Best 3-Year CD Rates for February 2025: APYs up to 4.86% (original) (raw)
With rates expected to fall later in the year, the experts interviewed by the MarketWatch Guides team said now is the time to lock in high yields on CDs.
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4.4
Term 1 Year
APY 4.00%
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4.4
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APY 3.80%
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4.4
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APY 4.25%
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Learn more about the highest CD rates.
Best 3-Year CD Rates for February 2025
- Quontic Bank – 3.25% APY
- BMO Alto – 3.70% APY
- First National Bank of America – 3.90% APY
- First Internet Bank – 3.77% APY
- Popular Direct – 3.40% APY
To decide the best three-year CD rates, we looked at over 100 financial institutions. We focused on three-year CDs with high APYs and low minimum deposit requirements. We also looked at the overall banking experience and only considered accounts that are insured through the National Credit Union Administration (NCUA) or the Federal Deposit Insurance Corp. (FDIC). Learn more about our rating methodology.
Rates accurate as of November 14, 2024.
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The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing.
Highest 3-Year CD Rates Today
These are the highest-paying 3-year CDs for February 12, 2025.
| Institution | Rate (APY) | Term |
|---|---|---|
| Merchants Bank of Indiana | 4.86% | 3 years |
| Alliance Bank Central Texas | 4.73% | 3 years |
| Extraco Banks | 4.50% | 3 years |
| Sterling Bank | 4.35% | 3 years |
| KS StateBank | 4.30% | 3 years |
| Raymond James Bank | 4.30% | 3 years |
| Dakota Community Bank & Trust | 4.20% | 3 years |
| Toyota Financial Savings Bank | 4.25% | 3 years |
| NVE Bank | 4.25% | 3 years |
| Incommons Bank | 4.20% | 3 years |
Is Now the Right Time To Open a 3-Year CD?
Now is an excellent time to open a three-year CD. While CD rates have dropped slightly in 2024, they’re still at some of their highest levels in more than 15 years. Our experts predict rates will fall later in the year.
Expert Advice
“For those considering CDs as an investment, the window to secure a good rate might be narrowing. Securing a CD sooner rather than later could lock in higher returns before rates drop.”
Taylor Kovar CFP, CEO and Founder 11 Financial
Expert Advice
“If you’ve been eyeing CDs as an investment, you still have some wiggle room to snag decent rates, but don’t dilly-dally too long. Since CD rates are expected to keep slipping in 2024, it’s wise to lock in a rate sooner rather than later to avoid losing out on better deals.”
Shawn Carpenter CEO Stock Alarm
Expert Advice
“The most important benefit of a long-term CD is that you have the predictability of knowing what interest you will earn, for a longer period of time. That predictability is worth a lot to some people, especially if they have a long-term goal that needs a predictable outcome,”
Renee Stene Financial Advisor and Founder Weddington Advisors
Expert Advice
“For those considering CDs as an investment, the window to secure a good rate might be narrowing. Securing a CD sooner rather than later could lock in higher returns before rates drop.”
Taylor Kovar CFP, CEO and Founder 11 Financial
“If you’ve been eyeing CDs as an investment, you still have some wiggle room to snag decent rates, but don’t dilly-dally too long. Since CD rates are expected to keep slipping in 2024, it’s wise to lock in a rate sooner rather than later to avoid losing out on better deals.”
Shawn Carpenter CEO Stock Alarm
“The most important benefit of a long-term CD is that you have the predictability of knowing what interest you will earn, for a longer period of time. That predictability is worth a lot to some people, especially if they have a long-term goal that needs a predictable outcome,”
Renee Stene Financial Advisor and Founder Weddington Advisors
In our recent MarketWatch Guides CD survey of 1,000 Americans, respondents told us the main reason they opened a CD was to take advantage of high interest rates.
What Is a 3-Year CD?
A three-year CD is a savings option that traditionally lets you make an opening deposit and get a fixed interest rate for three years. Because market rates are expected to drop in 2024, shorter-term CDs typically have higher APYs than three-year terms. If you make an early withdrawal of principal, you’ll likely pay a penalty unless you have a flexible or no-penalty CD.
Benefits of 3-Year CDs
Three-year CDs are beneficial for those who don’t like risk and prefer a modest, stable return. Their safety comes from features such as NCUA or FDIC insurance and fixed rates, meaning there’s no threat of market issues hurting your account balance.
Since you’ll know your guaranteed rate for the next three years, you can easily calculate your savings’ increase and not worry about falling rates if something changes in the economy.
Fixed vs. Variable Rates
Most three-year CDs pay a fixed interest rate through maturity. But if you prefer future rate increases, look for bump-up and step-up CDs. Bump-up CDs give you the option to ask for at least one rate hike if your bank advertises a better rate during your term. Step-up CDs have set rate changes at certain intervals.
Whether your rate is fixed or variable, find out how often the bank compounds interest since this makes a small difference in earnings.
Average 3-Year CD Rates
The national average interest rate for a three-year CD is rather low at 1.91%, but our top picks pay at least three times this rate. While your rate is fixed once you have the account, you’ll find that three-year CD rates in the market widely vary. Here are some factors that impact CD rates:
- Economic conditions, including market stability and inflation levels
- The Federal Reserve’s decisions to lower or raise the federal funds rate, which affects what banks pay for overnight loans
- Account promotions, balance requirements or customer loyalty benefits
- Bank competition and the need for deposits
Minimum Opening Deposit and Balance Requirements
Ensure you can afford the minimum amount to open your three-year CD account. If the account has balance tiers, check how much you need to get a good APY.
Some banks charge a year or more of interest for withdrawing any part of your initial deposit from a three-year CD, so you should also find out what the penalties are for any CDs you’re interested in. Also research whether the CD options you’re considering let you withdraw interest early without penalties.
Alternatives To 3-Year CDs
Even if a three-year CD sounds appealing, a different CD term or an alternative deposit account may better fit your needs, especially if you’ll avoid early withdrawal penalties.
| 3-Year CDs | High-Yield Savings Accounts | Money Market Accounts | Bonds | |
|---|---|---|---|---|
| Type of investment | Time deposit | Savings account | Savings account | Debt security |
| APY | Typically fixed | Variable | Variable | Fixed or variable |
| Timeline | 3 years | No fixed term | No fixed term | Fixed term |
| Risk | Low | Low | Low to moderate | Low to moderate |
| Ease of access | Limited access until maturity | Immediate access | Immediate access | Varies depending on the bond type and market conditions |
| Initial deposit | Varies | Typically low | Typically low | Varies |
| Insured by the FDIC or the NCUA | Typically | Typically | Typically | No |
The Bottom Line: Is a 3-Year CD Right For You?
A three-year CD may be right for you if your financial goal is at least three years away. With high rates from our top picks, a CD can be a safe option for growing your money with predictability.
But consider your personal finance needs and the potential drawbacks of long-term CDs, such as high deposit requirements or penalties if you need to withdraw your money early.
FAQ: 3-Year CD Rates
Based on the national averages from the FDIC, a three-year CD pays a lower rate than most short-term CDs. When compared to CD rates for four- or five-year terms, three-year CDs rates are about the same.
You can expect your financial institution to offer a grace period when your three-year CD matures. During this period of time, you can redeem your CD, renew it or make changes to reinvest the money. Some banks may automatically renew the CD if you don’t do anything.
Most financial institutions allow early withdrawals from a three-year CD, but you’ll often pay a penalty. There may also be a waiting period. If you think you might need to withdraw your money early, you may want to consider a shorter-term CD or a no-penalty CD to avoid early withdrawal fees.
Methodology
Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.
For our list of the best three-year CD rates, we selected the highest-scoring financial institutions in our review of CDs. These banks and credit unions provide CD products available to customers throughout the U.S. and earn high scores for offering low or no minimum opening deposit and competitive yields on three-year terms.
For the banks that we opened CDs with, we provided at least the minimum deposit and measured the speed and thoroughness of the account-opening process. We evaluated the ease of use of the account website, the speed of our deposit to fund the account, the rewards and features available to account holders and our experience with customer service chat and phone options.
Savings and money market accounts
The best scores go to banks, loans and fintech companies with high interest rates and low or no fees or minimum opening deposits.
High marks are given to those with multiple accounts and minimal fees, plus benefits such as reward programs and mobile check deposit.
Top-rated financial institutions have low or no minimum opening deposits, as well as a variety of term options and specialty CDs for flexibility.
Banking experience and access
Providers that excel in this category have large branch and ATM networks and multiple checking and savings accounts, and they earn more points for offering CDs and money market accounts.
35% Savings and money market accounts
30% Checking accounts
20% Certificates of deposit
15% Banking experience and access
Savings and money market accounts
The best scores go to banks, loans and fintech companies with high interest rates and low or no fees or minimum opening deposits.
Checking accounts
High marks are given to those with multiple accounts and minimal fees, plus benefits such as reward programs and mobile check deposit.
Certificates of deposit
Top-rated financial institutions have low or no minimum opening deposits, as well as a variety of term options and specialty CDs for flexibility.
Banking experience and access
Providers that excel in this category have large branch and ATM networks and multiple checking and savings accounts, and they earn more points for offering CDs and money market accounts.
Rates accurate as of November 14, 2024
**Data accurate at time of publication
*Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Weddington Advisors and Great Valley Advisor Group are separate entities from LPL Financial.
Certificates of Deposit are FDIC insured and offer a fixed rate of return if held to maturity. There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. The purchase of certain securities may be required to effect some of the strategies. Investing involves risks including possible loss of principal.
Editor’s Note: Parts of this story were auto-populated using data from Curinos, a research firm that collects data from more than 3,600 banks and credit unions. For more details on how we compile daily rate data, check out our methodology here.
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