If you’re looking for a way to boost your savings, then a high-yield CD is a great place to start. Unlike traditional savings accounts, the best 3-year CDs give you a much higher annual percentage yield. The national rate averages change often but they start at 0.77% APY and are capped at 1.70% APY for conventional 3-year terms. Choosing a high-yield CD goes beyond this and offers you a much better return on investment. To get you started, here are four of the best 36-month CDs for 2019, sourced from top banks online and conventional, from across the country.
The Best Rates on 36-month CDs
- Transportation Alliance Bank: Best for high-yield, new CDs
- Pennsylvania State Employees Federal Credit Union: Best for funding options
- Live Oak Bank: Best for small business owners
- Ally Bank: Best for account benefits
|Bank||Interest Rate||Early Withdrawal Penalty||Min. Deposit|
|Transportation Alliance Bank||2.10%||180 days’ interest||$1,000|
|PSECU||2.00%||90 days’ interest||$500|
|Live Oak Bank||2.20%||90 days’ interest||$2,500|
|Ally Bank||1.95%||60 days’ interest||$0|
What is a 36-month High-Yield Certificate of Deposit?
A high-yield certificate of deposit is different than a conventional CD. Both are insured by the FDIC or NCUA, but top banks offer you an APY that’s often many times above the current average for conventional CDs, which boosts your savings faster.
CDs usually require a minimum deposit to open, but not always. Deposits can start with as little as $500 and increase from there depending on the institution and term you choose.
A term is a period of time that you agree to leave your funds in the account untouched to get the promised rate when the CD matures. Early withdrawal is permitted, but it usually comes with a hefty penalty. So, it’s best to fund your CD account with money that you’re not going to need during the term that you choose. You can also find CDs with terms as short as three months. CDs also differ from other types of savings accounts, like high-yield savings accounts, savings bonds and IRAs, for example.
36-month CDs vs High-Yield Savings Accounts
High-yield savings accounts offer a much higher APY than conventional savings, but are comparable to certificates of deposit. High-yield savings offer a place to easily access your funds while they grow. There are some limitations imposed by the federal government for the number of withdraws you can make a month, however. They are best for building your emergency savings but differ from CD accounts.
A high-yield CD is a deposit account. It’s not intended for easy access, and early withdrawal imposes a hefty penalty. So, to maximize the benefits, only deposit funds that you will not need for the term of the CD — in this case, 36 months. High-yield CDs offer the best rates over conventional and high-yield savings accounts.
36-month CDs vs Savings Bonds
Like CDs, savings bonds require time and deposit commitment, but here’s the difference: a savings bond is for long-term planning — usually many years. Interest accumulated depends on the bond you choose. For example, Series EE bonds have a low APY but are guaranteed to double over the term. Bonds are not FDIC-insured like CDs but are backed by the full faith and credit of the U.S. government. So, both bonds and CDs are considered relatively safe investments. However, 36-month CDs are more useful, as you can access your fully matured bonds in 36 months, instead of 30 years for bonds’ maturity.
36-month CDs vs IRAs
An IRA is a great choice when you’re ready to save for retirement. They offer better APYs than conventional CDs and earnings are tax-deferred until you retire. As with CDs, early withdrawal incurs a penalty, but IRAs are intended for the long haul. So only deposit funds you won’t need until retirement.
High-yield 36-month CDs offer better rates, but you will receive a 1099-INT each year for annual tax reporting. Unlike IRAs, high-yield CDs can be both short- and long-term and are considered an investment as opposed to a “savings vehicle,” but some high-yield CDs are IRA compatible, though.
The Best 36-month CDs
Transportation Alliance Bank: Best for high-yield, new CDs
TAB has a mobile app for convenience and you get flexibility in deciding how your CD interest compounds. That’s right, you get a choice — daily, weekly or at term-end. Like other top banks, TAB lets you withdraw interest without penalty, but this will reduce your APY at the end of the term.
You should know, though, that early principal withdrawals carry a penalty equal to 180 days of interest on the amount withdrawn. Also, the APY is not fixed and fluctuates with the Consumer Pricing Index or as the institution sees fit. This could work for or against you, depending on the market.
Pennsylvania State Employees Federal Credit Union: Best for funding options
PSECU began in 1934 and has now grown to over 450,000 members strong. Credit unions are not-for-profit institutions and often offer higher rates. So, let’s break it down.
PSECU gives customers 2.25% APY on fixed, 36-month CD rates. There are no account fees to worry about and a low minimum deposit of $500 gets you started. PSECU allows you to set up recurring automatic transfers to continue funding your CD, but this must be done during the initial setup only.
Be advised that the early withdrawal penalty is hefty with 180 days of interest. If the principal dips below the $500 minimum, the CD will be closed. PSECU is located in Pennsylvania, but you don’t have to be as long as you meet certain requirements. You must set up a savings account and you must sign up to support the Pennsylvania Recreational Park Services. If you do this through PSECU, the park services fee is discounted by 50%, totaling $10.
Live Oak Bank: Best for small business owners
Live Oak Bank is still a fairly new bank since it was established a mere 11 years ago, but it makes the list because it offers one of the best 36-month CD rates around and this bank hones in on helping entrepreneurs. Rates for 36-month CDs are currently fixed at 2.15% APY with no account fees.
Live Oak Bank offers online banking and a mobile app for convenience. Your CD will automatically renew at maturity, but you’ll have a 10-day grace period to withdraw or make changes before it does.
Wire charges for money coming in total $15, which is pretty standard, but there’s also a $19 fee for wiring money out, too. The early withdrawal penalty is 180 days of interest, and the minimum deposit to get started is $2,500.
Ally Bank: Best for account benefits
Ally has been around since 1919 and it has an unusual 3-year APY setup with 3 different tiers. So, let’s dive in.
Rates are fixed and you get a 10-day best rate guarantee assuming you fully fund your CD during that time. You can renew your CD at maturity for an additional 0.05% APY as a loyalty reward. The reward rate might change, so always check.
You can open the CD as a revocable or irrevocable trust with a trust agreement, which is a nice feature and Ally high-yield CDs are IRA compatible. Interest is compounded daily, and there are no account fees. Online banking and a mobile app are available, and you get live customer service access 24/7.
The early withdrawal fee is 90 days’ interest, however, and no partial withdrawals are allowed. Rates are fixed but vary according to your initial deposit. Deposit less than $5,000 for 1.95% APY, $5,000 gets you 2.05% APY, and a minimum of $25,000 deposited gets you 2.10% APY.
The Final Word
Whether you seek success or wealth, it’s not going to happen overnight. It takes time to build. Growing your personal savings, whether it’s for a nest egg or something particular in the future, is like that, too. The best 36-month CD rates will get you on the right track to building your savings with some of the highest APYs in the country. There’s no telling how much your savings will grow if you never try.