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Best 3-Month CD Rates February 2024

The best 3-month CDs or Certificates of Deposit are often the top choice when comparing investment options. In addition to locking in funds for 3 month at a fixed interest rate, these CDs often offer higher yields than national averages, ensuring consistent returns without fluctuating rates.

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Overview

Initially launching as a credit card company, Discover was created by Sears in 1985. Since then, the company has branched out into a fully-fledged financial institution and is one of the biggest financial brands in America. Discover provides online banking services, personal loans, student loans, and mortgages, all alongside its famous Diners Club credit card offering.

Currently based in Riverwoods, Illinois, Discover has more than 50 million customers in the US and over 17,000 employees. The financial powerhouse offers all the benefits of a full-service bank with an excellent online presence and top-quality customer service.

Discover is a public company: stock ticker NYSE: DFS

Pros

pros iconDaily compounding interest

pros iconMany term options

pros iconLonger terms earn higher APYs

Cons

cons icon$2,500 minimum deposit

cons iconAutomatic renewal upon maturity

  • $3K Min. deposit
  • 2.00% 3-Month APY
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Overview

Synchrony is a premier consumer financial services company born out of GE capital and an independent entity as of 2014. With its original roots going back to 2003, this Stamford, Connecticut-based company specialized in offering a wide range of credit products. They partner with many national and regional retailers, local merchants, manufacturers, industry associations, and healthcare service providers to tailor their credit solutions for varying consumer needs. They have extensive industry knowledge and innovative solutions, providing a strong commitment to their partnerships. Synchrony’s edge lies in understanding the distinct financial needs of its consumers and bridging the gap

Pros

pros iconVariety of CD terms

pros iconCompetitive rates

pros iconNo-Penalty and Bump-Up CDs each only have one term

pros iconNo minimum deposit

Cons

cons iconNo terms over 5 years

  • No minimum Min. deposit
  • 2.05% 3-Month APY
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Overview

Alliant Bank has operated under its existing brand since December 2003. However, the company’s history can be dated back to 1888. With five physical branches in Northern and Central Missouri, Alliant Bank offers both online personal and business banking. The financial company is also a full-service bank registered with the FDIC. Alliant Bank’s ethos is firmly built around community partnership and working together with its customers on a personal basis.

Alliant Bank is a public company: stock ticker NASDAQ: LNT

Pros

pros iconCompetitive rates, especially on long-term CDs

pros iconFDIC insured

pros iconCD laddering

Cons

cons icon$1,000 minimum deposit

cons iconInterest compounded monthly, not daily

  • $1K Min. deposit
  • 4.25% 3-Month APY
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Overview

Ally Bank is headquartered in Sandy, Utah and was founded in 2009. As a full-service online bank, it offers its customers competitive interest rates, no minimum balance requirements, low fees, and round the clock customer service. Ally Bank is the digital banking division of Ally Financial Inc., and has roots that date back for nearly a century. Ally is best suited to customers who are familiar with online banking using a PC, tablet, or mobile device. The bank offers checking, savings, money market and certificate of deposit accounts. In addition, it also offers personal and auto loans, mortgages, investment accounts, and retirement services.

Ally is a public company: stock ticker NYSE: ALLY

Pros

pros icon24/7 customer service

pros iconNo monthly maintenance fees

pros iconNo minimum balance requirements

pros iconZero overdraft fees

Cons

cons iconNo cash deposit

cons iconNo branch access

cons iconEarly withdrawal penalties

  • No minimum Min. deposit
  • 3.00% 3-Month APY
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Overview

Popular Direct traces its lineage back to 1893, as it’s a subsidiary of Popular, Inc., which was founded in Puerto Rico. With over a century of banking expertise, the company has emerged as a significant financial player, focusing on providing its customers with high-yield savings products and competitive CD rates. Their commitment to deliver seamless online banking experiences has led to massive technological advances. The main selling point for Popular Direct is its dedication to offering attractive interest rates. While many banks have expanded services, this company focuses on high-yield opportunities, specializing where others have broadened.

Pros

pros iconAccounts with highly competitive rates

pros iconNo monthly fees

pros iconExtended phone customer service hours

Cons

cons iconHigh minimum deposit requirements

cons iconExcess withdrawal fees

cons iconThe mobile app has limited capabilities and low customer ratings

  • $10K Min. deposit
  • 5.00% 3-Month APY

Top 3-Month CD Rates 2024

2.00%

3-Month APY

$3K

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Daily compounding interest
  • con-icon Many term options
  • con-icon Longer terms earn higher APYs
  • con-icon $2,500 minimum deposit
  • con-icon Automatic renewal upon maturity

Account types

drop-down-btn
  • 3-Month APY 2.00%
  • 6-Month APY 4.25%
  • 9-Month APY 4.25%
  • 12-Month APY 4.80%
  • 18-Month APY 4.50%
  • 24-Month APY 4.00%
  • 30-Month APY 3.75%
  • 3-Year APY 3.75%
  • 4-Year APY 3.75%
  • 5-Year APY 3.75%
  • 7-Year APY 3.75%
  • 10-Year APY 3.75%

2.05%

3-Month APY

No minimum

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Variety of CD terms
  • con-icon Competitive rates
  • con-icon No-Penalty and Bump-Up CDs each only have one term
  • con-icon No minimum deposit
  • con-icon No terms over 5 years

Account types

drop-down-btn
  • 3-Month APY 2.05%
  • 6-Month APY 4.80%
  • 9-Month APY 5.15%
  • 12-Month APY 4.90%
  • 18-Month APY 4.50%
  • 24-Month APY 4.20%
  • 36-Month APY 4.15%
  • 48-Month APY 4.00%
  • 60-Month APY 4.00%
  • No-Penalty CD 11 Months 4.50%

4.25%

3-Month APY

$1K

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

No

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Competitive rates, especially on long-term CDs
  • con-icon FDIC insured
  • con-icon CD laddering
  • con-icon $1,000 minimum deposit
  • con-icon Interest compounded monthly, not daily

Account types

drop-down-btn
  • 3-Month APY 4.25%
  • 6-Month APY 4.75%
  • 12-Month APY 5.40%
  • 18-Month APY 5.15%
  • 24-Month APY 4.40%
  • 36-Month APY 4.30%
  • 48-Month APY 4.05%
  • 60-Month APY 4.00%
  • Jumbo Share Certificate 5.45%
Ally_l
Ally Bank

Highly Competitive Fixed Rates

3.00%

3-Month APY

No minimum

Minimum Deposit

$0

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon 24/7 customer service
  • con-icon No monthly maintenance fees
  • con-icon No minimum balance requirements
  • con-icon Zero overdraft fees
  • con-icon No cash deposit
  • con-icon No branch access
  • con-icon Early withdrawal penalties

Account types

drop-down-btn
  • 3-Month APY 3.00%
  • 6-Month APY 4.40%
  • 9-Month APY 4.45%
  • 12-Month APY 4.65%
  • 18-Month APY 4.45%
  • 3-Year APY 4.00%
  • 5-Year APY 3.90%
  • Ally Bank No Penalty CD 4.55%

5.00%

3-Month APY

$10K

Minimum Deposit

$0.01

Minimum Balance

None

Monthly fee

Yes

Daily Compounded Interest

Yes

Early withdrawal penalty

Pros & Cons

drop-down-btn
  • con-icon Accounts with highly competitive rates
  • con-icon No monthly fees
  • con-icon Extended phone customer service hours
  • con-icon High minimum deposit requirements
  • con-icon Excess withdrawal fees
  • con-icon The mobile app has limited capabilities and low customer ratings

Account types

drop-down-btn
  • 3-Month APY 5.00%
  • 6-Month APY 5.27%
  • 1-Year APY 5.30%
  • 18-Month APY 5.00%
  • 24-Month APY 4.70%
  • 36-Month APY 4.55%
  • 48-Month APY 4.45%
  • 60-Month APY 4.45%

How Does a 3-Month CD Work?

A 3-month CD (Certificate of Deposit) is a type of savings account offered by banks and credit unions. When you open a 3-month CD, you agree to deposit a fixed sum of money for a set period of 3 months. In return, the financial institution guarantees a specific interest rate for the term.

How it works:

  • Fixed Term: You commit to leaving your money in the account for 3 months.
  • Guaranteed Interest Rate: The bank or credit union provides a fixed interest rate, ensuring a predictable return.
  • Interest Compounding: Interest can be compounded daily, monthly, or annually, depending on the institution's terms.
  • Maturity: At the end of the 3 months, the CD reaches its maturity. You'll receive your initial deposit back along with the accrued interest.
  • Early Withdrawal: Withdrawing funds before the 3-month term ends usually results in a penalty, which can vary by institution.

Best 3-Month CD Rates for February 2024

In February 2024, the 3-Month CD rates are showing competitive offerings. The average APY for top-performing institutions is hovering around 2.5%. Some institutions are offering slightly lower rates, with APYs in the range of 0.15% to 4.5%. The minimum deposit requirements vary, with some institutions requiring no minimum deposit while others might ask for upwards of $25,000. It's crucial to remember that these rates can change based on the broader economic environment and the policies of individual financial institutions. Always check for the most up-to-date rates and terms before making a decision.

How Are 3-Month CD Rates Determined?

Determining CD rates is complex and involves various factors, both macro and micro. The rate you see isn’t just a random figure, but a result of an avaluation of these factors. Some of the primary determinants include:

  1. Federal Reserve Rates (Fed rates):
    The Fed plays an important role in influencing CD rates. Whenever the Fed moves its overnight banking rate - for instance, hiking it higher to combat inflation - banks usually adjust their CD rates in response. Thus, a rise or fall in the Fed rate often directly translates to rises and falls in CD rates.
  2. CD Term Length:
    The duration for which you commit your money impacts the rate you receive. Longer-term CDs usually offer higher rates because you’re locking in your money for a longer period, allowing banks to utilize those funds for longer. Conversely, shorter-term CDs generally have lower rates. It’s not always the case, so double-check before purchasing.
  3. Deposit Amount:
    The more you deposit, the more the financial institution benefits. Higher deposit amounts then can sometimes fetch better rates. Some institutions offer tiered rates, where larger deposits get a higher APY.
  4. Competition Among Financial Institutions:
    Banks and credit unions always want new customers. They closely monitor what each other offers and can adjust their rates accordingly. If a bank wants to increase deposits, it may offer higher rates to lure customers.
  5. Inflation Expectations and Predictions:
    Inflation diminishes your purchasing power over time. If banks anticipate higher inflation, they may increase CD rates to get ahead of their counterparts. This makes CDs more appealing, so customers feel that they’re at least maintaining, if not growing, their money’s value.
  6. Overall Economic Health:
    The general economic situation of a country or region affects its CD rates. In an expansionary economy, consumers are more likely to spend than save, which may lead banks to increase CD rates to entice them to save.
  7. Bank’s Strategic Objectives:
    Sometimes a bank will have a desire to boost its deposits or manage its liquidity higher or lower, which can affect its CD rate offer decision.

The CD rates you come across reflect these intertwined factors, and understanding them will help you be a more informed investor.

discover_l
Discover
  • Minimum deposit: $2500
  • No accounts fee on our CD account
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synchrony logo
Synchrony Bank
  • No minimum balance to open a CD account
  • Save more with a great CD rate
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Conclusion

A 3-month CD account offers both a secure investment and a relatively attractive return for a medium-term investment. Their fixed interest rates offer predictability for investors seeking stability in their investments. While they lock in funds for the duration, the trade-off is often a higher yield than shorter-term options. Evaluating your needs and goals before making any financial decision is important.