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Our Criteria
We conducted an assessment of 3-month certificate of deposit options provided by the biggest banks and credit unions across the country to determine the best options, ultimately only featuring those that fit our strict criteria. To be eligible, a bank or credit union must:
- Be ranked a top 30 bank or top 10 credit union based on 2022 consolidated assets.
- Offer CDs in all 50 states.
- Offer 3-month CDs at rates at or above 2.00% APY.
- Be federally insured by either the FDIC or the NCUA.
Understanding Our Methodology
Annuity.org’s independent editorial staff evaluated 3-month CD options available from the country’s biggest banks and credit unions to determine the best 3-month CD rates available in 2023.
They used thorough and fact-based criteria to determine which companies qualified for their rankings. To be eligible, a bank or credit union must offer CDs in all 50 states and be supported by either the FDIC or the NCUA.
Of these institutions, only four offered rates at or above 2.00% APY. Other parameters they analyzed to narrow the field included the CD’s minimum deposit requirements, early withdrawal penalties and any bonuses or promotions the institutions offered.
Learn more about our broader Editorial Guidelines.
When a CD matures, unless you specify otherwise, most institutions will automatically roll your money into a comparable-term CD at the prevailing interest rate. Therefore, it is important to keep the CD maturity date on your radar. If you want to withdrawal the funds, you need to provide formal notice to the issuing institution within a certain number of days after maturity (typically, seven or 10).
Thomas J. Brock, CFA®, CPAInvestment, Corporate Finance and Accounting ProfessionalThomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.
Editor’s Choice: Best Overall
Ally Bank Details
General Motors founded GMAC as its dealer financing arm in 1919 and rebranded it in 2009 as Ally Bank. Ally Bank is an online-only bank that operates without any physical branches. According to the U.S. Federal Reserve, it reported $181.8 billion in assets and served 4 million retail customers in 2016.
Pros
- No minimum deposit requirement
- Competitive with most other 3-month APY offerings on our list
- Other banking options available with a large network of fee-free ATMs
Cons
- Average rate for 3-month CDs
- No physical branches
- Does not take cash deposits
Our Take
Ally Bank’s 2.50% APY on 3-month high-yield CDs was in the mid-range for rates among the banks and credit unions we reviewed. But it was the only institution offering no minimum deposit, making it a more attractive option to anyone with less than $500 to put into a CD. In addition, it had the lowest early withdrawal fee — 60 days’ worth of interest — for the rate, which could be an added attraction for small depositors.
Best for Large Depositors
JPMorgan Chase Bank Details
JPMorgan Chase is the largest bank in the United States, based on combined assets — $3.2 trillion in 2022, according to the U.S. Federal Reserve. With a history dating back to 1799, it bills itself as a leader in investment banking, commercial banking and consumer financial services.
Pros
- Low early withdrawal fee — $25 + 1.00%
- Large deposits earn higher APY
- Extensive selection of CD terms
Cons
- Very high minimum deposit ($100,000) required to earn the best rates
- The typical CD rates are not as competitive as those from online banks
Our Take
JPMorgan Chase offered higher than median rates — 3.50% APY — for anyone making a $10,000 deposit in a 3-month CD. The rate rose to 4.00% for a minimum deposit of $100,000, but the rate fell to 2.00% for deposits below $10,000.
These rates are competitive with Ally Bank for small depositors and with Citibank for larger depositors. The early withdrawal fee of $25 plus 1.00% of the withdrawal could be a deciding factor for an investor deciding which is best for their needs.
Best for Mid-Range Investors in 2023
Discover Bank Details
Founded as Greenwood Trust Company in 1911 and eventually rebranded as Discover Bank in 2000, the institution is the parent company of the third largest credit card brand in the United States — the Discover Card. It had consolidated assets in excess of $129 billion in 2022, according to the U.S. Federal Reserve.
Minimum Deposit: $2,500
Pros
- Competitive APY
- Low early withdrawal penalties
- Online access, mobile banking and 24-hour customer service
- Access to network of 60,000 no-fee ATMs
Cons
- High minimum deposit
- No brick-and-mortar branches
Our Take
Discover Bank had a competitive APY beating out the few remaining 3-month CDs that met our criteria. It requires a higher minimum deposit of $2,500 and early withdrawal fees, but these may not be deciding factors to people committed to letting the CD reach maturity.
Others We Considered
Below, we’ve ranked the other banks and credit unions on our list in descending order based on — in order of priority — APY, minimum deposit and early withdrawal penalties.
Other 3-Month CDs We Considered
| Institution | Minimum Deposit | Early Withdrawal Penalty |
|---|---|---|
| Navy Federal | Up to $10,000 $100,000 and up |
90 days’ dividends or the amount withdrawn, whichever is less |
| Wells Fargo | Up to $10,000 $100,000 and up |
90 days’ interest |
| U.S. Bank | $500 | Disclosed upon opening account |
| BMO | $1,000 | 90 days’ interest |
Comparing 3-Month CDs vs. Other CD Terms
Typically, the shorter the term, the lower the rate. While this is not always the case, the rates for the 3-month CDs we reviewed were lower than those we found for longer-term CDs.
The reason is that depositors tend to take less risk with short-term CDs, such as 3-month certificates of deposit. The CD is likely to reach maturity before there are drastic changes in the economy that affect CD rates, so the bank can afford to offer lower rates without driving off depositors.
With longer CD terms, the depositor takes on more risk. There’s more time for rates to be affected by market forces and a depositor is more prone to losing value if inflation suddenly rises after they buy a long-term CD. So banks and credit unions typically offer higher rates to offset that risk and make those CDs more attractive to depositors.
Who Should Get a 3-Month CD?
People usually purchase CDs to take advantage of building interest over time. But there’s not much time to do that with a 3-month CD.
But there are personal finance strategies in which a 3-month CD makes sense. For instance, 3-month CDs are an option to save money and earn interest while still being able to access your money relatively quickly if you need it. If you don’t need it, you can make multiple renewals every year. And if rates are rising, you can take advantage of moving to a higher rate CD every three months.
Frequently Asked Questions About 3-Month CDs
A 3-month CD typically earns less interest than longer-term CDs but may still be worth considering depending on your goals. They can be used to create short-term CD ladders and can put your savings out of reach to keep you from spending it.
High-yield savings accounts and money market accounts are competitive alternatives to 3-month CDs. All three earn more than regular savings accounts. You also have greater access to your cash in high-yield or money market accounts. Paying down your debt can also be a competitive alternative to short-term CDs if eliminating debt saves you more than you earn in interest on the CD.
A 3-month CD can play a role in creating a short-term CD ladder for your savings. Split the money you have to invest into four equal parts. Buy a 3-month, 6-month, 9-month and 12-month CD. In the first year, every three months when a CD matures, use it to purchase a 1-year CD. This means every year after, you’ll have access to your money for an emergency fund or other need while you earn interest.
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