10 Best 3-month CD Rates in December 2024 To Boost Your Savings

Banks often reserve their highest APYs for certificates of deposit (CDs). That's because customers are committing to leaving funds untouched for some time, allowing the bank to use the money for other purposes. If you want to earn the highest rates for your savings, CDs often top even the best high-yield savings accounts.

If you're interested in a three-month CD, online banks and credit unions generally offer the most competitive rates. Here are the best three-month CDs available right now.

Best 3-month CD rates today

TotalDirectBank

TotalDirectBank CDs require a larger minimum deposit than other accounts on this list, but the online bank also offers the highest return on a 3-month CD. The bank offers CDs with terms ranging from three months to five years, with its short-term CDs, in particular, standing out for their extremely attractive annual percentage yields (APYs).TotalDirectBank is an online division of City National Bank of Florida, but anyone with a valid state-issued photo ID or U.S. passport can open an account.

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Merrick Bank

Merrick Bank is known more for its credit-building products like credit cards and loans, but it's also home to some of the industry's best CD rates. Its CDs are available in terms ranging from three months to five years. All of its CD terms currently offer competitive rates above 5.45%%. Opening a CD with Merrick Bank requires a $25,000 minimum opening deposit.

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iGObanking

iGObanking is an online division of New York-based Flushing Bank. The online bank has four high-yield CDs ranging from three months to four years. A $1,000 minimum opening deposit is required to open a CD with iGObanking. Interest is compounded daily and credited to your CD account monthly. iGObanking also offers online savings, checking, and money market accounts.

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Popular Direct

Popular Direct is another top pick for high-yield rates on CDs. The bank offers CD terms ranging from three months to five years, with a $10,000 minimum deposit required to open a CD through Popular Direct. All Popular Direct deposit products are offered by, and opened through, Popular Bank, an FDIC institution and a New York state-chartered bank.

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NexBank

NexBank has standard and promotional CDs available online. Promotional CDs are available in terms ranging from three to 12 months and require a minimum opening balance of $25,000 to $99,999. The bank also offers jumbo promotional CDs, which require a minimum opening balance of $100,000 or higher. To earn NexBank's promotional CD rates, the account must be funded with new money, not funds from an existing NexBank CD account. However, the bank's standard three-month CD earns a slightly higher APY than its promotional counterpart and only requires a minimum deposit of $10,000.

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Wells Fargo

Big banks aren't traditionally known for offering competitive interest rates on deposit accounts. Wells Fargo is an exception. The bank offers a range of CDs that earn attractive returns. Rates vary between CD term offerings, with the bank's seven and 11-month special fixed rate CDs currently earning the highest APYs. Wells Fargo special fixed rate CDs require a $5,000 minimum opening deposit, but you can open a standard CD, like its three-month CD, with a $2,500deposit. Note that CD rates may vary depending on your location.

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Alliant Credit Union

Alliant Credit Union is an online credit union. To open one of its CDs you must be a member, which is an option only available to people who work for an eligible employer, live in certain parts of Illinois, join Foster Care to Success, or are closely related to a current member. Alliant CDs require a $1,000 minimum deposit. The online credit union offers several CD terms from three months to five years. It also offers Jumbo CDs for balances of $75,000 or higher and one of the highest CD APYs right now.

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First Internet Bank

First Internet Bank is among the oldest online banks and offers some of the best CD rates on the market. Its three-month CD earns a respectable 4.18% APY and only requires a $1,000 minimum deposit to open. First Internet Bank CDs range from three months to five years. The online bank also offers a range of other products.

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EverBank

EverBank offers a competitive yield and a small minimum deposit requirement of $1,000. Terms range from three months to five years, and you can choose when to withdraw interest at the time of account opening. EverBank CDs automatically renew at maturity but come with a 20-day maturity alert, giving you time to decide whether you want to renew, withdraw funds, or open another CD.

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Live Oak Bank

Live Oak Bank is known for its small business banking services but also offers savings and CD accounts to personal customers. Its three-month CD earns a competitive APY and can be opened with a minimum deposit of $2,500. Like most banks, Live Oak doesn't charge a monthly fee. Also, customers can choose automatic monthly interest distributions if they want.

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Methodology

To pick the best three-month CDs, we employed a comprehensive approach. Firstly, we completed a thorough comparison of interest rates across various banks and credit unions, prioritizing those offering the highest APY for our chosen term.

In addition to rates, we considered the following factors:

• Deposit requirements
• Early withdrawal penalties
• Account features
• Insurance coverage
• Renewal options
• Grace periods
• Compounding schedules
• Customer service
• Reputation of the financial institution

Ease of use and account opening processes were also considered, giving preference to CD accounts that could be opened online.

How to select the best CD account for you

There are several factors to consider when deciding which CD account is best for you. Here are some considerations to make when choosing a CD.

• Rates: Finding the highest rates will help maximize your earnings on a CD.
• CD Term: CD terms range from as short as one month to five or 10 years. Determine how much time you're willing to keep funds tied up in a CD to narrow down your choices.
• Fees: Banks do not charge monthly fees on CDs but often charge an early withdrawal penalty if you withdraw funds from them before the maturity date. If there is a possibility you might need early access, look for CDs with lower penalties or choose a shorter term.
• Deposit requirements: Minimum deposit requirements for CDs vary from bank to bank. Determine how much you want to deposit into a CD account.
• CD type: Banks and credit unions sometimes offer more than one type of CD. Other than standard CDs, options can include bump-up CDs, no-penalty CDs, special CDs, and IRA CDs.

What happens if you take your money out of a CD early?

CDs typically offer higher rates to compensate for the fact that the customer has agreed to lock in the principal for a predetermined period. However, financial institutions will charge an early withdrawal penalty if you withdraw funds before the CD reaches maturity.

Early withdrawal penalties can vary and are typically a specific number of days of earned interest based on your CD term length. Longer CD terms usually carry higher penalty fees.

Alternatives to 3-month CDs

A short-term CD, like a three-month CD, allows you to earn interest over a shorter period of time but isn't the only option available. Consider the following alternatives to three-month CDs.

High-yield savings accounts

High-yield savings accounts (HYSAs) offer competitive rates that rival some CDs. Typically found at online banks, HYSAs are often marked by low or no monthly fees. Also, the government lifted Fed D transaction limits on savings accounts in 2020, making funds more accessible. Some banks still impose transaction limits, but many do not.

Money market accounts

Money market accounts are hybrid accounts with savings and checking features. Banks sometimes require larger minimum deposits to open a money market account or earn interest but compensate customers through higher rates. Many money market accounts come with debit cards and check-writing privileges.

Long-term CDs

While it’s not always the case, you may be able to earn a higher interest rate if you're willing to keep your money tied up in a CD longer. If you don’t need the money for a while and longer-term CDs offer more attractive rates, it might be worth signing up for a longer term.

Dividend stocks

Stock market investments carry more risk than CDs but also offer a higher potential upside. Companies that regularly pay a portion of their profits to shareholders in the form of dividends are often referred to as dividend stocks.

If you’re willing to assume the risk, you could see higher returns by investing in stocks. But you could also lose money. For the majority of investors, stocks should only be considered a long-term holding.

TIME Stamp: 3-Month CDs can help you save for short-term goals

Three months is a relatively short time. However, with the CDs on our list, it’s enough time to earn a decent return on your deposits. Online banks often have the highest interest rates, but it is worth comparing them to credit unions and other financial institutions to find the best CD for your needs.