Three-year Certificates of Deposit (CDs) remain a popular choice for savers seeking guaranteed returns without the volatility of the stock market. Currently, the highest rates available reach up to 4.05% Annual Percentage Yield (APY). This guide breaks down the best options available as of December 2025, including minimum deposit requirements, early withdrawal penalties, and key pros and cons for each institution.
Why CDs Matter Now
CDs offer a stable, predictable return on your savings, especially in a fluctuating economic environment. Unlike savings accounts with variable rates, CD rates are locked in for the term. However, withdrawing early incurs penalties, making them best suited for funds you won’t need immediate access to.
The current rate landscape reflects a period of relative stability after aggressive interest rate hikes in 2022 and 2023. The Federal Reserve’s future actions—including potential rate cuts—could influence CD yields, making now a strategic time to lock in favorable terms.
Best 3-Year CD Rates (December 2025)
Here’s a breakdown of the leading options, with details on APY, minimums, and penalties:
1. Mountain America Credit Union: 3.98% – 4.05% APY
- Minimum Deposit: $5 – $500
- Early Withdrawal Penalty: 180 days of dividends
- Pros: Competitive rates, options for standard, growth, and youth certificates with varying deposit requirements.
- Cons: Penalties apply for early withdrawal. Growth certificates require monthly automated deposits.
2. Utah First Credit Union: Variable APY (Check current rates)
- Minimum Deposit: $2,000
- Early Withdrawal Penalty: May apply (confirm with the credit union)
- Pros: Above-average rates, comprehensive financial services.
- Cons: Higher minimum deposit, membership limited to Community Volunteers of Utah or immediate family.
3. Sallie Mae Bank: Variable APY (Check current rates)
- Minimum Deposit: $2,500
- Early Withdrawal Penalty: 180 days of interest
- Pros: High-interest rates with more lenient early withdrawal penalties.
- Cons: No physical branches, higher minimum deposit.
4. Bread Savings: Variable APY (Check current rates)
- Minimum Deposit: $1,500
- Early Withdrawal Penalty: 180 days of interest
- Pros: High interest rates, manageable early withdrawal penalties.
- Cons: No physical branches, still requires a substantial minimum deposit.
5. Synchrony Bank: Variable APY (Check current rates)
- Minimum Deposit: $0
- Early Withdrawal Penalty: 180 days of simple interest (no penalty on interest withdrawal)
- Pros: No minimum balance requirement, lenient withdrawal options.
- Cons: No physical locations.
6. Alliant Credit Union: Variable APY (Check current rates)
- Minimum Deposit: $1,000
- Early Withdrawal Penalty: Up to 180 days of interest
- Pros: Good rates, lenient membership criteria, strong mobile banking.
- Cons: Membership qualification required; no physical branches.
7. Randolph-Brooks Federal Credit Union: Variable APY (Check current rates)
- Minimum Deposit: $1,000 – $4,999.99
- Early Withdrawal Penalty: 180 days of interest
- Pros: Competitive rates; membership benefits as a credit union.
- Cons: Limited to Texas residents and affiliated groups.
8. First Internet Bank of Indiana: Variable APY (Check current rates)
- Minimum Deposit: $1,000
- Early Withdrawal Penalty: 360 days of interest
- Pros: Decent interest rates.
- Cons: Steep early withdrawal penalty; no physical branches.
9. Popular Direct: Variable APY (Check current rates)
- Minimum Deposit: $10,000
- Early Withdrawal Penalty: 365 days of interest
- Pros: Good APY for large deposits.
- Cons: Highest minimum deposit; severe early withdrawal penalties.
10. BMO: Variable APY (Check current rates)
- Minimum Deposit: $1,000
- Early Withdrawal Penalty: 270 days of interest
- Pros: Strong branch presence; promotional CD specials.
- Cons: Steeper penalties than some competitors; lower minimum deposits available elsewhere.
Understanding CD Penalties
Early withdrawal penalties are a key consideration. Most CDs assess a fixed number of months’ worth of interest as a penalty. For example, a 180-day penalty means you’ll forfeit the interest you would have earned over half a year if you withdraw before maturity.
The longer the CD term, the more severe the penalty, so consider your liquidity needs before committing.
The Future of CD Rates
The Federal Reserve’s monetary policy significantly impacts CD rates. If the Fed cuts interest rates, as projected, CD yields will likely fall. Locking in a rate now can protect against this decline.
The inverted yield curve—short-term rates higher than long-term—suggests economic uncertainty. While three-year CDs offer stability, other options like high-yield savings accounts and money market accounts may provide greater flexibility.
Conclusion
Three-year CDs remain a reliable option for conservative savers. Mountain America Credit Union currently leads with rates up to 4.05% APY. Evaluate your financial goals, liquidity needs, and the terms of each institution before making a decision. With the potential for rate cuts on the horizon, now may be a favorable time to secure a fixed return on your savings.
