Top 3-Year CD Earnings – July 2023
Top 3-Year CD Earnings - July 2023
Taking Advantage of Top-Yielding CD Accounts
If you’re looking for a way to grow your savings with almost zero risk, then taking advantage of the generous Annual Percentage Yields (APYs) offered on top-yielding Certificate of Deposit (CD) accounts could be the perfect option for you. Savings rates on CDs have been on the rise since last year, following the Federal Reserve’s effort to lower inflation through several interest rate hikes. And as interest rates have risen, many banks have started offering even more competitive yields on savings accounts.
At their most recent meeting, the Fed decided to once again raise rates by a quarter of a point, bringing the federal funds rate to the highest level it’s been in 22 years — a target range of 5.25% to 5.5%. This rate increase, and any future increases, could push savings rates slightly higher. However, it’s essential to keep in mind that as inflation starts to cool, it’s a good idea to take advantage of these high savings rates while they last.
Currently, many of the top-yielding accounts for 1-year CDs, 3-year CDs, and 5-year CDs have rates well over 4%. So, if you’re saving for an upcoming purchase or looking for a fixed and safe return on your cash, opening a 3-year CD account could be a smart option. With these accounts, your money is locked away for a fixed period of time, typically 1-5 years, unless you’re prepared to pay a fee to withdraw it early.
Here are some of the top-yielding 3-year CD accounts available now:
| Institution | APY | Minimum Balance |
|---|---|---|
| U.S. Senate Federal CU | 5.13% | $1,000 |
| Quorum Federal Credit Union | 4.85% | $1,000 |
| Lafayette Federal CU | 4.84% | $500 |
| MYSB Direct | 4.76% | $500 |
| Summit Credit Union | 4.30% | $500 |
| Credit Human | 4.35% | $500 |
| CFG Bank | 4.30% | $500 |
| Hughes Federal Credit Union | 4.86% | $1,000 |
| Seattle Bank | 4.60% | $1,000 |
| Crescent Bank | 4.75% | $1,000 |
| Bread Financial | 4.75% | $1,500 |
| First Internet Bank | 4.75% | $1,000 |
Understanding CD Accounts
A CD account is a financial product that allows you to lock your cash away for a fixed period, typically ranging from 1 to 5 years. These accounts are not suitable for cash you plan on using in the near future, as early withdrawals usually incur fees. However, they are an excellent option if you’re saving for a future purchase or event and want to grow your cash without accessing it.
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CD accounts offer a fixed return on your cash, meaning the rate won’t go up or down based on market conditions. This provides certainty, but it can be a downside if rates elsewhere rise, and you don’t benefit from the increase. Nevertheless, CD accounts are appealing to those who value risk-free returns, as they are not subject to the volatility of the stock market.
In addition, most CD accounts are insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), depending on whether they are opened through a bank or credit union. This ensures that your cash is safe, even if your financial institution closes. FDIC insurance protects up to $250,000 per account (or $250,000 per person in a joint account), while NCUA insurance protects up to $250,000 per credit union member.
Choosing the Right CD Term
Since your money is essentially locked away in a CD account, it’s crucial to carefully consider how long you want to tie up your cash. Different CD options offer varying terms, such as 1-year, 3-year, or 5-year CDs. For instance, if you plan on purchasing a vehicle in around 3 years, opting for a 3-year CD can help you bolster your savings for when the time comes. It’s a “set it and forget it” type of investment, where your cash will grow thanks to compound interest with little effort on your part.
However, if you anticipate needing your money sooner, a 5-year CD account might be risky as you may have to pay a fee to access your money before the CD matures. To help you understand how much you can earn on your cash over time, you can use our savings calculator to simulate the potential growth with a 3-year CD account.
If you’re considering opening a CD account, explore your options, compare rates, and find an account that suits your financial goals. With the current market conditions and rising interest rates, taking advantage of top-yielding CD accounts can be an excellent strategy for growing your savings. Remember to weigh the benefits of a fixed and safe return against the lack of liquidity before making a decision.
Related Content – Best 5-Year CD Rates – 1-Year CD Rates – Best No-Penalty CD Rates – CD vs. High Yield Savings Account: Which is Better?
