What Is a 3-Month CD?

A certificate of deposit is a type of bank account that involves an agreement between a financial institution and an individual. The individual agrees to deposit a sum of money and keep it at the institution for a predetermined number of months or years. In exchange, the bank or credit union agrees to pay the account holder a higher interest rate than if they put the funds into a simple savings account. A 3-month CD is therefore a certificate for which the maturity period or term is roughly 90 days. At most banks and credit unions, a 3-month term is the shortest certificate duration they offer, while some institutions don't offer any CDs shorter than six months.

What Are the Differences Between CD, Savings, and Money Market Accounts?

Savings accounts , money market accounts, and CDs are collectively called deposit accounts. All are intended as vehicles for holding cash savings at a bank or credit union. Savings accounts and money markets are more similar, while certificates of deposit are somewhat different. A savings account allows you to withdraw funds at your convenience. The same is true for deposits: You can deposit a lump sum all at once, automate savings deposits on a regular cycle, or sporadically add funds when you have them available. An account that allows you to deposit and withdraw funds at will is called a liquid account. Money market accounts are another type of liquid account, with the main difference being that money market accounts traditionally include check-writing privileges. Certificates of deposit are quite a bit different. Because you must deposit a lump sum of funds at the outset and then not touch it until the term expires, they are the opposite of liquid accounts. But what you lose in access to the funds is traded for a higher interest rate, meaning you are compensated for giving up your at-will access.

Who Benefits From a 3-Month CD the Most?

Theoretically, certificates of deposit are a good vehicle for someone who wants to earn more interest by committing their funds for a short time. But in the case of 3-month CDs, the time period is so brief that the interest rate premium can be quite slight, or even nonexistent. In fact, you can often earn more with a high-yield savings account, which doesn't require you to tie up your funds. Still, some people may benefit from committing their savings to a CD instead of putting it in a liquid account. That's because making the funds inaccessible can be a benefit for savers who might otherwise be tempted to dip into their savings for an unplanned purchase.

What Are the Typical Rates for a 3-Month CD?

Across the thousands of banks and credit unions that offer 3-month CDs, interest rates vary widely. And rates across all kinds of deposit accounts change based on the Federal Reserve's federal funds rate . So it pays to do your homework and shop around. The FDIC national rate average for 3-month certificates is 1.42% APY. As you can see, our current ranking of the top-paying 3-month CDs far outperforms that average. In fact, it's not uncommon to be able to earn three to five times as much—and sometimes more—than the national average when you shop for the best rates and are open to institutions with whom you may not already have a banking relationship.

How Do I Join One of the Credit Unions on the List?

Credit unions differ from banks in that customers must be members of the credit union to open accounts there. Fortunately, joining a credit union is generally fairly easy to do, and it's often inexpensive or even free. For the purposes of our nationwide rankings, all included credit unions must offer an avenue for any adult U.S. citizen to become a member regardless of where they live or work. Joining often involves making a small donation to an affiliated nonprofit organization—sometimes donating as little as $5—and keeping a small minimum balance in a member savings account (most typically $5). For some credit unions, joining incurs no fee or donation at all.

Best 3-Month CD Rates for November 2023

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TotalDirectBank – 5.66% APY

Term (months): 3
Minimum deposit: $25,000
Early-withdrawal penalty: 1 month of interest
About: TotalDirectBank is an online-only operation of City National Bank of Florida, established in Miami in 1946.

Bayer Heritage Federal Credit Union – 5.65% APY

Term (months): 3
Minimum deposit: $100
Early withdrawal penalty: Lesser of all earned interest or 1 month of interest on the amount withdrawn
Membership: Anyone can join Bayer Heritage FCU, headquartered in New Martinsville, West Virginia, by joining the American Consumer Council at no cost.

Dow Credit Union – 5.65% APY

Term (months): 3
Minimum deposit: $500
Early withdrawal penalty: 3 months of interest
About: Based out of Midland, Michigan, anyone can join Dow Credit Union by making a $10 donation to the Midland Area Community Foundation scholarship fund during the membership application process.

Signature Federal Credit Union – 5.55% APY

Term (months): 3
Minimum deposit: $500
Early-withdrawal penalty: 45 days of interest
Membership: Anyone can join Signature Federal by agreeing to a free membership in the nonprofit American Consumer Council and holding at least $5 in a savings account.

iGObanking – 5.35% APY

Term (months): 3
Minimum deposit: $1,000
Early withdrawal penalty: 3 months of interest
About: iGObanking is an online banking division of Flushing Bank, which operates 19 branches in New York state.

Interior Federal Credit Union – 5.22% APY

Term (months): 3
Minimum deposit: $500
Early withdrawal penalty: 1 month of interest
Membership: Anyone can join Interior Federal by signing up for a free membership in the New Mexico Wildlife Federation and keeping $25 or more in a savings account.

Merrick Bank - 5.15% APY

Term (months): 3
Minimum deposit: $25,000
Early-withdrawal penalty: 3 months of interest
About: While primarily a credit card issuer and consumer finance provider, Merrick Bank also offers online-only certificates of deposit.

All In Credit Union – 5.12% APY

Term (months): 3
Minimum deposit: $1,000
Early-withdrawal penalty: 3 months of interest
Membership: Anyone can join All In by signing up for a free membership in the Fort Rucker/Wiregrass Chapter of the Association of United States Army, keeping at least $5 in a savings account, and paying a one-time fee of $1.

Brilliant Bank – 5.10% APY*

Term (months): 3
Minimum deposit: $1,000
Early withdrawal penalty: Half the interest that would have been earned if held to maturity
About: Brilliant Bank is an online-only division of FDIC-insured Equity Bank, which operates branches in Arkansas, Kansas, Missouri, and Oklahoma.

*Online accounts from Brilliant Bank are not available to residents of Arkansas, Kansas, Missouri, and Oklahoma.

Popular Direct – 5.10% APY

Term (months): 3
Minimum deposit: $10,000
Early-withdrawal penalty: 3 months of interest
About: Popular Direct is the online-only arm of Popular Bank, the U.S. banking subsidiary of Popular Inc., which serves banking customers in the U.S., Puerto Rico, and the Caribbean.

Pen Air Federal Credit Union – 5.00% APY

Term (months): 3
Minimum deposit: $500
Early withdrawal penalty: 3 months of interest
Membership: Anyone can join Pen Air Federal Credit Union by agreeing to a free membership in Friends of the Navy Marine Corps Relief Society and keeping at least $25 in a member savings account.

Farmers Insurance Federal Credit Union – 5.00% APY

Term (months): 3
Minimum deposit: $1,000
Early-withdrawal penalty: Complex formula with a minimum penalty of 3 months' interest
Membership: Anyone can join Farmers Insurance Federal Credit Union by agreeing to a free membership in the nonprofit American Consumer Council and keeping at least $5 in a savings account.

NexBank – 4.80% APY

Term (months): 3
Minimum deposit: $10,000
Early-withdrawal penalty: 1 month of interest
About: Founded in 1934, NexBank operates three branches in Dallas and serves customers nationwide with online banking.

Allegacy Federal Credit Union – 4.75% APY

Term (months): 3
Minimum deposit: Any amount
Early-withdrawal penalty: 3 months of interest
Membership: Membership is available to anyone nationwide who joins the American Consumer Council, which costs $8, and maintains a $5 balance in a savings account.

Lake Michigan Credit Union – 4.75% APY

Term (months): 3
Minimum deposit: $500
Early-withdrawal penalty: 3 months of interest
Membership: Anyone who lives, works, or worships in Michigan's lower peninsula or in Florida is automatically eligible for membership. U.S. citizens located elsewhere may become eligible by contributing $5 to the Amyotrophic Lateral Sclerosis (ALS) Foundation.

Umbrella Bank – 4.75% APY

Term (months): 3
Minimum deposit: $10,000
Early withdrawal penalty: Complex formula, with a minimum penalty of 1% of the amount withdrawn
About: An internet-only arm of Beal Bank, which operates seven physical branches across Texas, California, Ohio, and Pennsylvania, Umbrella Bank serves customers nationwide.

Important

Be sure to consider the interest rates of 3-month CDs in comparison to the best-paying high-yield savings accounts. Though traditional savings accounts generally pay minimal interest, high-yield savings accounts can pay rates higher than those of a 3-month CD while not requiring you to give up access to your funds.

Pros and Cons of 3-Month CDs

Pros

Extremely safe and predictable
Can help deter spending temptations
Gives you options after just a short commitment
May pay a higher APY than a standard savings account

Cons

Withdrawing early will trigger a penalty
May pay a lower APY than high-yield accounts that allow withdrawals
In a short time, you'll need to decide again about what to do with your funds

Pros Explained

Extremely safe and predictable: CDs opened at FDIC banks and NCUA credit unions are federally insured, protecting up to $250,000 of your deposit in the unlikely event that the institution fails. In addition, since the CD's rate is fixed for the 3-month term, your earnings are completely predictable.
Can help deter spending temptations: Putting money in a 3-month CD instead of just keeping it in a savings account can be a useful tool for blocking the temptation to spend your savings on an unplanned purchase.
Gives you options after just a short commitment: You only have to wait three months before you can access your funds again and make a new choice with your money. Perhaps rates have climbed and now you can open another CD with a higher APY. Or maybe you want to use the cash now or keep it in a liquid savings account for a near-term expense.
May pay a higher APY than a standard savings account: You'll be able to earn more with a 3-month CD than by keeping money in your checking account, and you may be able to outearn your bank's savings account rate as well.

Cons Explained

Withdrawing early will trigger a penalty: Anytime you cash in a CD before maturity, you'll be hit with an early withdrawal penalty. Each bank and credit union has a stated policy on how they calculate their penalty, with the most typical practice being a number of months of forfeited interest.
May pay a lower APY than high-yield accounts that allow withdrawals: Though longer-term CDs usually pay more than high-yield savings accounts, short 3-month CDs often do not. So if you can earn as much or more with a savings account, that may be a better option, as it keeps your money accessible.
In a short time, you'll need to decide again about what to do with your funds: With a 3-month CD, you go through the process of opening the CD and then, in just three months, have to decide all over again where to put your money.

Alternatives to 3-Month CDs

Savings or Money Market Accounts

Instead of locking up your funds in a 3-month CD, you could just hold them in a liquid savings or money market account. That way you can access the funds if you need them. Just be sure to shop around for a great high-yield rate that matches or beats what you can earn with a 3-month CD.

Also, be aware that the rates paid on savings and money market accounts are variable, meaning the bank can lower them anytime they want. A CD's rate, in contrast, is fixed for the full term, though in the case of a 3-month certificate, your return is not secured for very long.

Longer-Term CDs

Instead of a 3-month CD, you could stretch to a 6-month or 1-year certificate, or an even longer term, depending on how long you feel you can live without your funds. The advantage is that you can almost always find a better rate on slightly longer CDs, since the 3-month term is typically the worst-paying CD duration.

Treasury Bills

Another short-term option you can consider instead of a 3-month CD is a U.S. Treasury bill. T-bills allow you to lend money to the U.S. government for a short, fixed amount of time. Considered one of the safest investments in the world, T-bills offer durations ranging from four weeks to one year.

Frequently Asked Questions

What Is a 3-Month CD?

A certificate of deposit is a type of bank account that involves an agreement between a financial institution and an individual. The individual agrees to deposit a sum of money and keep it at the institution for a predetermined number of months or years. In exchange, the bank or credit union agrees to pay the account holder a higher interest rate than if they put the funds into a simple savings account.
A 3-month CD is therefore a certificate for which the maturity period or term is roughly 90 days. At most banks and credit unions, a 3-month term is the shortest certificate duration they offer, while some institutions don't offer any CDs shorter than six months.
What Are the Differences Between CD, Savings, and Money Market Accounts?

Savings accounts, money market accounts, and CDs are collectively called deposit accounts. All are intended as vehicles for holding cash savings at a bank or credit union. Savings accounts and money markets are more similar, while certificates of deposit are somewhat different.
A savings account allows you to withdraw funds at your convenience. The same is true for deposits: You can deposit a lump sum all at once, automate savings deposits on a regular cycle, or sporadically add funds when you have them available.
An account that allows you to deposit and withdraw funds at will is called a liquid account. Money market accounts are another type of liquid account, with the main difference being that money market accounts traditionally include check-writing privileges.
Certificates of deposit are quite a bit different. Because you must deposit a lump sum of funds at the outset and then not touch it until the term expires, they are the opposite of liquid accounts. But what you lose in access to the funds is traded for a higher interest rate, meaning you are compensated for giving up your at-will access.
Who Benefits From a 3-Month CD the Most?

Theoretically, certificates of deposit are a good vehicle for someone who wants to earn more interest by committing their funds for a short time. But in the case of 3-month CDs, the time period is so brief that the interest rate premium can be quite slight, or even nonexistent. In fact, you can often earn more with a high-yield savings account, which doesn't require you to tie up your funds.
Still, some people may benefit from committing their savings to a CD instead of putting it in a liquid account. That's because making the funds inaccessible can be a benefit for savers who might otherwise be tempted to dip into their savings for an unplanned purchase.
What Are the Typical Rates for a 3-Month CD?

Across the thousands of banks and credit unions that offer 3-month CDs, interest rates vary widely. And rates across all kinds of deposit accounts change based on the Federal Reserve's federal funds rate. So it pays to do your homework and shop around.
The FDIC national rate average for 3-month certificates is 1.42% APY. As you can see, our current ranking of the top-paying 3-month CDs far outperforms that average. In fact, it's not uncommon to be able to earn three to five times as much—and sometimes more—than the national average when you shop for the best rates and are open to institutions with whom you may not already have a banking relationship.
How Do I Join One of the Credit Unions on the List?

Credit unions differ from banks in that customers must be members of the credit union to open accounts there. Fortunately, joining a credit union is generally fairly easy to do, and it's often inexpensive or even free.
For the purposes of our nationwide rankings, all included credit unions must offer an avenue for any adult U.S. citizen to become a member regardless of where they live or work. Joining often involves making a small donation to an affiliated nonprofit organization—sometimes donating as little as $5—and keeping a small minimum balance in a member savings account (most typically $5). For some credit unions, joining incurs no fee or donation at all.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs to customers nationwide, and determines daily rankings of the top-paying certificates in every major term. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the CD's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.

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