Best national 3-year CDs paying most since 2011

Clear piggy bank with coins

First we waited for the Federal Reserve to make its historic rate hike.

Then we waited for the holidays to pass and the banking industry to get back to work.

Now the new year is well underway, and we're still waiting for commercial banks to follow the Fed's lead and boost their savings rates.

We're looking at the same top nationally available 3-year yield we've had since summer, although now you can get it from two banks instead of one.

And it means that local deals from credit unions and community banks are still the best way to earn top dollar on your CD investments, up to 2.78% right now on 3-year certificates.

As for ripple effects from the Fed, will we see any meaningful increases this winter, or will it take the Fed's next rate hike to trigger some true improvement?

The top national deals

Since the end of July, E-Loan has stood head and shoulders above the competition for nationally available 3-year returns, with its 1.85% APY yield outpaying the runner-up by almost two tenths of a percentage point.

That peak in 36-month returns — the best national deal we'd seen in almost four years — was reached after a handful of banks started jockeying for top billing and increased the lead from 1.50% APY last spring to 1.66% APY by early summer.

That's when E-Loan stepped in, surprising everyone with a slew of dramatic rate increases that not only took command of the top rank across five CD terms, but completely quelled the competition in 3-year returns for almost six months.

Finally this week, another bank has given E-Loan some competition.

EverBank — one of the contenders in those fast and furious lead changes of early summer — has rejoined the game, upping its 36-month yield to exactly match E-Loan's.

Its minimum deposit is a modest $1,500 versus E-Loan’s $10,000 requirement. And EverBank’s early-withdrawal penalty, while fairly unfavorable at 9 months' interest, is not as harsh as E-Loan's 12-month penalty.

Of course, we had hoped for more movement than this by now. So we'll console ourselves by remembering that just a little over two years ago, the top national 3-year yield was a mere 1.40% APY.

TOP 36-MONTH CD RATES: Nationally Available Bank Deals

Bank APY Minimum Deposit
EverBank 1.85% $1,500
E-Loan 1.85% $10,000
Silvergate Bank 1.66% $25,000
State Farm Bank 1.65% $500
Capital One 360 1.60% No minimum
Radius Bank 1.60% $500
5Star Bank 1.60% $1,000
Sallie Mae Bank 1.60% $2,500
Colorado Federal Savings Bank 1.60% $5,000
Nationwide Bank 1.59% $500
First Internet Bank of Indiana 1.56% $1,000
Barclays Bank 1.55% No minimum
California First National Bank 1.55% $5,000
Ally Bank 1.55% $25,000
State Bank of India - Chicago 1.51% $2,500
State Bank of India - New York 1.51% $5,000
American Bank 1.50% $500
AloStar Bank of Commerce 1.50% $1,000
CIT Bank 1.50% $1,000
Gulf Coast Bank & Trust 1.50% $2,000
Synchrony Bank 1.50% $2,000
Discover Bank 1.50% $2,500
North American Savings Bank 1.46% $1,000
TAB Bank 1.46% $1,000
Giant Bank 1.46% $2,500
Nordstrom Bank 1.45% $1,000
BankDirect 1.45% $10,000

Earning more with local deals

Fortunately, many savers can do better by investing through a credit union or community bank, the best of which are paying far above 2% on certificates of deposit in the 3-year range.

Two of these credit unions even offer their ranking-worthy CDs to savers nationwide:

As usual, though, it's the truly 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%
Navy Federal Credit Union Military and defense affiliated 30 2.50%
Self Reliance New York Federal Credit Union New York 36 2.33%
Cedar Falls Community Credit Union Iowa 37 2.30%
Allegany County Teachers Federal Credit Union Maryland 36 2.27%
University of Iowa Community Credit Union Iowa, Illinois 37 2.25%
Veridian Credit Union Iowa, Nebraska 39 2.25%
First Federal Credit Union Iowa 30 2.25%
Georgetown Bank Massachusetts 30 2.10%
Bank Gloucester Massachusetts 36 2.02%
Cape Ann Savings Bank Massachusetts 30, 36 2.02%
Gateway Community Bank Wisconsin, Illinois 36 2.02%
San Patricio County Teachers Federal Credit Union Texas 36 2.02%
NavyArmy Community Credit Union Texas 36 2.00%
1st United Services Credit Union California 36 2.00%
First Ipswich Bank Massachusetts 36 2.00%
Vibrant Credit Union Illinois, Iowa 33 2.00%
Linn Area Credit Union Iowa 33 2.00%
Institution for Savings Massachusetts 30 2.00%
Gulf Coast Federal Credit Union Texas 36 1.95%
Collins Community Credit Union Iowa 30 1.91%
Security Service Federal Credit Union Texas, Utah, Colorado 36 1.90%
Security First Credit Union Texas 37 1.90%
Union Bank & Trust Nebraska, Kansas 30 1.85%

Following the Fed's lead — or not

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 three to five 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.

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 had condemned savers to pitiful returns for almost seven years.

Then last month, the Fed finally began what is expected to be a gradual process of returning interest rates to "normal" levels over the next few years.

The initial step was a small one, an increase of just a quarter of a point in what's called the federal funds rate.

That's what commercial banks pay to borrow money from each other through the Fed. It's the financial lever the nation’s bank for banks uses to control interest rates throughout the economy.

It's unknown — even by the Fed, which relies heavily on the latest economic data leading up to each rate decision — how many additional increases we'll see in 2016.

The Fed's committee had previously indicated that four quarter-point increases over the course of the year seemed likely.

But that was before global security concerns hit the front pages this week, causing some Wall Street analysts to bet on June for the next Fed rate hike, rather than the previously anticipated March.

Whenever it happens, one thing sadly seems clear: It's going to take more than a single nudge from the Fed to get banks to move off the dime in normalizing their own rate sheets.