The top 5 CD rates for August 2024, with an APY of up to 5.51%

The APYs listed in this article are accurate as of the time of publication. They may change as the Fed rate fluctuates. CNBC Select will update as new information becomes available.

A three-month CD can help you accumulate a significant amount of money in a short period of time with a guaranteed interest rate, making it an ideal option for those looking to save for an upcoming vacation.

We have compared numerous accounts to identify the top three-month CDs with APYs significantly higher than the national average. Our top picks are all insured by either FDIC or NCUA and have been thoroughly evaluated using our methodology.

Compare CD rates

Best for high APY

Best from an online bank

Best for low minimum deposit

Best for a large deposit

Best from a credit union

TotalBank CDs

One of the highest APYs on a three-month CD can be found at TotalBank, but there's a high minimum deposit of $25,000. Despite the high minimum, the combination of the high APY and the high minimum makes for good savings. With a 5.51% APY on a $25,000 balance, you would earn $337.48 in interest over just three months.

CD terms offered

Six months, twelve months, twenty-four months, thirty-six months, sixty months, one hundred and twenty months.

Monthly fee

None

Early withdrawal penalty fee

Withdrawing from a CD before its maturity date will incur a penalty based on the CD's term. The penalty is calculated using 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

Bask Bank CDs

Bask Bank's three-month CD offers a competitive 5.25% APY, with a minimum deposit of $1,000.

CD terms offered

Six, twelve, eighteen, and twenty-four months are equivalent to three, six, nine, and twelve months, respectively.

Monthly fee

None

Early withdrawal penalty fee

Withdrawing interest that has been credited to your account during the current term is penalty-free, but if any portion of your principal balance is withdrawn, you will be subject to an early withdrawal penalty.

The fee for CDs with terms of 6 months to 1 year is 90 days of simple interest calculated on the withdrawn principal amount.
CDs that exceed 12 months are subject to a fee of 180 days of interest calculated on the amount withdrawn.

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

Quontic Bank CDs

Quontic Bank provides a competitive 5.50% APY on its three-month CD with a minimum deposit of $500, which is the lowest we found. Quontic is an online-only bank and a CDFI that supports economically disadvantaged communities across the country.

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:

The penalty for time deposits up to 12 months will be equivalent to the interest earned for the entire term.
The penalty for time deposits with a term of 12 to 24 months is equivalent to one year's interest.
For time deposits lasting 24 months or more, the penalty is equivalent to two years' worth of interest.
If the accrued interest exceeds the penalty amount, any excess accrued interest will be paid to you.
If the accrued interest is less than the penalty amount, a reduction of the principal balance may occur.

Popular Direct CDs

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. With a minimum deposit requirement of $10,000, you can earn 5.25% APY on your balance, which would net you nearly $130 in interest earnings alone over just three months.

CD terms offered

Six, twelve, twenty-four, thirty-six, forty-eight, sixty months.

Monthly fee

None

Early withdrawal penalty fee

For terms less than 91 days: The fee is 89 days simple interest
For periods between 91 days and 12 months: The fee is calculated using simple interest.
For terms between 12 and 36 months, the fee is calculated as 270 days' worth of simple interest.
For terms between 36 and 60 months: The fee is calculated as simple interest for 365 days.
For terms equal to or greater than 60 months, the fee is calculated as 730 days of simple interest.

Dow Credit Union CDs

If you prefer banking with a credit union, Dow Credit Union is a good option. It offers a three-month CD at 5.30% APY, which is the highest rate we found from a credit union. The minimum deposit is only $500, and 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

12, 24, 36, 48, 60, 72, 84, 96, 108

Monthly fee

None

Early withdrawal penalty fee

If a withdrawal is made before the maturity of a certificate, an early withdrawal penalty may be applied, resulting in a loss of principal.

What's a CD?

A CD, or certificate of deposit, is a type of deposit account that earns interest. It offers a fixed rate of interest for a set period of time, ranging from six months to five years. However, if you withdraw your funds before the end of the term length, you may be subject to an early withdrawal penalty fee and a loss of accrued interest.

How CDs work

Opening a CD account involves depositing money and earning a fixed interest rate for a specified period, with term lengths usually ranging from three months to five years.

A CD and a savings account are similar, but the traditional CD model has some key differences.

At the start of the CD term, you can only deposit money once. Additional contributions are not allowed during the term. There is often a minimum deposit requirement, typically $500 or more.
Withdrawing your money before the end of your CD term can result in an early withdrawal penalty, which may be calculated based on the interest earned or the interest you would have earned over a specific period. The penalty fees can vary depending on your bank and the length of your CD term, but generally, longer CDs result in more costly penalties.

When the CD term ends, savers can receive their initial investment plus the interest earned, or they can transfer the funds to a new CD without any action required. CDs automatically renew at the interest rate offered at maturity unless specified otherwise.

An advantage of choosing a CD over a high-yield savings account is that CDs offer a fixed APY, which means you can secure the rate the day you open the account. This can be beneficial if you open an account during a time when interest rates are high. However, if interest rates decrease after you open the account, a CD may not be as advantageous.

CDs are typically not subject to monthly fees and are federally insured, making them a safe savings option.

How to choose a CD

When selecting a CD, prioritize the length of time you want to keep your money tied up. Choose a CD based on that time frame and the rate will follow. For instance, if you are saving for a down payment on a home in a few years, opt for a longer-term CD such as a three- or five-year option and then compare rates from banks for those specific CD terms. Shorter CD terms, such as three- to six-month CDs, are suitable for beginners looking to save (and grow) their money for a short-term goal, such as a vacation.

How to compare CDs

To accurately compare CDs, ensure that you are examining CDs with the same term across various banks. This way, you are comparing "apples-to-apples." After determining the desired CD term, compare the interest rates, minimum deposit requirements, and any associated fees, such as early withdrawal penalties.

Pros and cons of CDs

The advantages and disadvantages of CDs are similar, and your perception of them depends on various factors. Our opinions are presented below.

Pros of CDs

Fixed interest rates (a good thing when rates are high)
You cannot access CD funds until the maturity date, which helps prevent impulsive spending.
Different CD types offer various options, including bump-up CDs, no-penalty CDs, add-on CDs, jumbo CDs, and IRA CDs.

Cons of CDs

Low fixed interest rates can be detrimental if they occur during the duration of a CD term.
If you need the money from CD funds, it's a bad thing because you can't touch them until the term is up.
Early withdrawal penalty fees may apply
It is generally not possible to make additional deposits into a CD after the initial deposit has been made at the start of the term.
Usually a minimum deposit requirement, typically $500 and up

Why trust CNBC Select?

Our mission at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions when it comes to managing their finances. Each CD review we publish is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of savings and banking products. At CNBC Select, we maintain the highest journalistic standards and ethics, and we earn a commission from affiliate partners on many offers and links. However, our content creation process is entirely independent of our commercial team and any external third parties. To learn more about our methodology for selecting the best three-month CDs, please refer to our website.

Our methodology

Online banks and credit unions offer higher APYs than most national brick-and-mortar banks.

We ranked our top three-month CDs based on their APYs, minimum deposit requirements, penalties for early withdrawals, ease of use, and industry rankings. Our top picks were ranked according to their high APY, online bank, low minimum deposit, large deposit, and credit union.

All CDs on this list are FDIC- or NCUA-insured up to $250,000 per person. The rates and fee structures advertised by banks for their CD accounts are not guaranteed and may change without notice. They often fluctuate based on the Fed rate. When you open a CD account, you are typically locked into the APY offered at account opening for the entire term length.

The amount of money you earn from a CD depends on several factors, including the term length, the initial deposit, the annual percentage rate (APY) offered when you opened the account, and any associated fees. Typically, a larger deposit and a higher interest rate will result in higher earnings. However, if you withdraw your funds early, you may be subject to penalty fees that reduce your principal balance and earnings.

Most banks and institutions mandate a deposit of new funds when opening a CD account for the first time, preventing the transfer of existing funds from an account at that bank.

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