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As of July 2022, the national average APY on a 3-year CD is 0.37%, according to the FDIC. If you want to grow your money and maintain the same interest rate on an account, a certificate of deposit (CD) may be a good option.
The best 3-year CD rates are at least 2.50% right now. Three-year terms provide a nice balance of a good rate and a relatively short length of time. You’ll likely earn a higher APY on a 3-year CD than with a shorter-term CD, and you won’t have to part with your money for as long as you would with a longer term.
3-year CD rates at the largest US banks
The biggest banks in America pay lower rates than our top picks. However, it may be important to you to bank with a company you’re familiar with. Here are the rates you’ll earn on a 3-year CD with some of the most popular institutions:
BankAPYNext stepsCiti0.10%Citibank Citibank Fixed Rate Certificates of Deposit (CDs)Capital One2.50%Capital One Capital One 360 CDs®PNC Bank0.01% to 0.04%PNC Bank PNC Fixed Rate Certificate of DepositTD Bank0.05%TD Bank TD Bank Choice Promotional Certificate of DepositBank of America0.03%Bank of America Bank of America Standard Term Certificate of DepositChase Bank0.01% to 0.05%Chase Chase Certificate of Deposit (CD)US Bank0.10%US Bank US Bank Certificate of Deposit
Learn more about our top picks
First National Bank of America Certificate of Deposit
Why it stands out: First National Bank of America’s main strength is its competitive interest rate.
APY for a 3-year CD: First National Bank of America Certificate of Deposit
3-year CD early withdrawal penalty: 360 days interest
What to look out for: First National Bank has high early withdrawal penalties for CDs. Some of our other top picks charge less to take out funds before your CD matures if you’re concerned about withdrawing money from your account early.
Bread Savings High-Yield CD
Why it stands out: Bread Savings pays high rates on CDs and charges reasonable early withdrawal penalties.
APY for a 3-year CD: Bread Savings High-Yield CD
3-year CD early withdrawal penalty: 180 days simple interest
What to look out for: Minimum deposit. Bread Savings requires at least $1,500 to open a CD.
First Internet Bank of Indiana Certificate of Deposit
Why it stands out: First Internet Bank of Indiana pays a good rate for 3-year CDs, and contrary to what the bank’s name may lead you to believe, this online bank is available to residents of all US states.
APY for a 3-year CD: First Internet Bank of Indiana Certificate of Deposit
3-year CD early withdrawal penalty: 365 days interest
What to look out for: Monthly compounded interest and early withdrawal penalty. First Internet Bank of Indiana compounds your interest monthly, not daily. Depending on how much money is in your CD, this may or may not make a significant difference. You can also find a bank that charges less for an early withdrawal from a 3-year CD.
Ally High Yield Certificate of Deposit
Why it stands out: Ally is one of the few banks that doesn’t have a minimum deposit for opening a CD, so you can start with any amount. The bank’s early withdrawal penalties are also lower than what most banks charge.
APY for a 3-year CD: 2.50% APY
3-year CD early withdrawal penalty: 90 days interest
What to look out for: Types of CDs. If you know you want a 3-year CD from this bank, then the Ally High Yield CD is the one for you.
But if you’re open to other term lengths, then you may want to look at the Raise Your Rate CD, which lets you increase your rate should Ally’s rates go up. You’d be able to increase rates once during a 2-year term and twice during a 4-year term.
Ally also has an 11-month No Penalty CD.
Synchrony CD
Why it stands out: Synchrony pays competitive rates and has a $0 minimum opening deposit. If you’re not positive you want a 3-year term, or if you’re building a CD ladder, Synchrony has plenty of other term lengths to choose from.
Interest for a 3-year CD: Synchrony CD
3-year CD early withdrawal penalty: 180 days simple interest
What to look out for: Although Synchrony has a variety of term lengths overall, you can find ones longer than 5 years elsewhere.
TAB Certificate of Deposit
Why it stands out: TAB Bank pays good rates and charges relatively low early withdrawal penalties. You get to choose how you receive your interest — keep it in your CD, receive a check, or transfer the money to another TAB bank account.
Interest for a 3-year CD: TAB Certificate of Deposit
3-year CD early withdrawal penalty: 180 days interest
What to look out for: The main downside is that you can find slightly better rates elsewhere right now.
Pentagon Federal Credit Union Money Market Certificate
Why it stands out: PenFed has some of the highest interest rates on long-term CDs right now.
Interest for a 3-year CD: Pentagon Federal Credit Union Money Market Certificate
3-year CD early withdrawal penalty: All interest earned OR 30% of the gross dividends you would have earned if the certificate had matured
What to look out for: The Pentagon Federal Credit Union Money Market Certificate has high early withdrawal penalties, especially if you withdraw money within the first year.
Capital One 360 Certificate of Deposit®
Why it stands out: Capital One stands out because it has a $0 opening deposit and a competitive interest rate on its 3-year CD.
Interest for a 3-year CD: Capital One 360 Certificate of Deposit®
3-year CD early withdrawal penalty: 6 months of interest
What to look out for: Capital One 360 is Capital One’s online operation, so you have to be comfortable with online banking. You can have a hybrid in-person/online banking experience if you live near a branch or Café, but your options will depend on where you live.
CDs we considered that didn’t make the cut
We looked at the following 3-year CDs as well. However, our winners have higher interest rates, lower minimum opening deposits, and lower early withdrawal penalties, which make them more compelling options
Marcus High-Yield CDLive Oak Bank CDDiscover CD (Member FDIC)NBKC CDCitizens Access Online CDNavy Federal Credit Union Standard CertificateSallie Mae CDPopular Direct CDBrioDirect High-Yield CDAmerican Express CD®CIT Bank CDAmerant CDBMO Harris CD
Which bank is the most trustworthy?
We’ve compared each company’s Better Business Bureau score. The BBB grades businesses based on factors like responses to customer complaints, honesty in advertising, and transparency about business practices. Here is each company’s score:
InstitutionBBB ratingFirst National Bank of AmericaA+Bread SavingsA+First Internet Bank of IndianaA+AllyC-SynchronyA+TAB BankA+PenFedA+Capital One 360A-
Capital One and Ally are the only three institutions on our list that don’t have an A+ rating from the BBB.
Keep in mind that a BBB rating isn’t necessarily the end-all-be-all. To see if a bank is a good fit, talk to current customers about their experiences or read online customer reviews too.
Capital One is the only institution on our list with a recent public controversy.
Capital One paid $80 million after the Office of the Comptroller of the Currency stated that the bank was partially responsible for a 2019 data breach in which a hacker accessed over 100 million credit card applications. The OCC said Capital One’s security was inefficient at the time.
Why trust our recommendations?
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don’t have to.
Frequently asked questions
What is a CD?
A CD, or certificate of deposit, is a time-sensitive savings account that usually holds your money at a fixed interest rate for a specified period of time. If you don’t need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed APY for the term of the CD.
With most institutions, you typically won’t be able to deposit more money or access your funds before the CD matures without paying a penalty.
You will, however, earn interest on the amount and have the option to collect those payments monthly or reinvest them into your CD. Most banks offer varying rates for different terms and deposit amounts — in many cases, the longer the term, the higher the rate.
At the CD’s maturity date, you’ll typically have a 10- to 14-day grace period in which you can withdraw your money and close the account or renew the term.
What is a 3-year CD?
With a 3-year CD, you stash away your money for 36 months and typically earn a fixed rate. You have the option to renew your CD at the end of the 3-year period, or close the account and pocket the money.
How do CD rates work?
Most CDs lock in your rate for the entire term. For example, if you open a 3-year CD at a 0.75% APY, you’ll earn 0.75% for the entire three years. If you renew your CD after it matures, you’ll earn the new rate available in three years.
There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.
Which is best: a 1-year, 3-year, or 5-year CD?
Terms of one, three, and five years are some of the most common CD options. Your choice will likely depend on how soon you plan to need the money and which term pays the highest rate. For the most part, longer terms pay higher rates — but that isn’t always the case.
Going for a shorter term gives you the opportunity to snag a better APY if rates are up in a year. With a 3-year or 5-year CD, you could miss out on higher rates. But on the other hand, you could avoid lower rates with a 3-year or 5-year term if rates drop later.
Many experts recommend CD laddering. With this strategy, you open multiple CDs with different term lengths so you can take advantage of higher rates with longer terms, but also access some of your money earlier. For instance, you might open 1-year, 3-year, and 5-year CDs at the same time, which means you’ll get some of your money back in one year, then more in three years, then more in five years.
Which is better, a 3-year CD or a high-yield savings account?
The choice between a 3-year CD and high-yield savings account will depend on several factors.
First, an institution typically pays a higher rate for a 3-year CD than for a savings account.
A CD also locks in your rate for the entire term. If rates are dropping, this could make the CD a better choice, because your savings account APY could decrease over the next few months. If rates are rising, the savings account might be a better fit, because your rate could go up. Either way, there’s a good chance rates will fluctuate over a 3-year period.
It also depends on when you’ll need to access your money. You should be able to access funds from your savings account regularly — but you’ll have to pay a fee if you need access to money from your 3-year CD before it matures. You can also continuously add money to your savings account, whereas most CDs block you from making additional deposits after opening the account.
Which is better, a 3-year CD or a money market account?
Like with a high-yield savings account, you may prefer a money market account over a CD if you want quick access to your money. Money market account rates also fluctuate, so you may prefer a money market account if rates are rising, but a CD if rates are dropping. Still, remember that rates will likely go up and down over a 3-year term.
Many banks require higher deposits for money market accounts than CDs, which could affect your decision. It’s also good to remember that you can add more funds to your money market account over time, while a CD only allows an opening deposit.
Which is better, a 3-year CD or another investment account?
CDs aren’t generally considered investments the same way something like an index fund, which puts your money into the stock market, is. Instead, a CD is typically viewed as a type of savings account, and your potential for losses and gains — your risk — is much more limited. Because the stock market is risky, experts generally don’t advise investing money you’ll need in the next five years. In the case of a stock market drop, you wouldn’t have time to make up your losses.
If you need to access your money in three years and want a guaranteed rate of return, a 3-year CD is a better choice than a different type of investment account.
If you’re comfortable parting with your money for longer and want to take more risk with your money, then you may want to invest in the stock market. One way to do this is through tax-advantaged retirement accounts, like a 401(k) or IRA, which grows your money over decades. Another is through brokerage accounts, which are useful tools to build long-term wealth, but can’t guarantee a given return like a CD can.
There is such a thing as an IRA CD, which is a sort of combo savings/investment account. It’s a safe investment tool that may be a worthwhile option for people who are close to retirement age.