Clark Howard

Is a 3% CD Worth It Right Now?

As the U.S. economy continues to try to ease inflation, money expert Clark Howard says a notable rise in interest rates points toward a promising trend:

 “You can actually earn money on your money again,” Clark says.

Savings rates have been in the dumps for the past several years, but things are starting to change. Clark says that one of the best ways to earn a higher rate of interest on your money right now is to park it in a certificate of deposit (CD). These are deposits that you have to leave in the bank for a fixed term, anywhere from one month to five years. Your money will make more than it would sitting in a savings account, usually at a fixed rate but sometimes at a variable rate.

If you want a return on your hard-earned money, Clark suggests you take action: “Don’t let inertia be your enemy. Move that money!”

This article will tell you about CDs and other savings vehicles where you can earn a decent return right now.

How You Can Get 3% Interest on a CD Right Now

Clark says he was recently at his credit union when the teller said, “You know, we have a special coming next week. We’re paying 3.3% on CDs up to 33 months.” “I was like, ‘Really?'” says Clark. “And so I put some money into a CD there.”

Team Clark member Anthony Hazzard has a 3.20% CD with American Airlines Federal Credit Union (AAFCU).

Below we’ve included some CDs with current annual percentage yields (APYs) that are 3% or better.

Ally Bank

  • 3-year term: 3.00%

Capital One

  • 2-year term: 3.00%
  • 5-year term: 3.25%

Discover Bank

  • 3-year term: 3.00%
  • 4-year term: 3.05%
  • 5-year term: 3.25%

Each of these institutions makes Team Clark's list of best online banks. But just as Clark and Anthony found, your local credit union may have even better interest rates.

Should You Open a 3% CD Right Now?

One of the major distinguishing factors of a CD is that it takes time to “mature,” or come to tern. Without being penalized, you typically won’t be able to touch your money for one to five years depending on a CD.

So, is a 3% CD worth it right now?

Clark’s general rule is that when a CD is earning substantially more interest than a savings account or when interest rates are falling and it looks like they’re going to continue to fall, then it makes sense to put your money in a CD.

The average interest rate for savings accounts is 0.13%, according to Bankrate's Aug. 17 weekly survey. Sounds like a CD makes perfect sense right about now.

Before you open a CD, make sure that you understand the varieties and what they offer at your respective financial institution. Pay particular attention to:

  • Whether the term of the CD matches your savings goal
  • Whether there's a minimum deposit to open an account
  • Whether there's a penalty for early withdrawal

More Ways To Get Good Returns on Your Money Right Now

Higher rates are not just limited to CDs. Savings accounts, money market accounts and Series I savings bonds, which Clark has been talking about for a while now, are all giving decent returns.

Series I Savings Bonds

The initial interest rate on new Series I savings bonds is 9.62% and can be purchased at that rate through October 2022.

  • How to buy: Visit TreasuryDirect.
  • Limit: $10,000 maximum purchase per year.
  • Withdrawal terms: Minus the last three months of interest if cashed out before five years.

Clark says that he has owned Series I savings bonds for around 25 years. He plans to hold them for all 30 years which is the amount of time it takes for a bond to fully mature.

Money Market Accounts

“If you do business with Fidelity Investments or Charles Schwab, they’re both paying over 2% right now on money market,” Clark says. “They’ve got a ton of different ones you’ll see,” he says.

Read our review of Charles Schwab.

  • How to buy: Visit or to open a money market account.
  • Limit: There is no limit on a money market account, although there may be a charge if the balance falls before a specific minimum.
  • Withdrawal terms: There may also be a fee if too many withdrawals are made within a month.

Read our review on Fidelity Investments.

Savings Accounts

Many online banks currently have competitive rates on their savings accounts. For example, Ally Bank, one of's best online banks, is offering 1.75% on its savings account as of August 22, 2022.

Clark recommends keeping your money in an online bank because they typically:

  • Offer 24/7 access to your money
  • Charge fewer fees
  • Pay higher interest

It’s that last point that Clark really loves. “Because they’re online only, they don’t have all the normal bank overhead, so they can pay you much better deals,” he says.

Read our guide on the best high-yield savings accounts.

Final Thoughts

The current market offers a great opportunity to capitalize on some great interest rates that typically beat traditional banks. Clark says he expects us to continue to see decent rates of earnings on the Series I savings and more for a while to come.

How can you take advantage? You've got to leave that "giant monster mega-bank," as Clark calls them.

“The most important thing is to do not. Do not. Do not. Let your money sit and rot at a traditional bricks-and-mortar bank, again, unless you don’t like your money,” he says.

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