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Updated on Wednesday, September 16, 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 we featured the best offers.
The 10 best 3-year CD rates in September 2020
1. Georgia’s Own Credit Union — 1.30% 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.
2. Generations Credit Union — 1.26% 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.
3. Pen Air Federal Credit Union — 1.25% 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.
4. Greenwood Credit Union — 1.00% APY, $1,000 minimum deposit
With just $1,000, you can open a Greenwood Credit Union certificate of deposit like its high-yield 36-month CD. Any early withdrawals from this account will charge a penalty equal to six months’ dividends that would have been earned on the amount of principal.
Greenwood Credit Union was founded in 1948 and opens its membership to everyone.
5. Hiway Federal Credit Union — 1.20% APY, $25,000 minimum deposit
You’ll need $25,000 to contribute if you want to see the high APY on this 36-47 month CD. If you have less cash on hand, but can still swing at least $10,000, you’ll still get an APY that would fit on this list. Anything below $10,000 and you might want to go with another institution’s CDs. You may lose 180 days’ dividends if you need to access your cash from a 36-47 month CD before maturity.
Founded in 1931, Hiway Federal Credit Union was established for employees of the Minnesota Department of Transportation. Now almost anyone can join Hiway FCU if you live, work, worship or attend school in the Metro Community Areal; work at a qualifying company or government agency; are related or know an eligible individual; join the Minnesota Recreation and Park Foundation with a one-time $10 contribution; or join the Association of the United States Army with a one-time $40 contribution.
6. Evansville Teachers Federal Credit Union — 1.15% APY, $1,000 minimum deposit
All of Evansville Teachers Federal Credit Union CDs are available for a minimum deposit of $1,000, including this 3-year certificate. If three years is just a bit too long, you’ll still earn a high APY if you opt for the slightly shorter 30-month CD instead.
You don’t need to be a teacher to join this credit union, which has been around since 1936. You can join Evansville FCU by work, organization or family association or by making a $5 donation to the Mater Dei Friends & Alumni Association.
7. Quorum Federal Credit Union — 1.15% APY, $1,000 minimum deposit
Quorum’s 36-month term savings CD has a minimum opening deposit of $1,000, but if you can safely save over $100,000 for three years, you’ll earn an extra 0.10% APY. If you need to access your money anytime before 3 years, you’ll lose 3% of the amount withdrawn, though never more than the original balance.
Quorum membership is established when you open a basic savings account with them and are approved. The account only requires a $5 minimum balance, which will be funded by Quorum once your application is approved.
8. Wings Financial Credit Union — 1.11% APY, $10,000 minimum deposit
Wings Financial Credit Union offers 3-year CD rates for a range of investment amounts. For this APY, you’ll need to deposit at least $10,000. For lower amounts, you’ll still get a rate that falls just below our top 10, while higher amounts will boost the APY even further up on the list. The penalty for an early withdrawal from this CD is 730 days’ dividends.
Wings membership is available to anyone who works for the aviation industry as well as anyone who lives or works in certain metro areas of Michigan, Florida, Georgia and Washington and specific counties in Minnesota and Wisconsin. You can also join by making at least a $5 donation to the Wings Financial Foundation.
9. Dow Chemical Employees’ Credit Union — 0.95% APY, $500 minimum deposit
Get started with a 36-month Simple CD at Dow Chemical Employees’ Credit Union with a $1,000 minimum deposit. Watch out for a penalty on any early withdrawals of the principal amount.
As you might have guessed, the Dow Chemical Employees’ Credit Union was first opened to serve members of The Dow Chemical Company in 1937. Today, membership is still open to The Dow Chemical Company and its affiliated companies as well as Dow Corning Corporation and its affiliated companies, other Select Employer Group companies, family members of eligible individuals and members of select other groups. The credit union also invites you to give them a call if you’re not eligible now to try to find a path of eligibility for you.
10. State Department Federal Credit Union — 1.10% APY, $500 minimum deposit
With just $500, you can open a high-yield 36-month share certificate with State Department Federal Credit Union. There are no service charges and dividends are compounded daily for further savings. If you make an early withdrawal from the 36-month share certificate, you’ll pay a penalty that’s either 180 days of dividends on the amount withdrawn or the amount of dividends earned since the date of issuance, whichever is smaller.
You can join State Department FCU if, of course, you are an employee of The U.S. Department of State. Member eligibility may also apply through select organization membership, an immediate family member or the American Consumer Council. You can also apply as a group with your employer/employees.
SDFCU was founded in 1935. Headquartered in Alexandria, Va., it offers its customers branch access through the CO-OP Shared Branch network.
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.