Banking » Compare Banks » Best 3-Month CD Rates: Comparison
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Best 3-Month CD Rates: Comparison

The top CDs for 3 years offer 4%-5% APY. Here's a 3 year rates comparison, how much you can earn and what are the early withdrawal penalty
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

CDs are a fixed term savings product. They are considered a safe investment as there is no risk that you will lose your initial investment and you can receive a specific rate of return or APY on the amount in your CD.

The three month in a three month CD refers to the term. This means that if you take out a three month CD, your CD will mature in three months. At this point, you can withdraw some or all of the account funds or renew the CD for another three month term.

Compare 3-Month CD Rates

 While every bank, credit union, and other banking services offers different rates, 3-month CD rates are signficantly lower compared to 12 and 24 months.

Also, many institutions don't offer three months' CDs, so the choices are quite limited.  So, if you’re looking for the highest three month CD rates, you may want to look at online banks and credit unions, who tend to offer the best three month CD rates.

Financial Institution
3 Months CD APY
Minimum Deposit
3.50%
$1,000
3.00%
$500
0.50% – 1.02%
$2,500
2.00%
$2,500
2.00%
$0

How Much You Can Earn With 3 Month CD?

A key factor in how much your CD pays is the type of financial institution. Generally speaking, traditional banks tend to offer lower rates, since they need to cover the overhead of maintaining their own branch and ATM networks, but there are some exceptions.

Here are your expected earnings (before tax) if you lock your money for 3 months:

Financial Institution
3 Months CD APY
Interest Earned
Chase Bank
3.50%
$494
CitiBank
3.00%
$742
Wells Fargo
0.50% – 1.02%
$123 – $252
Discover Bank
2.00%
$494
BMO Harris
0.05%
$12
Ally Bank
2.00%
$494
Charles Schwab
4.78%
$1,186
Vanguard
5.10%
$1,178
Fidelity
4.75%
$1,178

What Are the Main Limitations of a 3 Month CD?

No financial product is perfect and there are several potential drawbacks that you need to consider before opening one. These include:

  • Mediocre Rates: CDs are available in a variety of terms from one month to ten years, but most financial institutions tier their APYs with the highest rates being offered with the longer terms. This means that a three month CD may not offer the best CD rates.
  • Early Withdrawal Penalties: Although three months is a short time, if you need access to the cash in an emergency situation or there is a limited time offer to get a far better return, you’ll incur an early withdrawal penalty. Early withdrawal penalties apply if you take out some or all of the money in your CD before it matures. The penalty is usually calculated as a number of days of interest, so depending on how long you’ve held the CD you could end up losing any interest you’ve accrued.
Financial Institution
Early Withdrawal Penalties For 3 Months CD APY
Chase Bank
All interest earned
CitiBank
All interest earned
Wells Fargo
1 month of interest
Discover Bank
All interest earned
BMO Harris
All interest earned
Ally Bank
60 days of interest

When to Consider a Three Month CD?

There are a number of circumstances when it is worth considering a three month CD. These include:

  • You are concerned about rising interest rates: If interest rates are continually rising, you may worry about tying your money up for a long time. With a three month CD, you can earn more than you would with a typical savings account, but you’ll have the money back to reinvest in a higher paying product.
  • You’re building a CD ladder: If you’re considering building a CD ladder, three month CDs can be a great vehicle towards longer term products. You can purchase various three month CDs over a few months and then reinvest the funds when each one matures to eventually end up with a CD maturing every month or year, depending on your strategy.
  • You have a need for the funds in three months: If you’re planning a project, but will not need the funds for several months, a three month CD can be a great way to maximize your return. However, you’ll need to check the rates on savings products carefully to ensure that you’re getting the best 3 month CD rates.

When You May Want to Skip a Three Month CD?

Of course, there are circumstances when a three month CD may not be the best choice for you.

  • You don’t need the money in the short term: If the rates are fairly stable in the marketplace and you are certain that you won’t need the funds in the short term, you may be better with a longer term CD. While this may tie up your money for longer, you are likely to be able to access higher rates.
  • The rates aren’t as high as savings accounts: Another reason to skip a three month CD is if you can find a savings account offering the same or higher APYs. In this scenario, you won’t have the tie in restrictions, but can still get a decent return on your savings fund.

3 Month CD vs Savings Account

We’ve touched on savings accounts as an alternative to a three month CD, but there are some crucial differences between these products. Generally, savings accounts have no withdrawal restrictions, so if you find you need the money, you can simply withdraw it from your account.

However, whether a savings account is a better option than a three month CD will depend on the specific product. For example, if a savings account is offering a lower than average rate and there is a monthly maintenance fee on the account, then it is a no brainer about whether you should open a three month CD.

On the other hand, if you’re looking at a high yield savings account, you may be able to get a better rate than a three month CD, particularly if you’re using a traditional bank. This means that you can earn more on your balance and you’re not tied into a specific term, you can withdraw your money as and when you like.

Financial Institution
3 Months CD APY
Savings Account APY
Chase Bank
3.50%
0.01%
CitiBank
3.00%
3.85%
Wells Fargo
0.50% – 1.02%
0.15% – 2.51%
Discover Bank
2.00%
3.60%
BMO Harris
0.05%
1.00%
Ally Bank
2.00%
3.75%

FAQs

You can get about 2-3% when you lock your money for three months.  The interest earned on a 3-month CD can vary depending on the bank or financial institution and the current interest rate environment.

Typically, the interest rate on a 3-month CD is lower than the rate on a longer-term CD, such as a 5-year CD. It is best to check with your bank or financial institution for the current interest rate on a 3-month CD.

A 3 month CD, or certificate of deposit, is a type of savings account offered by banks and credit unions. It is a fixed-term investment, meaning that the money deposited into the account cannot be withdrawn for a specific period of time, in this case, 3 months.

When the 3-month term is up, the depositor has the option to withdraw the money, including the interest earned, or to renew the CD for another term. If the depositor chooses to withdraw the money before the term is up, they will typically be subject to a penalty fee.

 

It is difficult to predict exactly how high 3 month CD rates will go. As of March 2023, the rates suppose to increase even more in the future due to FED rate increase, but predicting future interest rates is always uncertain.

 

It depends on your investment goals and risk tolerance. A 3-month CD typically offers a lower interest rate than longer-term CDs, but it also has a shorter term and less risk.

Also, some savings account offer a higher rates than 3 months CDs, so it worth to check it before locking your money.

Compare CD Rates

Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann's areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
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The product offers that appear on this site are from companies from which this website receives compensation.