powered by Raisin, offers an annual percentage yield of 4.05%. With a low minimum deposit requirement of just $1, it provides unparalleled accessibility. The user-friendly savings platform Raisin allows you to easily discover, fund and manage multiple CDs and high-yield savings accounts from a diverse range of banks and credit unions. The Western Alliance Bank's three-month CD's low barrier to entry allows anyone to get started investing.
- 3-month CD APY: 4.05%
- Minimum deposit: $1
Why We Picked It: With a high yield and relatively low minimum deposit requirement, Western Alliance Bank makes CD accessible for individuals looking to start saving and earning interest.
What Are 3-month CDs?
A 3-month Certificate of Deposit is a financial instrument that gives you a fixed interest rate for three months. Unlike a regular savings account, you usually can't take out your money early without a penalty. The good news is that a 3-month CD usually pays more interest than a regular savings account, especially if you look for the best CD rates. However, the downside is that your money is locked up for three months and you might miss out on better rates if they go up during that time.
How Do 3-month CDs Work?
When you put money into a 3-month Certificate of Deposit, you agree not to take it out until the three months are up. In return, you get a fixed interest rate that's usually better than a regular savings account. At the end of the three months, you can either take out your money and the interest you earned or renew the CD for another term.
The interest rate you get on a three-month CD depends on the bank and the market conditions. Usually, longer-term CDs have higher rates than shorter-term ones. But in some cases, the best 3 month CD rates are higher than the 1-year CD rates. This unusual situation is known as an inverted yield curve and may indicate that investors expect lower inflation and economic growth in the future and so, prefer to lock in their money for longer terms at lower rates.
One reason for this scenario could be the Federal Reserve raising its benchmark rate, which affects the rates of different financial products, including CDs. When the Fed increases its target interest rate, banks might adjust their CD rates, but not all at once or by the same amount. Some banks might offer better rates for shorter-term CDs to attract more customers while keeping longer-term CD rates lower to avoid paying too much interest in the future as they expect the Feds may drop its rate again.
How to Find the Best 3-month CDs
Before diving into a 3-month CD, consider the following:
- Customer service: Choose a bank or credit union with excellent customer service for your Certificate of Deposit account as it will come in handy when you have issues. Check online reviews and ratings to see how others rate the service. Consider support availability through phone, email, chat or local branches.
- The bank’s credit rating: A high credit rating indicates financial stability and an institution’s ability to repay obligations. Check ratings from agencies like Standard & Poor's, Moody's or Fitch.
- APYs: When looking for the best 3 month CD rates, choose those with a higher annual percentage yield. The APY reflects the interest rate and compounding frequency, determining how much you earn from your Certificate of Deposit. A higher APY means more earnings.
- Minimum deposit requirements: A lower minimum opening deposit makes it easier to start saving with a CD. Still, consider that some institutions offer higher APYs for larger deposits. Balance the initial investment with the potential return.
- Withdrawal penalties and restrictions: Withdrawal rules differ among institutions, depending on amount, timing and frequency. Less or no penalties mean you have more flexibility to access your funds in case of emergencies or opportunities. Some institutions may offer higher APYs with stricter withdrawal terms, so consider the balance between liquidity and return.
- Maturity and grace periods: The maturity date is when your CD term ends, allowing you to withdraw or renew. The grace period, following maturity, lets you make changes without penalties — like withdrawing or adding funds. These periods vary, ranging from days to weeks. Longer maturity and grace periods give you more time to decide what to do with your CD.
How to Open a 3-month CD Account
Opening a 3-month Certificate of Deposit account is easy:
- Choose a bank or credit union with a favorable 3-month CD rate.
- Fill out an online or paper application, providing personal and financial information.
- Deposit the required amount via transfer, check, cash or debit card.
- Review and sign the CD agreement detailing terms like APY, minimum opening deposit and more.
- Get a confirmation email, letter or certificate of deposit as proof of your CD account.
Pros and Cons of Investing in 3-month CDs
Depending on your financial plan there are benefits and drawbacks to investing in 3-month CDs.
Pros
- Three-month CDs typically offer higher interest rates than regular savings accounts.
- You can lock in a guaranteed rate of return on your money regardless of market changes or bank decisions.
- Three-month CDs are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) up to $250,000 to protect your funds in case of bank or credit union failure.
- You can access your money relatively quickly compared to longer-term CDs.
- Three-month CDs offer diversification from other investment types like stocks, bonds or mutual funds.
Cons
- Withdrawing money before the term ends can result in losing interest and reducing overall return while limiting liquidity.
- CDs have low returns compared to other investments, but they also have lower risk and volatility.
- Inflation can cause your money to lose its purchasing power over time, due to increasing prices of goods and services.
- Missing out on other investments can mean missing out on better returns, features and benefits.
3-month CDs Alternatives
Consider these alternatives to 3-month CDs:
- Savings accounts: They are usually more liquid than CDs and offer flexibility with withdrawals but may have lower interest rates.
- Money market accounts: Similar to savings accounts, money market accounts may require a higher minimum balance and offer higher rates. Some financial institutions may impose transaction limits.
- Longer-term CDs: These CDs come with longer terms like six months to five years. While they typically have higher rates, they also lock your money for longer.
Earn More With the Best 3-month CDs
Three-month CDs can provide a rewarding savings opportunity with fixed returns. Be sure to compare CD rates and terms from different financial institutions to find the best option for your goals. Keep in mind that with a 3-month CD, your funds will be locked away for a short period of time, so it's important to only invest money that you won't need immediate access to. By choosing a reputable institution with a competitive rate, you can potentially earn a higher return on your investment in just a few months.
Frequently Asked Questions
Who has the highest three-month CD rates?
As of today, TotalBank has one of the highest 3-month CD rate, offering an annual percentage yield of 4.71%.
Are 3 month CDs worth it?
If you’re looking for a short-term, low-risk investment, a three-month CD can be a good option, especially if the rates are competitive.
Can you get 6% on a CD?
It’s unlikely to find a CD offering a 6% interest rate in the current market environment. CD rates are typically lower and are influenced by broader economic factors.
What’s better for you? CD or high-yield savings accounts?
The choice between a CD and a high-yield savings account depends on your financial goals and liquidity needs. CDs generally offer higher interest rates but tie up your money for a specific term, while high-yield savings accounts provide easier access to your funds.