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Reviewed By
Claire Dickey
Claire Dickey
Senior Editor
Claire is a senior editor at Newsweek focused on credit cards, loans and banking. Her top priority is providing unbiased, in-depth personal finance content to ensure readers are well-equipped with knowledge when making financial decisions.
Prior to Newsweek, Claire spent five years at Bankrate as a lead credit cards editor. You can find her jogging through Austin, TX, or playing tourist in her free time.
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Finding a place to put and grow your money can take some work. Savings accounts and the stock market might work for some people, but not all. Certificates of deposits, or CDs, are another savings option. If you’re looking into CDs, the best 3-month CD rates today range from 4% to 5%, depending on the institution. Here are our top picks.
Our Methodology
Newsweek Vault’s banking experts have done hundreds of hours of research to present you with all the latest information about your banking options. Whether you’re interested in opening a new checking account or savings account, our research spans all the top online banks, credit unions and brick-and-mortar branches.
We assessed the following five key factors to help you choose the best account for your personal finance needs.
•Associated fees
•ATM access
•Balance requirements
•Customer service
•Interest-earning potential
Our Picks
- Best Overall: Signature Federal Credit Union
- Best for Large Minimum Deposit: TotalDirectBank
- Best for Low Minimum Deposit: Western Alliance Bank
- Best Bonus Options: Lake Michigan Credit Union
Best 3-Month CD Rates of 2024
Best Overall
TotalDirectBank
Vault Verified
APY
5.42%
Min. Deposit Requirement
$25,000
Term Length
3 months
Early Withdrawal Penalty
1 month of the compounded interest
Why We Chose It
If you have a large sum of money that you’d like to put in a 3-month CD, TotalDirectBank is a solid option. You’ll earn a 5.42% APY on 3-month CDs, but you need to deposit at least $25,000 to get that rate.
Pros
- One of the highest APYs available right now for 3-month CDs
- Deposit up to a maximum of $1 million
Cons
- Not available everywhere, including Florida and some U.S. territories
- Customer support hotline closed on weekends
Best for No Early Withdrawal Penalty
Signature Federal Credit Union
Vault Verified
APY
3.00%
Min. Deposit Requirement
$500
Term Length
3 months
Early Withdrawal Penalty
None
Why We Chose It
Signature Federal Credit Union offers a 3-month CD with a competitive rate. Plus, there’s no early withdrawal penalty on 3-month CDs (nor on 6-, 9- and 12-month CDs).
Pros
- Lower minimum deposit for a high rate
- Offers other competitive products, like a high-yield checking account
- No early withdrawal penalty on 3- to 12-month CDs
Cons
- Must become a member by opening a savings account with $5
- Interest compounded on monthly basis
- Call center not open on weekends
Best Bonus Options
Lake Michigan Credit Union
Vault Verified
APY
4.50%
Min. Deposit Requirement
$500
Term Length
3 months
Early Withdrawal Penalty
90 days interest
Why We Chose It
Lake Michigan Credit Union offers a rewards program, even for CD accounts. Those who reach the VIP level get an extra 0.25% bonus APY on CD products—even for CDs as low as 3 months.
Pros
- Most folks are eligible to become members, even for a credit union
- Federally insured through the National Credit Union Administration (NCUA)
- Reasonable minimum deposit requirement
Cons
- Not available to California residents
- Limited nationwide branch access
- Contact center not open on Sundays and limited support on Saturdays
3-month Certificate of Deposit Overview
CDs are a great way to invest a lump sum of money in both the short and long term. With high yields, you can lock in a rate now and enjoy the high rate until your term is up.
What Is a 3-Month CD?
A certificate of deposit (CD) is a type of savings account. The term determines how long your funds stay in the account untouched. Naturally, a 3-month CD is a certificate of deposit that holds onto your money for three months.
Since CDs are a type of savings account, available interest rates can fluctuate based on market conditions. But once you lock in your rate, it won’t budge until the term is up.
How Do 3-Month CDs Work?
A 3-month CD works by depositing an initial balance and leaving the money in the account for three months. If you choose to make any early withdrawals, you’ll likely face an early withdrawal penalty.
Once the three months are up, you can either renew for another three months, roll over those funds into another CD or move the funds elsewhere, like a savings account, checking account or into the stock market.
Who Should Get a 3-Month CD?
A 3-month CD is best for folks who want to maximize their short-term savings with a lump sum of cash. If you have a large amount of money that you want to earn money on without taking too much risk in the stock market, you can try a CD.
If you want to earn interest and avoid potentially losing money but don’t have a large deposit, you may want to try a high-yield savings account rather than a CD. Keep in mind, though, high-yield savings accounts don’t lock in annual percentage yields (APYs). So what you get when you sign up isn’t necessarily the same yield you’ll see one, two or three months down the road.
Pros and Cons of 3-month CDs
CDs are good for some folks, but not everyone. Make sure you know the pros and cons before opening an account.
Pros of 3-month CDs
- Offer higher yields compared to traditional savings accounts
- Shorter terms mean you get your money back faster than longer-term CDs
- Lock in rate now before interest rates potentially drop later this year
Cons of 3-month CDs
- Not as many options compared to longer-term CDs
- Not always the highest yield offered
- Not a great option for folks who need their funds before the term is up
What to Consider When Choosing a 3-Month CD
If you’re thinking about getting a CD, make sure you consider all potential factors first—including APYs, minimum deposits and fees—among different financial institutions.
APYs
The higher the APY, the more you’ll get back when your term is up. Not all financial institutions offer the same APY, and there’s no set standard across the board. The best 3-month CD rates hover around or above 5%.
Minimum Deposits
Every bank has different minimum deposit requirements. Some require very high amounts (like $25,000), and some have very low amounts (like $1). Consider what you can reasonably afford to put into a CD, and make sure not to overdo it simply to receive a high APY.
Fees
Most—but not all—CDs come with an early withdrawal penalty. That means if you take your money out of your CD before the term is up, you could face a fee. The cost of this fee varies by financial institution, but for 3-month CDs, you can expect 1 month’s interest to a full 3-months’ interest wiped out.
There might be other fees to look out for as well, like monthly maintenance fees and account management fees. Pay attention to what a bank charges compared to the APY, and do the math to see if the yield outweighs the fees, should you expect to need an early withdrawal.
Frequently Asked Questions
Is It Worth Doing a 3-Month CD?
A 3-month CD might be worth it if you have a lump sum of money that you want to stow away and earn interest on. While you could put this money in a high-yield savings account, there’s a chance your interest rate could drop before you need it, which limits how much you’ll earn.
Can You Get 6% on a CD?
Some financial institutions offer upwards of 6% on CDs, but with little consistency. Right now, you won’t find it on 3-month CDs, but some institutions offer it on longer CD terms.
Should I Buy CDs Now or Wait?
If you want to lock in a high APY before rates potentially drop, you may want to secure a CD now. Fluctuation in the market is normal, but if you want to capitalize on high CD rates right now, you may want to lock your money in sooner rather than later.
Editorial Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. We may earn a commission from partner links on Newsweek, but commissions do not affect our editors’ opinions or evaluations.
Dori Zinn
Contributor
Dori Zinn is a personal finance journalist with more than a decade of experience covering credit, debt, investing, budgeting, saving, retirement, college affordability, jobs and careers and more. She loves helping people learn about money.
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