Best 3-Month CD Rates of June 2024

What is a 3-month CD?

A certificate of deposit, or CD, is a type of savings account you can open at a bank. Once you put money into the CD account, the bank agrees to pay you a certain amount of interest. However, to earn the interest as agreed, you typically have to keep the money in the account for a set term, such as three, six, nine or 12 months. 

The best CDs often provide access to higher interest rates than traditional savings accounts, but they are a secure and safe investment. As such, they tend to appeal to risk-averse investors who would like to earn more than they can get in a savings account but don’t want to risk funds in the stock market or other investments. 

How do 3-month CD rates work?

A three-month CD requires a three-month term. That means that you put money into the deposit account and keep it there for three months. During those three months, you will earn the advertised three-month APY on the account. This means you have a guaranteed interest as long as you keep the money in the account.

Typically, the APY offered on these accounts is significantly higher than what you can get with a traditional savings account. However, if you withdraw money out of the account before the maturity date — three months or 90 days from the date you opened it — you could pay penalties or lose some of your interest earnings. 

Current short-term CD rates

The best three-month CD rates currently tend to be above 5%. According to the Organization for Economic Co-operation and Development (OECD), the rates for three-month CDs have increased since 2021. In May 2021, the average rate was around 0.10%. In December 2023, rates were above 5%. 

Pros and cons of 3-month CDs

As with any other banking product, short-term CDs come with advantages and disadvantages:

How to choose the best 3-month CD

When researching CD investment options, consider the following factors. 

APY

APY refers to how much you will earn in interest on your deposit. Currently, the best three-month CD rates tend to be between 5% and 5.75%. 

Consider the table below to understand how much you can earn at various APY with a $10,000 CD deposit:

Early withdrawal penalty

Some banks charge an early withdrawal penalty if you take any funds out of your CD before the maturity date. In the case of a three-month CD, that means you might pay a penalty if you make a withdrawal in the first 90 days. If you want to ensure easy access to your funds without paying a penalty, look for CD accounts that don’t charge a fee or charge only a small fee.

Compounding schedule

Interest on CD accounts compounds monthly or daily. Daily compounding tends to result in slightly higher earnings, but it’s only noticeable if you have a large deposit balance. Even so, it’s a good idea to opt for an account that compounds daily whenever you can.

Safety

Choose a bank that you’re comfortable with when it comes to the security of your information and funds. Read reviews, check reports to the Better Business Bureau and select a bank that is FDIC-insured for ample peace of mind.

Minimum deposit requirement

Review the requirements for minimum deposit amounts. Some banks only offer high-yield CD accounts when you can deposit a certain amount, such as $5,000 or $10,000 or more. Other banks offer these accounts with no minimum requirements — the amount you have on hand to deposit will help decide which account is right for you.

CD term

Review the CD term before you deposit your funds. A three-month CD has a term either for three months or 90 days — this can make a difference of a few days in the actual maturity date for the CD. Ensure you know when your maturity date is so you don’t accidentally withdraw funds before then.

How to open a 3-month CD

To open an account with the best three-month CD rates:

Are 3-month CDs worth it?

Because three-month CD rates are much higher than the national average for traditional savings accounts, they can be a good option for putting your money to work when you know you won’t need it right away. Short-term CDs can be an easy way to earn interest on savings that you will need later in the year, as they don’t tie your money up for many months.

For example, a high-school student who has graduation gift money could invest it in a short-term CD and have access to the principal and interest earnings before the end of their first college semester. Or, someone looking to buy a home in a few months could dock their savings in a CD to hold it safe and steady while earning a bit more money to add to their down payment fund.

Alternatives to a 3-month CD

Many other savings options exist. Consider some alternatives to three-month CDs below. 

Other CD terms

If you can keep your money in a CD longer without needing it, you might consider other CD terms. Average 90-day CD rates tend to be similar to three-month CD rates, but you can also research options for six-month CDs and CDs with terms of several years to see how much you might save.

Typically, long-term CDs, like one-year CDs, outperform the rates available with short-term CDs. However, in some markets, short-term rates are often higher on average. 

Savings accounts

Traditional savings accounts allow you to earn interest on your deposits while offering more access to your money. Some savings accounts even allow you to make withdrawals at ATMs. 

The average savings account APY is under 1% — and some banks only offer a fraction of a percentage point in APY. However, you can find high-yield savings accounts that offer 3% to 5% APY, even without a minimum deposit amount. 

Money market accounts

Money market accounts are like a cross between savings and checking. The best money markets typically offer interest rates that are higher than most checking accounts and provide some check-writing capabilities. Average high-yield money market interest rates currently tend to run between 2% and 5%.