Best 3-Year CD Rates: Up to 4% for September 2025

3-Year CD Rate Trends

CD interest rates have increased significantly since 2022, largely due to the Federal Reserve's efforts to combat high inflation.

The federal agency's federal funds rate is the rate at which banks lend to each other overnight. The rate has a direct impact on the yields financial institutions offer on CDs and other deposit accounts.

For example, after hovering around 0.20% for much of 2021, the annual percentage yield (APY) average on six-month CDs jumped to more than 1.30% by 2023 and has remained relatively stable since then.

That said, CD rates have dipped slightly since late 2024 as the Federal Reserve slashed interest rates three times toward the end of the year. But further rate cuts in the near term aren't imminent as economic uncertainty continues.

3-year CD National Rate, 2020 to 2025

How Much Can You Earn With a 3-Year CD?

Three years may be a long time to lock up your money in a CD, but depending on how much you can afford to set aside, you could get a sizable return.

For example, if you were to deposit $10,000 in a three-year CD with a competitive rate of 4%, you could earn $1,248.64 in interest. That's nearly twice what you'd earn from a CD with the national average rate of 2.1%.

Here's a quick look at what you could earn with a 4% yield on a three-year CD compared to the national average for different deposit levels.

^*Source: Curinos LLC, September 2025

Learn more: How to Calculate Your CD Returns

How to Find the Best 3-Year CD

While it may be tempting to go to your primary bank or credit union to open a CD, do your research to make sure you get the best possible return on your money. Here are some steps you can take:

• Compare APYs. Not all financial institutions offer the same rates, so it pays to shop around. Online banks, credit unions and fintech platforms typically offer higher APYs than traditional brick-and-mortar banks due to lower overhead costs. Even a small difference in rate can add up significantly over a three-year term.
• Check the compounding frequency. Interest can be compounded daily, monthly, quarterly or annually. The more often it's compounded, the more quickly your money grows.
• Check minimum deposit requirements. Some CDs have no deposit requirement, while others may require $5,000 or more. A low minimum makes it easier to get started and gives you flexibility if you're planning to spread your savings across multiple CDs. This can be especially useful for building a CD ladder.
• Check for FDIC or NCUA insurance. Always verify that the CD is offered by an institution insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA). FDIC or NCUA insurance protects your money up to $250,000 per account owner, per institution and per account category in the unlikely event that the bank or credit union fails. It's one of the reasons CDs are considered low-risk savings vehicles.
• Review early withdrawal penalties. Withdrawing funds before the CD matures can result in lost interest or even a portion of your principal, depending on the terms of the account. Understanding this penalty upfront helps you avoid surprises if you need access to your money early.
• Watch out for promo rates. Some banks advertise promotional CD rates to attract new customers, but these offers may revert to lower rates after a set period. Make sure the advertised APY applies for the full three-year term. If not, the average return could be lower than expected.

By shopping around and comparing the fine print, you can ensure that the three-year CD you choose aligns with your financial goals and savings timeline.

Is Now a Good Time to Get a 3-Year CD?

Whether a three-year CD is the right move depends on your financial goals, market expectations and your need for flexibility. Here are some key factors to help you decide:

• Interest rate outlook: In general, if you believe interest rates will stay the same or drop in the coming months, locking in a three-year CD at 4% or higher can protect your earnings because the rate is fixed.
• Your financial goals and timelines: A three-year CD strikes a balance between return and commitment. It typically offers higher yields than shorter-term CDs without tying up your funds for five or more years. This can make it ideal for medium-term savings goals like a home down payment or tuition.
• Liquidity needs: CDs usually come with early withdrawal penalties, so you should only invest money you won't need for three years. If your financial situation may change or you want more flexibility, consider a shorter-term CD, a high-yield savings account or using a CD ladder strategy.
• Inflation outlook: If inflation cools, today's three-year CD rates could offer a real return that outpaces rising prices. But if inflation picks up, your locked-in rate may lose purchasing power over time. Unfortunately, it's difficult to say what the inflation rate will do in the near term.

If you're looking for guaranteed returns and are comfortable setting funds aside, now could be a smart time to take advantage of competitive three-year CD rates.

Pros and Cons of 3-Year CDs

As you carefully consider your financial situation and objectives, it's also a good idea to consider how the advantages and disadvantages of a three-year CD can impact you. Here's what to keep in mind as you weigh your options.

Alternatives to 3-Year CDs

While three-year CDs can offer solid, predictable returns, they may not align with everyone's financial goals or liquidity needs. Depending on your time horizon, risk tolerance and savings strategy, there are several alternatives worth exploring.

These options can offer more flexibility, quicker access to funds or even higher returns. It may even make sense to diversify across multiple savings and investment products to strike the right balance between growth and accessibility.

Here are some common alternatives to consider:

• Shorter-term CD: Certificates with terms of six months, one year or two years offer greater flexibility than three-year options. You may earn a slightly lower APY, but you'll have access to your money sooner if your financial plans or interest rates change.
• Longer-term CD: CDs with terms of four or five years may provide even higher yields than three-year CDs. However, they require a longer commitment and may come with steeper early withdrawal penalties if you need to access funds early.
• High-yield savings account: These accounts provide competitive interest rates and easy access to your funds. While rates may fluctuate, they're a great choice for emergency funds or short-term savings goals because there's no penalty to access your funds.
• Money market account: Money market accounts often offer higher interest than standard savings accounts and may include limited check-writing or debit card access. They're a solid hybrid option for savers who want both a strong risk-free return and flexibility.
• Treasury securities: Backed by the U.S. government, Treasury bills, notes and bonds offer low-risk returns and potential tax advantages at the state and local levels. These can be good for conservative savers focused on capital preservation.
• CD ladder: A CD ladder involves opening CDs with staggered maturity dates—for example, six months, one year, two years, three years and four years. This strategy helps you maintain some liquidity while locking in higher rates over time.
• Stocks and other market investments: Investing in the stock market, mutual funds or exchange-traded funds (ETFs) can offer higher long-term returns than CDs. But they come with more volatility and risk, making them better suited for long-term financial goals or investors with a higher risk tolerance.

Of course, each of these alternatives comes with its own pros and cons. Carefully research your options and look for ways to mix and match these financial tools to create a more tailored savings strategy that meets your needs now and in the future.

Frequently Asked Questions

The Bottom Line

The best three-year CD rates offer APYs well above 4%, significantly outpacing the national average and many other safe savings vehicles. If you're looking for a low-risk investment to grow your money without market exposure, a high-yield three-year CD could be the right choice. Just be sure to compare rates, evaluate penalties and consider your liquidity needs before committing.

Also, be sure to understand all of your saving and investment options and look for ways to maximize your return by spreading your money across different products.