5 best 3-month CD rates for August 2024 (up to 5.51% APY)

Editor’s Note: APYs listed in this article are up-to-date as of the time of publication. They may fluctuate (up or down) as the Fed rate changes. CNBC Select will update as changes are made public.

If you have a short-term savings goal, like an upcoming vacation, a three-month CD can help grow a chunk of cash in just a few months with a fixed interest rate.

CNBC Select compared dozens of accounts to determine which three-month CDs are best. Our top picks offer APYs well above the national three-month CD average and are all FDIC- or NCUA-insured. (See our methodology for more information on how we chose the best three-month CD accounts.)

At 5.51%, TotalBank offers one of the highest APYs on a three-month CD that we were able to find. There’s a high minimum deposit to meet — $25,000. The high APY combined with a high minimum, however, makes for good savings: A 5.51% APY on a $25,000 balance would net you $337.48 in interest earnings alone over just three months.

CD terms offered

3 months, 6 months, 12 months, 24 months, 36 months, 60 months

Monthly fee

None

Early withdrawal penalty fee

Any withdrawal before the maturity date is subject to penalty based on the term of the CD. All penalties are calculated based on a 12-month year of 360 days:

• 30 days to 6 months = 30 days of compounded interest earned
• 6 months to 1 year = 90 days of compounded interest earned
• More than 1 year = 180 days of compounded interest earned

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Bask Bank offers a great 5.25% APY on its three-month CD, which is competitive with other online banks. There’s a minimum $1,000 deposit.

CD terms offered

3 months, 6 months, 9 months, 12 months, 18 months, 24 months

Monthly fee

None

Early withdrawal penalty fee

You may withdraw interest that has been credited to your account during the current term without penalty, but you will be subject to an early withdrawal penalty if any portion of your principal balance is withdrawn:

• CDs with terms of 6 months up to and including 1 year are subject to a fee of 90 days of simple interest based on the principal amount withdrawn
• CDs with terms greater than 12 months are subject to a fee of 180 days of interest based on the principal amount withdrawn

If your accrued interest is less than the penalty’s total amount, the difference will be deducted from your principal.

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Quontic Bank offers a solid 5.50% APY on its three-month CD with just a $500 minimum deposit, which is the lowest minimum we found. Quontic is an online-only bank and a Community Development Financial Institution (CDFI), which supports economically disadvantaged communities nationwide.

CD terms offered

6 months, 24 months, 36 months, 60 months

Monthly fee

None

Early withdrawal penalty fee

Withdrawals before the maturity date are subject to penalties:

• For time deposits up to 12 months, the penalty will be equal to the interest for the full length of the stated term.
• For time deposits 12 months to under 24 months, the penalty equals one year interest.
• For time deposits 24 months and over, the penalty equals two years interest.
• If the accrued interest exceeds the penalty amount, the excess accrued interest over the penalty amount will be paid to you.
• If the accrued interest is less than the penalty amount, a reduction of the principal balance may result.

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Popular Direct offers 5.25% APY on its three-month CD with a $10,000 minimum deposit requirement. If you have a large savings that you want to keep safe for a short-term goal, Popular Direct’s three-month CD is a good place to park it. A 5.25% APY on a $10,000 balance would net you nearly $130 in interest earnings alone over just three months.

CD terms offered

3 months, 6 months, 12 months, 18 months, 24 months, 36 months, 48 months, 60 months

Monthly fee

None

Early withdrawal penalty fee

• For terms less than 91 days: The fee is 89 days simple interest
• For terms equal to or greater than 91 days but less than 12 months: The fee is 120 days simple interest
• For terms equal to or greater than 12 months but less than 36 months: The fee is 270 days simple interest
• For terms equal to or greater than 36 months but less than 60 months: The fee is 365 days simple interest
• For terms equal to or greater than 60 months: The fee is 730 days simple interest

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Dow Credit Union is a good option if you prefer banking with a credit union. It offers a three-month CD at 5.30% APY — the highest three-month CD rate we found from a credit union. The minimum deposit is just $500. Membership is open to anyone by opening a Dow Credit Union Savings Account with a $5 deposit and a Dow Credit Union Checking Account.

CD terms offered

3 months, 6 months, 12 months, 13 months, 18 months, 24 months, 36 months, 48 months, 60 months

Monthly fee

None

Early withdrawal penalty fee

An early withdrawal penalty may be applied when a withdrawal is made before maturity of the certificate and could result in loss of principal.

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The term CD stands for “certificate of deposit” — and is just that: a deposit account that earns interest. With a CD, you earn a fixed rate of interest for a fixed time period. CDs come with different terms, such as six months, one year or five years, and you can’t touch your funds in your CD for the entirety of that specified term length unless you pay an early withdrawal penalty fee plus possibly lose out on accrued interest.

When you put your money in a CD, you earn a fixed interest rate for a specific amount of time on the money you deposit when you open an account. Term lengths typically range from three months to five years.

While a CD is similar to a savings account, the traditional CD model differs in a couple of important ways:

1. You can only deposit money into the CD once at the beginning of the term. You can’t make additional contributions over the CD’s term. Sometimes, there’s a minimum deposit requirement (usually $500 and up).
2. You can’t access your money before your term ends or you’ll get hit with an early withdrawal penalty. The penalty fees can vary depending on your bank and your CD’s term length, but it’s usually the interest earned or the interest you would have earned, over a certain number of days or months. Generally, the longer the CD term length, the costlier the withdrawal penalty.

Once the CD matures (when the term is over), savers can get their money back, in addition to the interest earned over time, or move the money into a new CD. CD terms usually auto-renew at the rate offered at maturity if you don’t do anything.

One of the reasons you might want to consider a CD over a high-yield savings account is because savings accounts have variable APYs, and with a CD you lock in the rate the day you open the account. This can be good if you open an account when interest rates are high. It’s not so great if you open an account after the Federal Reserve slashes interest rates.

CDs typically don’t come with monthly fees and are federally insured so your money is protected, which makes them one of the safest savings vehicles.

When choosing a CD, first focus on how long you want to keep your money locked up. Pick a CD based on that length of time and the rate will follow. For example, if you want to save up for a down payment on a home in a few years, consider a longer-term CD like a three- or five-year option and then look at what banks offer rate-wise for those specific CD terms. Shorter CD terms, such as three- to six-month CDs, are a good choice for beginners who want to save (and grow) their money for a short-term goal, such as a vacation.

When comparing CDs, make sure you’re looking at CDs with the same term across different banks; this way, you’re comparing “apples-to-apples.” Once you know the CD term you want, you can compare the different interest rates, as well as the minimum deposit requirements and any fees like early withdrawal penalties.

Some of the pros and cons of CDs are quite the same, and whether you see something as good or bad depends on other factors. We list what we think below.

Pros of CDs

• Fixed interest rates (a good thing when rates are high)
• Can’t touch CD funds until the term is up (a good thing so you’re not tempted to spend)
• Different CD types allow you to have options, such as bump-up CDs (for raising your rate), no-penalty CDs (for easy withdrawals), add-on CDs (for making additional contributions), jumbo CDs (for large deposits) and IRA CDs (for retirement)

Cons of CDs

• Fixed interest rates (a bad thing when rates are low or if rates go up while you’re in the middle of a CD term)
• Can’t touch CD funds until the term is up (a bad thing if you need that money)
• Early withdrawal penalty fees may apply
• Can generally only deposit money into a CD once at the beginning of the term and can’t make additional contributions
• Usually a minimum deposit requirement, typically $500 and up

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every CD review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of savings and banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best three-month CDs.

To determine the best three-month CDs, CNBC Select compared dozens of options offered by online and brick-and-mortar banks, including credit unions. We found that the APY offered by online banks and credit unions far outpaced those offered by most national brick-and-mortar banks.

When ranking the top three-month CDs, we prioritized the ones offering the highest APYs. We then compared three-month CDs by looking at their minimum deposit requirements, penalties for early withdrawals, ease of use and industry rankings. We ranked our top picks by best for high APY, best from an online bank, best for low minimum deposit, best for a large deposit and best from a credit union.

All of the CDs included on this list are FDIC- or NCUA-insured up to $250,000 per person. The rates and fee structures banks advertise for their CD accounts are not guaranteed forever. They are subject to change without notice and they often fluctuate in accordance with the Fed rate. If you open a CD account, however, you’re often locked into that APY offered at account opening for the entire term length.

Your earnings depend on the CD term length, the amount you deposit, the APY offered when you opened the account and any associated fees. Generally, a larger deposit and a higher interest rate will earn you the most money. Any early withdrawals may result in penalty fees that lower your principal balance/earnings.

To open a CD account for the first time at a bank, most banks and institutions require a deposit of new money, meaning you can’t transfer money you already had in an account at that bank.

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