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Updated on Wednesday, July 1, 2020
Three-year CDs are a great choice for your mid-term savings goals. They offer higher APYs than 1-year certificates, while avoiding the time commitment of a longer 5-year CD term. To make sure you give your account the best chance to grow your money, you’ll want to find the best CD rates available.
MagnifyMoney can help you find the right 3-year CD for your savings. Using data from DepositAccounts.com, a LendingTree-owned site, we’ve found the highest 3-year CD rates available nationwide. We also looked at each account minimum deposit and each bank’s relative health to ensure top picks.
The 10 best 3-year CD rates in June 2020
#1 Lafayette Federal Credit Union — 1.16% APY, $500 minimum deposit
Lafayette Federal Credit Union offers a handful of certificates, including its 3-year Fixed Rate Certificate, which requires $500 to open and earns 1.16% APY. Interest is compounded and paid quarterly. An early withdrawal from this 3-year account will trigger a penalty equal to 360 days of dividends.
Established in 1935 and headquartered in Rockville, Md., Lafayette Federal credit union has branches in Maryland, Virginia and Washington, D.C., plus CO-OP Shared Branches. You can join LFCU if you live or work in its serviced areas, work at a partner company, are an immediate family member of a current member or are a member of the Home Ownership Financial Literacy Council. Existing and new members of the American Consumer Council may also join.
#2 Georgia’s Own Credit Union — 1.45% APY, $500 minimum deposit
If you can keep your money invested in a CD for three years, you can get this high APY from Georgia’s Own Credit Union. There may be a penalty equal to 270 days’ interest if you withdraw your funds early. Interest is credited monthly or compounded quarterly.
Georgia’s Own Credit Union serves communities in Georgia, but anyone can join by supporting the credit union’s charity, Georgia’s Own Foundation. Membership starts at $10.
#3 Hughes Federal Credit Union — 1.56% APY, $1,000 minimum deposit
Making a minimum deposit into a Hughes Federal Credit Union 36-month Certificate can get you its competitive rate. Your rate will be further boosted if you deposit even more money in a Mini-Jumbo or Jumbo CD. Partial withdrawals from a Certificate Account are not allowed, so if you make a withdrawal before maturity, you’ll have to withdraw all of your funds, close the account and pay a penalty of $50 or 180 days’ dividends, whichever is greater.
Hughes Federal Credit Union was founded in 1952 in Tucson, Ariz., to serve Hughes Aircraft Company employees and their families. Today, the credit union serves select employee groups and anyone who lives, works, worships or attends school in Tucson.
#4 Pen Air Federal Credit Union — 1.45% APY, $500 minimum deposit
Pen Air Federal Credit Union requires a $500 minimum deposit to open and start saving with a 36-month certificate. The penalty for an early withdrawal will equal 180 days’ interest.
Founded in 1936, Pen Air is based in Pensacola, Fla., with 15 branded locations in northwest Florida and southeast Alabama plus CO-OP Shared Branch and ATM access nationwide. Pen Air membership is open to active duty or retired military; civil service employees; employees at partnering select employer groups; immediate family members of eligible members; and members of the Friends of the Navy-Marine Corps Relief Society, Inc., for which Pen Air will pay the one-time $3 donation on your behalf.
#5 Financial Partners Credit Union — 1.15% APY, $1,000 minimum deposit
Earn a fixed interest rate with Financial Partners Credit Union’s 36 to 47 months Savings Certificate. Jumbo certificates offer an even higher rate, but your minimum deposit requirement will jump from $1,000 to $100,000.
You can join Financial Partners if you live in certain areas of California, are an employee or retiree of one of the credit union’s 700 partnering employer groups or if you become a member of the American Consumer Council.
#6 Generations Credit Union — 1.46% APY, $500 minimum deposit
Generations Credit Union computes dividends daily and pays them monthly or at maturity on its 36-month CD. It requires a $500 minimum deposit to get started. You may incur a penalty of 90 days’ dividends for early withdrawal.
You are eligible to join Generations, a division of Community 1st Credit Union, if you live in Washington state. If you live outside Washington, you can join by becoming a member of the Northwest Energy Coalition or the Northwest Credit Union Foundation.
#7 RiverLand Federal Credit Union — 1.45% APY, $1,000 minimum deposit
You’ll earn this competitive rate by depositing just $1,000. If you have $10,000 to invest, you can opt for RiverLand Federal Credit Union’s Step-Up Certificate. This allows you to change your rate one time to the current rate for the remainder of your term after your existing certificate’s halfway point.
Louisiana-based RiverLand Federal Credit Union is open to employees of their partner employer groups. You can also join by becoming a member of the New Orleans Arts Council, which requires a $120 charge upfront. Luckily, even if your eligibility ever changes, you can remain an active member for life.
#8 Northrop Grumman Federal Credit Union — 1.26% APY, $2,500 minimum deposit
Investments of $2,500 and more will net you this APY. Northrop also offers bonus rates for higher account balances, so consider opening your account with more than the minimum. Dividends are paid monthly, and you can choose to leave them in the account for further compounding, transfer them to another account or have them mailed to you as a check. You can also use your CD funds as collateral on loans with the credit union.
If you aren’t an employee of Northrop Grumman Corporation or its subsidiaries or related to an employee, you can get a membership to the Southern California Historical Aviation Foundation, which will qualify you for membership with this credit union.
#9 Superior Choice Credit Union — 1.05% APY, $25,000 minimum deposit
The minimum is a bit steep for this 3-year CD compared to the others on this list, but if you don’t have that much to invest, a minimum of $2,500 will get you a rate that’s not too far off the top 10. And if you have even more ($50,000 and over), you’ll score an even better rate.
Membership to Superior Choice is open to residents of certain counties in Wisconsin and Minnesota, but you can also join by becoming a member of the American Consumer Council or the Douglas County Historical Society in Superior, Wis.
#10 Signature Federal Credit Union — 1.20% APY, $500 minimum deposit
Signature Federal Credit Union offers this rate with at least $500 to open the account. It does not allow for any additional deposits. Signature FCU does not allow for partial withdrawals, either, so if you want to make an early withdrawal, it will have to be for all your funds. Signature charges a penalty equal to half the term’s worth of interest earned. So on the 36-month certificate, you would be charged 18 months’ worth of interest earned on the amount withdrawn.
Founded in 1970, Signature FCU opens up membership to employees, members and retirees of select associations and organizations and folks referred by current members. You may also become eligible by enrolling in the American Consumer Council, which Signature FCU will do for you for free.
Inflation impact on 3-year CD rates
Inflation reduces the value of any savings or investment balance, including CDs. Your earnings have to exceed the inflation rate for there to be a real return on your money. While mid- and long-term CDs can lock in a high rate today, there’s still potential for inflation to lower your earnings.
For a more inflation-proof savings strategy, consider stock- and bond-based investment products. They can come in handy for long-term savings since their earnings have a better chance of exceeding the inflation rate.
Should I pay early withdrawal penalties if 3-year CD rates rise?
In today’s current rate climate, the zero odds of a Fed rate hike in 2020 don’t point to an increase in 3-year CD rates any time soon. That said, an early withdrawal can sometimes be worth paying the penalties, although you’ll want to do the math and check whether the gains are greater than the costs. Calculate the penalty you would end up paying and ensure it’s lower than the returns on the new CD. This early withdrawal penalty calculator from DepositAccounts.com can run the numbers for you and tell you outright whether breaking your CD is worth it or not.