Best national 3-year CDs paying most since 2011

Clear piggy bank with coins

We've enjoyed a nice little upturn in 3-year CD rates this summer, even though the Federal Reserve still hasn't done anything to push interest rates higher.

The top nationally available yield fell as low as 1.40% APY two years ago and was still hanging around 1.50% APY this spring.

Then June arrived, and banks began pushing the best return slightly higher.

First 1.54% APY. Then 1.66% APY. And finally to 1.85% APY — the best national deal we've seen in almost four years.

That last rate was from a somewhat unexpected source — E-Loan.

It's a website run by Popular Community Bank, which has dozens of branches in New York, New Jersey and south Florida.

Popular Community is the mainland division of Puerto Rico's biggest bank, Banco Popular, and its deposits are fully insured by the FDIC.

Banking experts tell us Popular Community is a rapidly growing, well-managed bank that simply needs more money to fund more loans.

That's why it's now offering the top national return on 3-year CDs. And 1-year CDs. And 2-, 4- and 5-year CDs.

Of course, we’d all love to know how long we'll enjoy rates like this from E-Loan, so I recently posed that question to Manuel Chinea, chief operating officer of Popular Community Bank.

Chinea said he expects E-Loan will remain competitive through the rest of this year, "but that doesn’t mean we might not pull back in a particular term as we manage the durations of our deposit portfolio."

TOP 36-MONTH CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
E-Loan 1.85% $10,000
Silvergate Bank 1.66% $25,000
Capital One 360 1.60% No minimum
Sallie Mae Bank 1.60% $2,500
California First National Bank 1.55% $5,000
First Internet Bank of Indiana 1.51% $1,000
State Bank of India - New York 1.51% $5,000
AloStar Bank of Commerce 1.50% $1,000
American Bank 1.50% $500
CIT Bank 1.50% $1,000
Synchrony Bank 1.50% $2,000
EverBank 1.49% $1,500
BankDirect 1.45% $10,000
Barclays 1.45% No minimum
Discover Bank 1.45% $2,500
Nordstrom Bank 1.45% $1,000
State Farm Bank 1.45% $500
Ally Bank 1.40% No minimum
BAC Florida 1.40% $1,500
Colorado Federal Savings Bank 1.40% $5,000
Triumph Savings Bank 1.40% $1,000

Fortunately, many savers can do better by investing through a credit union or a community bank, the best of which are paying well over 2% on their 36-month certificates of deposit.

One credit union even offers a nationally available 3-year CD that rivals the top-paying banks.

Achieva Credit Union is offering a 30-month special of 1.75% APY. Membership in the credit union is open not only to residents of select Florida counties but to anyone in the country who makes a $10 donation to Achieva’s foundation. Note, however, that this credit union requires a one-time membership fee of $15.

As usual, though, it's the local deals that offer the absolutely best returns — up to 2.78% right now.

TOP 3-YEAR CD RATES: Credit Union, Community Bank Deals

Bank States Term (in months) APY
Four Corners Federal Credit Union Arizona, Colorado, New Mexico, Utah 36 2.78%
University of Iowa Community Credit Union Iowa 37 2.40%
Self Reliance New York Federal Credit Union New York 36 2.33%
Collins Community Credit Union Iowa 40 2.07%
Ist Gateway Credit Union Illinois, Iowa 40 2.05%
MIDFLORIDA Credit Union Florida 36 2.02%
Beacon Credit Union Indiana 30 2.01%
Beverly Bank Massachusetts 30 2.00%
Linn Area Credit Union Iowa 33 2.00%
Vibrant Credit Union Illinois, Iowa 33 2.00%
Texasgulf Federal Credit Union Texas 36 2.00%
Cedar Falls Community Credit Union Iowa 37 2.00%
Veridian Credit Union Iowa, Nebraska 39 1.96%
Gulf Coast Federal Credit Union Texas 36 1.95%
Community Bank of Trenton Illinois 30 1.81%

Whether you qualify for a local deal or opt for a top-paying national bank, you’ll definitely want to take advantage of these offers because they pay at least three times more than the current average return of 0.55% APY, according to our weekly nationwide survey of banks and thrifts.

The average return fell as low as 0.43% two summers ago before beginning a slow but steady rebound that's returned the typical yield to where it was in December 2012.

Unfortunately, we're still a long way from February 2007 — before reckless mortgage lending plunged us into the Great Recession — when the average return on 36-month CDs was 3.8% APY.

The Federal Reserve’s subsequent efforts to rescue the economy by pushing interest rates to record lows has condemned savers to pitiful returns for more than six years now.

Fortunately, the Fed still plans to reverse course and begin "normalizing" interest rates sometime this year. The first rate hike could come as soon as its next policy meeting in mid-September.

That’s when we expect to see the return on bank deposits to increase more substantially.