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Most CDs charge you a fee if you need to withdraw money from your account before the term ends. But with a no-penalty CD, you won’t have to pay an early withdrawal penalty.
No-penalty CDs aren’t very common, so you only have a few strong banks to choose from. The best no-penalty CD rate is 5.30% APY on a 4-month Ponce Bank No Penalty CD, powered by Raisin and 5.30% APY on a 12-month FVCbank No Penalty CD, also powered by Raisin. If you want even more term options and are willing to consider banks that charge penalties, check out our overall best CD rates guide.
Best No-Penalty CD Rates
These are our picks for the best no-penalty CDs. Our top picks for CDs are protected by FDIC or NCUA insurance. Although Silicon Valley Bank, Signature Bank, and First Republic Bank have recently been shut down, keep in mind money is safe at a federally insured financial institution. When a financial institution is federally insured, up to $250,000 per depositor is secure in a bank account.
Compare the Best No-Penalty CDs
Annual Percentage Yield (APY)
5.26%
Minimum Deposit Amount
$1
Annual Percentage Yield (APY)
5.18%
Minimum Deposit Amount
$1
USAlliance Financial 11 Month No Penalty Certificate
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
USAlliance Financial 11 Month No Penalty Certificate
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
On USAlliance Financial’s website
USAlliance Financial 11 Month No Penalty Certificate
Details
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
America First Credit Union Flexible Certificate
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
America First Credit Union Flexible Certificate
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
America First Credit Union, NCUA insured.
America First Credit Union Flexible Certificate
Details
Annual Percentage Yield (APY)
5.00%
Minimum Deposit Amount
$500
Ally No Penalty CD
Ally is one of the best online banks and an excellent choice for CDs. Its CD stands out from competitors because they have Ally High Yield CD – Minimum Deposit opening deposit requirements, standard-to-low early withdrawal penalties, and great CD rates.
Details
Annual Percentage Yield (APY)
4.55%
Minimum Deposit Amount
$0
Marcus 13 Month No-Penalty CD
Annual Percentage Yield (APY)
4.50%
Minimum Deposit Amount
$500
Marcus 13 Month No-Penalty CD
Annual Percentage Yield (APY)
4.50%
Minimum Deposit Amount
$500
On Marcus by Goldman Sachs’s website
Marcus 13 Month No-Penalty CD
Details
Annual Percentage Yield (APY)
4.50%
Minimum Deposit Amount
$500
No-Penalty CD FAQs
A no-penalty CD is a certificate of deposit that allows withdraw money before the end of your term without paying an early withdrawal penalty. The catch is that most banks require you to withdraw your entire balance — you can’t just take out what you need and leave the rest. In most cases, you must wait at least seven days after opening the CD to withdraw funds with no penalty.
Early withdrawal penalties usually cost between 90 and 365 days interest as an early withdrawal penalty, but a bank may charge less or more in interest. Banks typically charge higher early withdrawal penalties for longer terms. A bank might charge 90 days interest for a 3-month term and 365 days interest for a 5-year term, for instance. Every institution charges different early withdrawal penalties.
CD rates work by locking in your rate for the entire term. For example, if you open a 1-year CD at 2%, you’ll earn 2% for the entire year. If you renew your CD after it matures, you’ll earn the new rate available in a year. There are exceptions to the fixed-rate rule. Some institutions offer variable-rate CDs or CDs that allow your rate to change after a predetermined amount of time.
A no-penalty CD is better than a regular CD if you’re worried about needing money before the CD matures. This way, you won’t have to pay a penalty if you take out money early. But if you need more term options or a higher interest rate, you’ll want to open a regular CD.
A high-yield savings account is better than a no-penalty CD if you want easy, frequent access to your savings. A no-penalty CD doesn’t charge you for withdrawing money, but institutions limit how often you can take out cash. In most cases, you have to withdraw all your funds if you want to access money early.
A no-penalty CD could be a good place to store an emergency fund, but a high-yield savings account or even a money market account is probably better. Many no-penalty CDs also require you to withdraw all your money if you need funds early. But with a savings or money market account, you can just take out what you need and leave the rest in the account to continue earning interest.
No-Penalty CD Reviews
Ponce Bank 4 Month No Penalty CD
This account is powered by Raisin, a digital savings marketplace that connects you with fixed-rate CDs, no-penalty CDs, savings accounts, and money market accounts that pay some of the highest interest rates in the industry.
Not only does this CD pay a great interest rate, but you only need $1 to open an account.
Term length: 4 months
APY: 5.30% APY
What to look out for: Raisin doesn’t offer checking accounts, so it may not be the best option if you want to do all your banking with the same company.
Raisin Review
FVCbank 12 Month No-Penalty CD
The FVCbank 12 Month No-Penalty CD is the second account on Raisin that pays 5.30% APY for a no-penalty CD. This CD pays a great interest rate, and you only need $1 to open an account.
Term length: 12 months
APY: 5.30% APY
What to look out for: Raisin doesn’t offer checking accounts, so it may not be the best option if you want to do all your banking with the same company.
Technology Credit Union 5 Month No Penalty CD
The second highest no-penalty CD rate at Raisin is 5.26% APY on a 5-month Technology Credit Union CD. If you plan on opening multiple CDs, you might like this option from the savings marketplace, too.
Not only does this CD pay a great interest rate, but you only need $1 to open an account.
Term length: 5 months
APY: 5.26% APY
What to look out for: Raisin doesn’t offer checking accounts, so it may not be the best option if you want to do all your banking with the same company.
mph.bank 6 Month No Penalty CD
The third highest no-penalty CD rate at Raisin is 5.20% APY on a 6-month mph.bank CD. If you plan on opening multiple CDs, you might like this option from the savings marketplace, too.
Term length: 6 months
APY: 5.20% APY
What to look out for: Again, Raisin doesn’t have checking accounts, so it’s not ideal if you want to do all your banking with the same institution. Also, you’ll need to be comfortable with a completely digital experience.
Mission Valley Bank 3 Month No Penalty CD
This CD offers the fourth highest rate powered by Raisin. The digital platform is a good option if you want to build a CD ladder using CDs with several different terms. As with all Raisin accounts, you just need $1 to open this CD.
Term length: 3 months
APY: 5.18% APY
What to look out for: You’ll have to be comfortable with an online-only banking experience. It also may not be the best option if you want to do all your banking at one institution. Also, keep in mind that Raisin offers other no-penalty CDs with competitive interest rates.
USAlliance Financial 11 Month No Penalty Certificate
You might like this account if you’re eligible to meet one of the credit union’s membership requirements. USAlliance Financial Certificates also have a low minimum opening deposit of $500.
Term length: 11 months
APY: 5.00% APY
What to look out for: To join USAlliance Financial you must 1) live in a select area in Massachusetts, Connecticut, New Jersey, or New York 2) work for a select employment group, or 3) become a member of the American Consumer Council, Arco of Westchester, Tread Lightly! or the Council of Community Services.
America First Credit Union Flexible Certificate
America First Credit Union gives you more flexibility with deposits and withdrawals than most banks. Unlike other institutions, America First lets you continue depositing money into your CD after you’ve opened it, up to $10,000 per month. Many banks make you take out all your funds if you need to make an early withdrawal, but America First lets you make partial withdrawals.
Term length: 12 months
APY: 5.00% APY
What to look out for: Like most credit unions, America First compounds your interest monthly rather than daily, which will limit how much you earn over time.
America First Credit Union Review
CIT Bank No Penalty 11-Month CD
CIT Bank pays a competitive rate on its no-penalty CD.
Term length: 11 months
APY: 4.90% APY
What to look out for: You can find a slightly lower minimum deposits elsewhere. But if you already bank with CIT Bank, it could be worthwhile to use the bank for a no-penalty CD, too.
CIT Bank Review
Ally No Penalty CD
Ally CDs don’t require an opening deposit, so you can open a CD with any amount. It also pays a competitive interest rate for a no-penalty CD.
Term length: 11 months
APY: 4.55% APY
What to look out for: Ally pays a good rate on its no-penalty CD, but you can earn higher rates with some of its others CDs. The Ally High Yield CD pays high rates on various term lengths. You also may want to look at the Raise Your Rate CD, which lets you increase your rate should Ally’s rates go up. You’d be able to increase rates once during a 2-year term and twice during a 4-year term.
Ally Bank Review
Marcus No-Penalty CD
Most banks only have one term length for no-penalty CDs. But Marcus offers multiple term options, making it easier to find one that’s a good match. The most competitive no-penalty CD at Marcus is the 13-month term, which pays much more than other banks.
Term lengths: 7 months, 11 months, 13 months
APY: 0.35% to 4.50% APY
What to look out for: Marcus’ no-penalty CD doesn’t have any major red flags. Just remember that the 13-month term pays significantly better rates than the 7-month and 11-month terms.
Marcus Bank Review
Synchrony No-Penalty CD
Synchrony is another financial institution that lets you open a no-penalty CD with $0.
Term length: 11 months
APY: 4.40% APY
What to look out for: You’ll want to consider whether you have a preference on how you’ll withdraw money from a CD. When you’re ready to cash out your CD, you must call Synchrony. Some other banks will let you cash out your CD through online banking.
Synchrony Bank Review
Bank Trustworthiness and BBB Ratings
The BBB measures businesses by looking at customer complaints, honesty in advertising, and transparency about business practices. Here are the scores from the Better Business Bureau for each institution:
BBB grades range from A+ to F. Most of our top picks have strong grades overall, but here are the reasons behind the grades for the companies that don’t have an A+ from the bureau:
USAlliance Financial received a D- rating from the BBB because it has failed to respond to five customer complaints on the BBB website.
Raisin has an A- rating due to the volume of complaints against the business. CIT Bank has an A- rating because it has failed to respond to a customer complaint. Ally has an A rating because it has a few unresolved complaints on the BBB website.
Synchrony has been involved in a few public controversies. In 2023, Synchrony was required to pay $2.6 million in a settlement when accused of calling customers about bank accounts they didn’t have. In 2021, the bank also was required to pay $3.5 million in a settlement when accused of making unreasonable phone calls to debtors living in California.
Why You Should Trust Us: Expert Advice on Choosing the Best No-penalty CD
To learn more about what makes a good CD and how to choose the best fit, four experts weighed in:
Here’s what they had to say about CDs. (Text is edited for clarity.)
How do you know if you’re choosing the right bank or credit union for your CD?
Make sure it’s FDIC or NCUA insured. Also, keep your desired banking experience in mind. Do you like walking into a bank? You need a local branch. Is it OK if you never see your bank? Then you’ll probably be happy with an online-only bank. Do you write checks? Do you not write checks? Thinking through how experience before you make that decision.
– Tania Brown, certified financial planner at SaverLife
Create a list of what you prioritize most in a bank account. Some banks charge monthly service fees for accounts, so I would see what the requirements are to waive the monthly service fee and whether I think I could meet those requirements. If you’re searching for an interest-earning bank account, pay attention to interest rates. The account should pay a higher interest rate than the average bank account.
– Sophia Acevedo, certified educator in personal finance, banking reporter, Personal Finance Insider
How do you decide how long to keep your money in a CD?
Think about when you’ll need the money, then compare that with the current CD rates. Consider what makes sense from a financial perspective, but also from the perspective of your own personal timing.
– Roger Ma, certified financial planner with lifelaidout® and author of “Work Your Money, Not Your Life”
Have a plan for your funds. If the money you’re putting in a CD is supposed to be a house fund, and you want to wait for another two years to buy a house, that’s when you should plan to have this money.
– Mykail James, MBA, certified financial education instructor, BoujieBudgets.com
How can someone decide if a no-penalty CD is right for them?
Pay attention to the interest rate and see if it’s significantly higher than other savings options. If it is almost the same as a high-yield savings account or money market account, you might prefer one of the latter because you can make additional deposits. With a no-penalty CD, you’ll only be able to deposit money when you open an account or when the term ends.
– Acevedo, Personal Finance Insider
Methodology: How we Chose the Best No-Penalty CDs
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY (Annual Percentage Yield), for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various CDs so you don’t have to.
We reviewed CD offerings from around a dozen national banks using our CD rates methodology. For each account, we compared the minimum opening deposits and interest rates. We also considered the overall banking experience at each bank by assessing customer support availability, mobile app ratings, and ethics.