Best 3-Month CD Rates

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 three-month CD is simply a certificate for which the maturity period or term is roughly 90 days. At most banks and credit unions, a three-month term is the shortest duration certificate they offer, while some don't offer any CDs shorter than six months.

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 deposit and withdraw funds at your convenience. Aside from a federal limit of only six withdrawals from a savings account in a month, the amount you withdraw (as well as how often you withdraw) is up to you. 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 significantly different. Because you must deposit a lump sum of funds at the outset and then not touch it until the maturity term expires, they are the opposite of liquid accounts. But what you lose in access to the funds is traded off for a higher interest rate, meaning you are compensated for giving up your at-will access.

Theoretically, certificates of deposit are a good vehicle for someone who wants to earn more interest by committing their funds for a set time. But in the case of three-month CDs, the time period is so short that the interest rate premium can slight, or even non-existent. In fact, you can often earn more with a high-yield savings account, which also doesn't require you to lock 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.

Across the thousands of banks and credit unions that offer three-month CDs, interest rates will vary widely. And rates across all kinds of deposit accounts will change based on the Federal Reserve's federal funds rate. So it pays to do your homework and shop around.

You can see that our current list of the top-paying three-month CDs far outperforms the national FDIC rate average of 0.61% APY for three-month certificates. It's not uncommon to be able to earn 5 to 10 times as much as 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.

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, as well as 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. Again, as little as $5 is often sufficient for this requirement.