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Best 3-Year CD Rates for December 2022

A three-year CD earns a higher APY compared with traditional savings and money market accounts at a time of persistently high inflation.

A certificate of deposit, or CD, is a type of savings account that earns interest on a lump sum of money at a fixed interest rate over a specific period of time, or term. CD terms provided by most banks and credit unions typically range from as short as three months to as long as five years. What makes a CD different from a traditional savings account is that the money in the account can't be withdrawn during the CD's term. If withdrawn prematurely, you'll face the prospect of incurring penalties such as fees or forfeited interest. As an incentive for keeping your money locked away in a CD, banks and credit unions will offer higher interest rates than on a savings account.

A CD can be purchased from most banks, credit unions and investment firms, and is an ideal savings option for investors looking to lock in a competitive annual percentage yield, or APY, and benefit from steady growth without risking loss of money deposited.

What is a 3-year CD?

Simply put, a three-year CD is a deposit account that matures in three years. Plunk $10,000 into a three-year CD that earns 4.00% APY, for example, and you'll accrue a total of $1,249 in interest. 

The APY on a CD is tied directly to the Federal Reserve's federal funds benchmark rate. As such, the average three-year CD currently has a 0.90% APY. Higher rates are available at many banks and credit unions, so you should shop around to find the most competitive CD rates. 

CNET's picks for the best 3-year CD rates

When evaluating a CD, compare more than just the APY rate. Understand the minimum deposit required, any penalties incurred if you withdraw the money before the CD reaches its maturity date and whether or not the CD will renew automatically.    

Best 3-year CD rates

Bank APY Minimum deposit
CFG Bank 4.60% $500
Merrick Bank 4.55% $25,000
Bread Savings 4.50% $1,500
Alliant Credit Union 4.50% $1,000
First Internet Bank 4.44% $1,000
Synchrony Bank 4.30% $0
Quontic Bank 4.30% $500
Ally 4.10% $0
Discover Bank 4.15% $2,500
PenFed Credit Union 4.05% $1,000

Note: APYs shown are as of Dec. 3, 2022. CNET's editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products.

More details on the top 3-year CD rates

CFG Bank
  • APY: 4.60%
  • Minimum deposit: $500
  • Early withdrawal penalty: 180 days of interest

Details: CFG Bank is a Maryland-based community bank that offers competitive rates on CDs, with a reasonable minimum deposit required to open accounts, making them accessible to a wide range of savers nationwide.

Merrick Bank
  • APY: 4.55%
  • Minimum deposit: $25,000
  • Early-withdrawal penalty: 90 days of interest

Details: Merrick Bank is the Utah-based, online arm of Cardworks -- a New York-based financial services firm. Merrick offers CDs, loans and credit cards. Its CDs provide highly competitive APYs, especially for shorter terms. It offers CDs in terms ranging from three months to five years. Merrick's CD accounts, however, require a significant initial deposit -- the highest on this list. This could put Merrick's CDs out of reach for some new savers.

Bread Financial
  • APY: 4.50%
  • Minimum deposit: $1,500
  • Early-withdrawal penalty: 180 days of simple interest

Details: Bread Savings is the online banking arm of Bread Financial. It offers competitive rates on savings and CDs with minimal fees associated with account transactions. Bread Savings is useful to pair with a more robust financial institution to access a savings account with more growth potential.

Alliant Credit Union
  • APY: 4.50%
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Dividends equal to the number of days the certificate has been open, up to 90 days

Details: Alliant Credit Union is an online credit union with great rates, a full suite of financial products and broad membership eligibility. Membership is open to current or former employees of Alliant's US partner businesses. Visit Alliant for a complete list of businesses.

First Internet Bank
  • APY: 4.44%
  • Minimum deposit: $1,000
  • Early-withdrawal penalty: 180 days of interest

Details: First Internet Bank of Indiana, the first online-only bank in the US, launched in 1999. This bank offers eight CD terms with competitive yields ranging from three months to five years. The minimum deposit of $1,000 is accessible to many savers, however, the early withdrawal penalty is much higher than competing banks. Savers should be certain that the money used to fund a CD from this bank can remain in place for the duration of the term to avoid high penalties.

James Martin/CNET
  • APY: 4.30%
  • Minimum deposit: $0
  • Early-withdrawal penalty: 90 days of interest

Details: Synchrony Bank is an online-only bank that takes advantage of limited overhead to offer attractive rates for deposit accounts. Transactions can be handled via its website or mobile app. Synchrony Bank has 11 types of CDs, including bump-up or no-penalty CDs that provide greater flexibility. You can also set up a CD ladder, which allows you to connect a series of CD accounts of varying terms to provide greater access to the deposits.

Quontic Bank
  • APY: 4.30%
  • Minimum deposit: $500
  • Early-withdrawal penalty: 24 months of interest

Details: Quontic Bank is an online-only bank headquartered in New York. The competitive rates and low minimum deposit make this an ideal option for all CD terms, ranging from six months to five years. Quontic has a fairly punitive early withdrawal penalty compared with other banks. 

Ally Bank
  • APY: 4.10%
  • Minimum deposit: $0
  • Early-withdrawal penalty: 60 days of simple interest

Details: Ally is another online-only bank that offers a robust set of deposit products, loans and services. The bank offers high-yield CDs that range from three months to five years, bump-up CDs that adjust to a higher APY (if available) and no-penalty CDs. You can handle all of your banking needs through its mobile app for free through the Allpoint ATM network. There are no fees with any of its accounts and it offers customers 24/7 support via phone, chat or email.

Sarah Tew/CNET
  • APY: 4.15%
  • Minimum deposit: $2,500
  • Early-withdrawal penalty: Three months of simple interest

Details: Discover Bank is an online financial services company that offers products such as deposit accounts, credit cards, personal loans and student loans. It eliminated fees on deposit accounts in June 2019. It offers a wide range of CD terms, from three months to 10 years. CD laddering, connecting multiple CDs with varying maturing dates, is possible to provide more flexible access to deposited funds.   

PenFed Credit Union
  • APY: 4.05%
  • Minimum deposit: $1,000
  • Early withdrawal penalty: Up to the last 365 days of dividends earned.

PenFed Credit Union offers membership that's available to everyone. It offers a full suite of deposit accounts. Its money market certificates, for example, have terms that range from six months to seven years. Certificates can be opened in person, online or through its mobile app that facilitates digital banking transactions.

FAQs

Why should I get a 3-year CD?

A CD is a savings product that offers higher rates of interest than traditional savings or money market accounts in exchange for agreeing not to access the funds for three years until the CD reaches its maturity date. You should purchase a three-year CD if you want to earn a higher rate of interest and can allow the money to remain undisturbed for at least three years.

How should I choose a 3-year CD?

There are several factors involved in choosing the best three-year CD to suit your financial needs. First, understanding the variety of CD types will help you decide what works best. Traditional CDs offer fixed terms, generally have strict maturity dates and don't allow you to modify the initial deposit after opening. Specialty CDs, such as bump-up and no-penalty CDs, offer greater flexibility. Interest rates between CD terms may differ. Decide what's more important, interest rates or flexibility, to help you make a decision.

Compare the interest rate and APY to find the highest earning option. Then, determine if there is a minimum deposit required. Next, select the fixed length of time, or term, that you want to purchase. The term should be no longer than when you estimate you'll need to access the funds to avoid any early withdrawal penalty. Finally, you'll need to understand if the CD offers an automatic renewal process only or lets you opt out to manage that process manually. In some cases, a CD will also allow you to determine when interest is dispersed. 

What are the fees and penalties associated with 3-year CDs?

Fees vary depending on the institution. Some banks advertise no fees. Others charge a fee if the account is closed before a set timeframe has elapsed. Most banks charge a penalty for withdrawing money in a CD before the maturity date has passed. The fee is generally based on a percentage of the interest earned.

Can I lose money purchasing a 3-year CD?

Unless you are purchasing a brokered CD offered by a brokerage account, CDs purchased through a bank or credit union are insured by the Federal Deposit Insurance Corporation or National Credit Union Administration for up to $250,000 per person. Any interest earned by the CD is also covered up to insured limits. 

Earnings can be reduced by early withdrawal penalties. 

What are alternatives to a 3-year CD?

CD terms can vary from as short as one month to as long as 10 years, however many banks and credit unions offer accounts ranging from three months to five years. Generally, CDs with longer terms of maturity pay higher interest rates. Savings and money market accounts are options that provide more flexibility when accessing deposited funds, but they generally earn less interest. Additionally, there are other safe savings accounts to consider, such as high-yield savings accounts or I bonds.

Methodology

CNET reviews CD rates based on the latest APY information from issuer websites. We evaluated CD rates from more than 50 banks, credit unions and financial companies. We selected the CDs with the highest APY for three-year terms from among the organizations we surveyed, and considered rates for shorter terms if three-year terms were identical or unavailable.

Banks surveyed include: Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank of the West, Bank5 Connect, Barclays, BMO Harris, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Citizens Access, Colorado Federal Savings Bank, Connexus Credit Union, Consumers Credit Union, Credit One Bank, Discover Bank, First Internet Bank of Indiana, First Tech Federal Credit Union, FNBO Direct, GO2bank, Golden 1 Credit Union, HSBC Bank, Huntington Bank, Lake Michigan Credit Union, LendingClub Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Merrick Bank, Nationwide (by Axos), Navy Federal Credit Union, NBKC, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Synchrony Bank, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Vio Bank, and Wells Fargo.

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