Three Year Certificates of Deposit (CD) rates from online banks are often above average if you are willing to open and manage your account using the Internet. Three years is an intermediate term for CDs and banks will often pay you a bit more of a premium to keep your money locked in for a longer duration.
December 9, 2016
3 Year CD National Average: 0.77% ?
|APY||Vs. Nat'l Av.||MIN|
|Sallie Mae Bank||1.60%||2.08x||$2,500||Reviews (1)|
|Navy Federal Credit Union||1.60%||2.08x||$100,000||Reviews|
|Pentagon Federal Credit Union||1.51%||1.97x||$1,000||Reviews|
|Barclays Bank Delaware||1.50%||1.95x||$0||Reviews|
|Colorado Federal Savings Bank||1.35%||1.76x||$5,000||Reviews|
|CNB Bank Direct||1.31%||1.71x||$1,000||Reviews|
|Bank of Internet||1.30%||1.69x||$1,000||Reviews|
|American Express Bank, FSB||1.25%||1.63x||$0||Reviews|
|USAA Federal Savings Bank||0.96%||1.25x||$175,000||Reviews|
|New Dominion Direct||0.50%||0.65x||$1,000||Reviews|
Three year CDs from online banks offer a yield that is between .30 and .60 percentage higher than a one year CD from an online bank. While in general, online banks offer higher CD rates than branch-based banks, some smaller community banks and credit unions offer rates even higher than online banks. Savers should compare online and branch based rates if looking for the highest rate irrespective of how the CD is opened and managed.
A three year CD is a medium term CD and commits the user to keeping the money in the bank for three years in return for a fixed rate during this period of time.
In general, in a rising rate environment savers should keep their money liquid and not commit it for long periods of time. Three year CDs offer a compromise as an intermediate amount of time to lock money with a premium for doing so.
In a falling rate environment, savers should try and lock in their money for as long as possible. Three year CDs can also play a role in this type of environment depending on how long savers think rates will fall and stay low. For example, following the financial crisis in 2008, when the top CD rates were above 6% APY; with the benefit of hindsight, a saver would have been wise to lock money into a 5 year CD, preserving that 6% rate into 2013.
Some savers like to use three year CDs as part of a CD ladder, in which different term CDs help to diversify the portfolio from changes in interest rates.
All banks listed on BestCashCow are FDIC insured; BestCashCow.com strongly recommends that you stay within FDIC insurance limits and that if you are unsure of how the limits affect you, you visit the FDIC website.
To understand all of the income generating options available to a saver, please view the Income Generating Investments Comparison Chart.
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