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Compare the best 3-month CD rates of October 2020

Explore accounts with high APYs to reach your short-term savings goals.

Updated

Fact checked
Promoted

Our pick for 3-month CDs: Radius Bank Short-Term CDs

Radius Bank Short-Term CDs logo

0.25%

3-month APY

  • FDIC Insurance
  • Customer Support
  • $1,000
  • Minimum deposit to open
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The best three-month CDs let you lock-in a high interest rate for a short period of time. For our research, we found the accounts with the highest APYs, then narrowed down our list by focusing on factors like deposit requirements, availability, fees and account features. But we excluded jumbo CDs because most have opening deposit requirements of $100,000 or more.

Compare the 9 best 3-month CD rates

Below you can see the best 3-month CDs. Use the table below to sort by highest APY and minimum opening deposits. If you’d like to compare more than one CD at once, click the “Compare” box next to your favorite picks for a side-by-side view.

Data indicated here is updated regularly
Name Product 3-month APY Minimum deposit to open
Citi CD
0.2%
$500
BrioDirect High-Rate CDs
0.5%
$500
First Internet Bank CDs
0.25%
$1,000
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Compare up to 4 providers

How do I choose the best 3-month CD?

When choosing the best certificate of deposit, look for:

  • A competitive fixed interest rate. In order to find the best rate for your short-term CD, you’ll need to shop around and compare your options.
  • Low penalties. There are typically no establishment or monthly fees with a three-month term CD, but you should check what the penalty is for an early withdrawal — especially if there’s a chance you’ll need your money early.
  • A minimum balance you can commit to. Keep in mind that banks may offer higher interest rates for a higher balance. If you’re investing $10,000, there’s a good chance that an account with a $500 minimum won’t have the highest interest rate.
  • Interest compounded daily. This will get you the highest earning on your CD.

Alternative 3-month CDs

These 3-month CDs have competitive interest rates, but they didn’t make our best list because they’re regional or have strict requirements. But depending on your financial needs, they could be just what you’re looking for.

Spectrum Credit Union Logo

Spectrum Credit Union Share CD

  • APY: 0.90%
  • Required minimum deposit: $500

My Banking Direct Logo

My Banking Direct CD

  • APY: 0.35%
  • Required minimum deposit: $2,500

Bethpage Logo

Bethpage Federal Credit Union CD

  • APY: 0.50%
  • Required minimum deposit: $50

Advancial Logo

Advancial Junior Jumbo CD

  • APY: 0.79%
  • Required minimum deposit: $25,000

What is a 3-month CD and how does it work?

A three-month CD is a short-term savings account where the interest is calculated daily and paid to you at the end of the three-month term. Certificates of deposit, or CDs, are deposit accounts that offer a higher rate of interest the longer you keep the money in the account. You can choose a term length from one month to five years with most banks.

Finder.com’s top tip

Make sure you’re comfortable with the length of your CD and that you won’t need to access the money before the term expires. If you do need to withdraw early you’ll not only have to pay a penalty, but the interest rate may be lowered as well.

If you think you can lock your money away for longer than three months, consider a longer term instead. The longer the term length, the more you’ll benefit from compound interest.

Compare the best 9-month CD rates

What are the risks of a 3-month CD?

As far as investments go, a three-month CD is considered to be a low-risk way to increase savings. Your deposits up to $250,000 are guaranteed by the government if you use an FDIC insured bank. However, there are some things to watch out for when using a three-month CD to hold your savings:

  • Penalties. If you need the money in your CD before the end of the term, you’ll need to pay a penalty fee. In addition, the interest rate may be changed to reflect the lower rate that a shorter CD has.
  • Automatic rollover. Some banks will automatically roll your balance into a new CD at the end of the three months if you don’t let them know beforehand that you will be withdrawing your money. Even if you do want to invest for another three months, it’s a good idea to check with the bank to make sure you’re getting the best interest rate — especially if they’ve risen since you opened the account.

What are the pros and cons of opening a 3-month CD?

Before locking your savings into a three-month commitment, you should consider both the positive and negative points that this type of savings plan has to offer.

Pros

  • Competitive fixed interest rate. A CD should allow your money to grow at a rate that is slightly higher than a standard savings account interest rate.
  • Incentive to save. If you have a big expense in the near future, the penalty for early withdrawal is a good incentive to leave the money alone until the term expires.
  • No monthly fees. There are no ongoing fees when you save using a three-month CD.

Cons

  • Minimum balance. Banks will typically have a minimum balance requirement. This varies from bank to bank, making it an important feature to research.
  • Interest paid at maturity. Unlike certificates of deposit, a three-month CD will typically not pay you any interest until the account matures.

Bottom line

If you have a big purchase coming up in three months or more, a CD can be a great way to build up interest in a short amount of time. However, if there’s any chance you’ll need your money sooner, a traditional savings account is the safer option.

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