Best 3-month CD rates for September 2024: Earn up to 5.51%

Advertiser disclosure: Content provided by www.redventures.com. Fox and its content partners earn compensation from the affiliate companies below. This content doesn’t include all available offers, and compensation may impact how and where links appear in the content.

If you have extra cash you're unsure what to do with, a certificate of deposit can be a good option. These accounts offer higher interest rates compared to traditional savings accounts. But you'll need to lock up your money for the entire term or pay an early withdrawal penalty.

Want to open a CD without a big commitment? Consider a 3-month CD, which offers liquidity while helping your money earn a higher rate.

We compared the banks offering the best 3-month CD rates, helping you maximize your short-term savings.

Top 3-month CD rates

Should you invest in a 3-month CD? 

Advantages 

A 3-month CD can be a smart choice if you want to earn a competitive interest rate on your money in the short term. Benefits include:

• Competitive interest rates: Currently, the best CDs are paying up to 5% APY — some of the highest in years. Locking in a high fixed rate of return will lead to greater savings than a traditional savings account might.
• Low risk: Most CDs are FDIC-insured (or NCUA-insured for credit unions), up to $250,000 per person, per account.
• Short-term commitment: With a 3-month CD, you're only committing your funds for a short period, which can be ideal if you're unsure about tying up your money or if you think you’ll need access to your funds in the near future.
• Predictable returns: CDs offer a fixed interest rate throughout the term. That means you'll know exactly how much you'll earn over the three months.

Disadvantages 

While 3-month CDs can be a solid short-term savings option, there are also some potential drawbacks to consider, including:

• Lower rates than longer-term CDs: While 3-month CDs often offer higher rates than savings accounts, they typically have lower rates than longer-term CDs. If you're willing to commit your funds for a longer period, you may be able to earn a higher return.
• Early withdrawal penalties: If you need to withdraw your funds before the end of the 3-month term, you may face early withdrawal penalties, which can eat into your earnings.

What to consider when choosing a 3-month CD

Once you’ve decided on a 3-month CD, be sure to shop around for the best CD rates available. Here are some other factors to consider:

• Minimum deposit requirements: Each bank or credit union has a minimum deposit requirement for opening a 3-month CD. Be sure to choose a bank with a minimum deposit that aligns with your investment goals and budget.
• Bank reputation: Choose a reputable bank or credit union with a strong track record of financial stability. 
  Banking services: Consider other services the bank offers, such as checking and savings accounts, loans, and investment products.
• Renewal options: Keep in mind some banks will automatically renew your CD when the term is up — which will lock up your money for another three months if you don’t withdraw the money at the maturity date or during the grace period. 
• Special features: Some institutions will let you bump the interest rate up if they offer better rates after you begin your CD’s term. Others may let you add more money to your CD after the term starts, which can increase the interest your account earns. 

Alternatives to 3-month CDs

While 3-month CDs can be a good option for short-term savings, they're not the only choice available. Here are some alternatives to consider:

• High-yield savings accounts: Some online banks and credit unions offer high-yield savings accounts with interest rates that are the same or even higher than 3-month CD rates. These accounts offer more flexibility than CDs, as you can withdraw your money anytime without penalties.
• Money market accounts: Money market accounts are similar to savings accounts but often come with higher interest rates and check-writing privileges. Like high-yield savings accounts, they offer more liquidity than CDs.

How we rated the best CDs 

To determine the best CDs, we carefully evaluated a wide range of factors, including interest rates, fees, and minimum deposit requirements.

Our team analyzed numerous CD offers and selected the top contenders based on these key criteria. The options on this list represent the best value benefits available.

Here are some of the key factors we considered: 

• Interest rate: The interest rate is the primary reason someone would choose a savings, CD, or money market account over another, so this is our most heavily weighted factor. 
• Fees: Fees, particularly early withdrawal penalties can eat into the overall cost of a CD.
• Minimum deposit & balance requirements: High minimum deposits can be a barrier, and high balance requirements to avoid fees or earn the best rate limit the CD's usefulness.

The bottom line 

When you have a very short time horizon, a 3-month CD can be useful to earn some interest on your savings without much risk. You won’t be able to withdraw your money during the CD’s term without paying a penalty, but if you have a predictable timeline, it can be worth it.

You can find the right account by comparing the rates, minimum deposit requirements, and other key features of the top banks and credit unions offering 3-month CDs. 

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.