By Tim MaxwellBest 3-Month CD Rates: Up to 4.25% for July 2025
If you're looking for a safe place to park your money for a few months while earning a solid yield, a three-month certificate of deposit (CD) may be a smart move. These CDs earn more than standard savings accounts, and many offer better returns than high-yield savings accounts.
The best three-month CD rates are over 4.25%, far surpassing the national average three-month CD rate of 1.55% in July 2025, according to Curinos data. Here's what to know about finding the best three-month CD rates so you can maximize your return.
3-Month CD Rate Trends
If you're looking for steady growth, three-month CDs tend to deliver stable returns. According to data from Curinos, average yields on these short-term CDs have barely budged in recent months.
While the Fed doesn't set CD rates directly, the rates banks, credit unions and online banks offer on CDs tend to change when the Federal Reserve adjusts its target federal funds rate.
Higher rates mean substantially higher annual percentage yields (APYs), which are important to consider when allocating your investments and deposits. In July 2023, the average three-month CD rate was a measly 0.10%, according to data from the Federal Deposit Insurance Corp. (FDIC). At that time, banks were slow to raise their CD rates despite the Federal Reserve's aggressive series of interest rate hikes from March 2022 through July 2023.
How Much Can You Earn With a 3-Month CD?
Because CDs have a fixed rate, calculating your returns is pretty straightforward. Simply multiply your deposit by the APY and divide by four, since a three-month CD represents one-quarter of the year.
For example, if you deposit $10,000 into a three-month CD with a competitive rate of 4.25%, you could earn $106.25 in interest. That's several times more than what you could earn from a CD with the national average rate.
Of course, your returns may vary depending on your financial institution. Banks and credit unions set their CD rates independently, so it's a good idea to compare offers before you open an account to make sure you're getting the best available rate.
The CD term you select can also affect your potential returns as well as the type of CD you choose. For example, bump-up CDs may start with lower initial rates since they allow you to increase your rate if market rates rise.
Learn more: How Much Interest Do CDs Pay?
| Initial Deposit Amount | Average APY of 1.55%* | Competitive APY of 4.25% |
|---|---|---|
| $1,000 | $3.88 | $10.63 |
| $10,000 | $38.75 | $106.25 |
| $100,000 | $387.50 | $1,625.50 |
*Source: Curinos LLC, July 2025
How to Find the Best 3-Month CD
If you're considering a three-month CD, here are a few tips to help you choose the right one for your situation.
- Understand your goals. If you just need a safe place to park your money for a few months, a three-month CD can be a solid fit.
- Consider how soon you'll want the funds. If you're not 100% certain you can lock your funds in an account for three months, look for a CD with a mild penalty. You might be better off stashing your cash in a more accessible account, like a high-yield savings account.
- Pay attention to compounding frequency. CD interest can be compounded daily, monthly or annually. Look for CDs that compound frequently since the more it compounds, the more you can earn over time.
- Match the minimum deposit to your savings level. CDs require you to open your account with a minimum deposit ranging from $500 to $2,500 or more. Make sure the CD term you choose lines up with the amount of money you're prepared to lock up for three months.
- Plan ahead. Three months isn't a long time, so it's a good idea to consider your plans once the funds reach maturity. For example, if you're unsure of your long-term plans for the money, you might opt for a CD that doesn't automatically roll over to give you more flexibility.
Tip: When shopping for three-month CDs, it's vital to understand the CD's early withdrawal penalty. You could lose money if you withdraw funds from your three-month CD before its maturity date.
Learn more: How to Choose the Best CD Account
Is Now a Good Time to Get a 3-Month CD?
It may be a good time to get a three-month CD if you want a guaranteed return but still need access to your money soon. If it seems likely the Fed will cut rates in the near horizon, then locking in a competitive short-term rate now could help you maximize your return. This is especially true while many three-month CDs offer a healthy return.
If you don't need your money for a while, a longer-term CD might be a better option. You could lock in today's rates for a longer period before yields change.
Pros and Cons of 3-Month CDs
A three-month CD can give you a guaranteed return on your deposit, but it comes with some drawbacks you must consider first.
Pros
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Short term length: The primary benefit of three-month CDs is that they only lock up your money for a short period. You can withdraw your funds with a guaranteed return in three months.
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Substantially higher yield than standard savings accounts: Many three-month CDs offer rates that are several times higher than standard savings accounts and even beat some long-term CDs.
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Helps keep your options open: A three-month CD keeps your options open since your money isn't committed for long. Upon maturity, you can keep the funds, roll them into a new CD or put them in an alternative investment option.
Cons
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Yields may be lower: Short-term CDs typically pay less than long-term options, but some three-month CDs may offer slightly higher rates.
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Includes an early withdrawal penalty: If you pull funds from your account before the account's maturity date, you'll likely be hit with an early withdrawal penalty. In that case, you'll usually forfeit a significant amount of interest or pay a flat penalty fee.
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Funds could lose value: If the inflation rate is higher than your CD rate, your purchasing power could actually decrease over the three months.
Learn more: The Pros and Cons of Certificates of Deposit (CDs)
Alternatives to 3-Month CDs
Before committing to a three-month CD, it's worth exploring other alternatives that may better match your needs.
- Longer-term CDs: If you won't need your money for a while, you could lock in a higher APY with a six-, 12- or 24-month CD. It may make sense if you believe CD rates will fall soon.
- High-yield savings accounts: CDs often pay more than high-yield savings accounts, but when it comes to a three-month CD, the difference in earnings may be negligible. A high-yield savings account may offer comparable or better returns than a three-month CD, without locking up your funds or risking early withdrawal penalties.
- Money market account: Money market accounts combine features of a savings account and a checking account. You get a competitive interest rate along with limited check-writing or debit card access. But in this case, what you gain in flexibility you may give up in interest, as MMAs typically earn less than CDs.
- Treasury investments: With Treasury securities, including Treasury bills, bonds and notes, you lend your money to the federal government, which then repays you with interest over time. Since they're backed by the full faith and credit of the U.S. government, they're considered one of the safest investments available. Like CDs, they offer fixed returns, but with potential tax advantages.
- Stocks and mutual funds: If you're comfortable with more risk and have a longer investment horizon, you'll likely earn more investing in stocks, mutual funds and other options that have the potential to deliver stronger returns over the long term.
Learn more: Alternatives to CDs
Frequently Asked Questions
The Bottom Line
If you want to grow your money without risking it in the market, a three-month CD could be a solid option. Top rates are currently over 4% APY, well above the national average for CDs and standard savings accounts.
Before opening an account, take time to review the terms, especially early withdrawal penalties. And make sure the CD's maturity date aligns with your financial goals and when you need the money.
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About the author
Tim Maxwell
Tim Maxwell is a former television news journalist turned personal finance writer and credit card expert with over two decades of media experience. His work has been published in Bankrate, Fox Business, Washington Post, USA Today, The Balance, MarketWatch and others. He is also the founder of the personal finance website Incomist.
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