I'd consider it fishy. If it's covered by FDIC, then it might not disappear completely, but 3% isn't a risk-free investment nowadays, since the only investments where you have the highest chance of getting back your whole investment, Treasury bonds, are barely higher than 3%.
They're obviously taking your money, investing it in higher risk securities, taking a cut off the top, and paying the remainder to you. If you are comfortable with that, then go for it. If not, don't.