Top 3-Year CD Rates 2023
Best 3-Year CD Rates for September 2023
As of September 2023, competitive 3-year CD rates are available. The average APY for top-performing institutions is hovering around 4.75%. Some institutions are offering slightly lower rates, with APYs ranging from 4.40%-4.45%. It depends on the institution, but some may require as little as $500 for a deposit, while others may require as much as $10,000.
Before making a decision, always check for the most current rates and terms based on the broader economic climate and the policies of individual financial institutions.
Quontic Bank
Quontic Bank is a digital bank that offers a range of deposit accounts with competitive rates and affordable minimum deposit requirements. Quontic Bank offers a Certificate of Deposit (CD) with an APY of 5.05% for a 6-month term. The minimum deposit to open a Quontic Bank account is $500.
Alliant Bank
Alliant Credit Union is a top choice for eligible customers seeking a diverse selection of high-yield products while aiming to minimize fees. With multiple methods of eligibility, becoming a member is made simple and accessible. With competitive APYs and minimal fees, opening a CD account with Alliant Credit Union is an attractive route for its customers.
Several are in the same range, so do your due diligence and find what works for you.
3-Year CD: Pros & Cons
| Pros |
Cons
|
| Safety and Security: 3-Year CDs are generally considered a safe investment, especially if institutions like the FDIC or NCUA insure them. |
Penalties: Withdrawing funds before the maturity date can result in penalties. |
| Higher Rates: Typically, a 3-Year CD might offer a higher interest rate compared to shorter-term CDs or regular savings accounts. |
Inflation Concerns: The fixed interest rate might not keep pace with rising inflation. |
| Guaranteed Returns: The interest rate is usually fixed, ensuring a predictable return over the term. |
Limited Liquidity: Funds are locked in for the duration of the term, making them less accessible than other savings options. |
| CD Laddering: This strategy allows for flexibility and the potential to leverage changing interest rates. |
Missed Investment Opportunities: The locked-in nature might mean missing out on higher returns from other investment opportunities. |
Are 3-Year CDs Safe?
Generally, 3-Year CDs are considered safe and secure investment options. Your deposits are protected up to $250,000 per person and per institution when you invest in an FDIC-insured bank or NCUA-insured credit union.
CD Fees
There are some associated fees and fee structures when purchasing CDs. While they might seem to be negligible and unimportant when you first purchase them, watch out for any early withdrawal fees and terms. Should you find yourself in a position where you urgently need access to your deposited funds before the maturity date, banks can and often do levy a penalty for taking your money out. The penalty can be large enough to significantly reduce or even negate your accrued interest and, in some cases, claw back some principal.
Another thing to look for is any associated maintenance fees, like annual fees or monthly fees. Some banks may charge you if you are under a certain balance or simply have annual fees associated with the type of account. Always do your due diligence and read the fine print, as any costs associated will affect your true return on investment.
Conclusion
A 3-Year 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.
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