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Best 3-Years CD Rates

Have some money you don’t intend to use for the next year? I know somewhere you could put it. Savings accounts are an excellent way to store money value and grow it. However, growth isn’t significant.


But, with certificate of deposits, you’re guaranteed significant money growth. And, that’s regardless of the market conditions. We’ll explain everything around CDs. For starters, here are some of the best CD rates for 3 years

  • APY
  • Minimum Deposit
  • 0.25% - 0.25%
  • $0
  • 0.60% - 0.80%
  • $2,000
  • 0.60% - 0.75%
  • $2,000
  • APR range
  • Fees
  • Terms
  • Amounth
  • Unemployment protection
Bank 1
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 2
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No
Bank 3
  • 6.95%–35.89%
  • Up to 5% transfer fee
  • 3–5 years
  • $1,000–$40,000
  • No

Table of Contents

How CD rates are calculated?

CDs attract compound interests, all paid at the end of the agreed CD term. The interests are fixed and all paid upon maturity.


First, you have to choose an institution with your preferred terms. Once that is done, they’ll work out your expected earnings based on the present market rates and your preferred term and let you know the expected earnings.


Your money is then locked at this rate, regardless of the future changes in the market. This, therefore, renders CDs safe for growing money.


Despite the national average value, institutions will still consider some factors when deciding their rates.


Most offer higher rates than the national average for a wider customer base.


Though money stored on short-term CDs grows, long-term CDs are preferred for even higher yields. Investing in long-term CDs means leaving your money untouched for a longer period, which means higher risk to you, hence the higher returns..

Hot Tip:

Upon maturity, you withdraw your principal amount and the accrued interests. You can as well reinvest the amount for an additional term.

Choosing the right 3-Years CD rates

Choosing the right CDs is the first and the most crucial step to higher yields.


Since we are more concerned with how much your principal amount will yield, you’ll first consider interests. Prioritize institutions offering higher rates. Banks and credit unions are the most preferred here. The APY will give you an idea of what the interest rates are.


How much you want to invest will also guide you on which CDs to choose. Most institutions have minimum deposits for different CD accounts. Shop around for institutions with minimum deposits that conform to your needs.


You also want to consider penalty fees. If for some reason you’re forced to withdraw the principal amount before maturity, how much will the institution charge you?


CD laddering is also crucial. Experts recommend buying different CDs with different terms. This way, you can hit higher rates that come with longer terms. Spreading your money will give you early access to your funds.


This way, in case one matures and you don’t need the cash urgently, you could choose to reinvest them and begin the cycle again, preferably if the rates are higher.


Please note that you should only invest money you don’t intend on touching for the term with which you choose to invest. Avoid investing money meant for emergencies or some form of daily upkeep on CDs.


Before investing in CDs, take time to shop for lenders offering higher rates and with more friendly terms. Ensure they ask for affordable joining fees and demand minimum deposits you can afford.

Short-Term CD vs Long-Term CD

For how long do you intend on leaving your money untouched? Remember, one of the major differences between CDs and traditional savings accounts is that with CDs, your money is locked in.


That means you won’t access your money for the defined period. Doing so will have you pay some penalties.

Therefore, you must make an informed choice when it comes to CD terms.


Short-term CDs range from 3 months to a year. Usually 3 months, 6 months, and one year. Their rates are not as high as their long-term counterparts.


However, they are the most preferred in terms of flexibility. Their short maturity period will see you have access to your funds earlier.


Should the earned yields mature when you don’t have an immediate need for cash, you can as well reinvest them and build your ladder.


Long-term CDs range from 4 to 5 years. Some institutions may make arrangements for even higher terms.


Investing in these calls for great commitment and sacrifice.


They attract the highest rates and even higher penalties should you be tempted to withdraw before maturity.


Choosing which term to settle for depends on your reasons for saving. Long-term CDs are best for people looking to grow their savings significantly. Mostly those looking to buy a house, car, or any asset in the future.


Shor-term CDs, on the other hand, offer a high level of flexibility. If you have the money you can only afford to put away for a few months, then investing in short-term CDs would be an excellent idea.


You’ll be in an even better position if you choose to invest in both short-term and long-term CDs. You’ll have your money maturing at different times. This way, you can take advantage of higher market rates.

Hot Tip:

Let the earned yields mature when you don’t have an immediate need for cash. You can as well reinvest them and build your ladder.

Pros and Cons of CD rates for 3 year


Guarantee of payment – With CDs, you’re guaranteed payment upon maturity of your term. You’ll therefore know at the onset of the term how much you’ll earn upon maturity. Unlike the shares and stock market, there’s no room for uncertainties or worry of possible losses in the future.

Penalties – Unlike a traditional savings account, you cannot access your money anytime you need it. Withdrawing before maturity will cost you a couple of months’ worth of interest. CDs are, therefore, not suitable for saving money meant for emergency purposes.

Funds safetythe money you invest on CDs are insured by the Federal Government. They guarantee the safety of up to $250,000 of your invested cash. If you intend to buy CDs higher than $250k, it's advised that you get different CDs from different institutions for all-round safety.

Fixed rates – CD returns are fixed, and are calculated based on the present market rates. You’ll, therefore, miss out on any possible rise in the financial market after you’ve chosen a term.

Locked returnyou’ll receive your agreed interests at the end of the term whether or not there’s a fall. This, therefore, makes you immune to downward changes in market rates.

Low earningsshort-term CDs generally attract lower rates than long-term CDs.

A good savings planPlanning to buy a house, car, or just carry out any projects in the future? Then CDs are an excellent way to save and grow your income. Your money will also be safe from any possible institutional downsides and you’ll also not be affected by changes in the financial markets.

Requirements to Qualify

Opening a CD account involves a similar process as opening a traditional savings account.


The first step is often to find an institution with friendly requirements, go through their offers and choose the term you wish to take.


The primary requirements are that you should have attained the legal and should be a legal resident of the United States.


As proof, institutions will require you to show such documents as a National ID, valid driving Licence, or passport. You’ll also be required to provide such information as your name, address, and social security number.


In your list of potential institutions, prioritize banks and credit unions. They’re generally more friendly and offer better rates.


If for some reason you feel you may be forced to withdraw early, take a step to avoid forfeiting your accrued interests. Liquid and no penalty CDs are excellent options for curbing uncertainties.


Also, prioritize institutions that allow bump-up CDs – allowing your rates to change at certain intervals or upon request. The only difference between these and the traditional CDs is that they offer lower rates.


Many institutions dropped their rates in response to the Federal Government cut last year. However, CDs are still some of the safest and best ways to save and grow your money. 


So, the next time you have cash in lump-sum, a cash bonus, gift, retirement, etc., and you don’t intend on touching it for at least a year, consider saving on CDs.

Frequently Asked Questions (FAQ)

It’s a middle-term certificate of deposit that promises returns after maturity of the agreed term (3 years).

Anyone with money they don’t intend on touching for the next 3 years, looking to save and grow their savings.

The federal cut in 2021 had most institutions cut down on their rates. The trend might not be the same in 2021. These institutions are likely to offer more incentives inform of higher rates to earn a competitive place in the markets.

Yes. CDs are an excellent way to save and grow your money.

Yes. CDs are federally-insured, with any amount up to $250,000

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