CDs traditionally lack liquidity, which can be a huge drawback. If you're afraid of being stuck paying early withdrawal penalties in case of an emergency, no-penalty CDs can help you avoid that risk.

A 3-month CD is a short-term CD. Banks and credit unions don't offer it as frequently as 6-month or 1-year CD terms, so you might not find it at all financial institutions. To see how 3-month CDs ...