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Many CDs have a withdrawal fee that you pay if you want to cash out your account before it matures. A no-penalty CD doesn’t require you to pay any fees. Early withdrawal penalty.
There are only a few banks that offer no-penalty CDs. Here are some of our top choices for no-penalty certificates. Our top picks offer low minimum opening deposits and competitive interest rates.
Check out our top picks for the best CDs without any penalties
No minimum opening deposit
Editor’s Rating
Editor’s Rating
Competitive interest rates
Editor’s Rating
Editor’s Rating
Competitive interest rates
Editor’s Rating
Learn more
The website of America First Credit Union
Annual Percentage Yoield (APY).
3.10%
Minimum Deposit Amount
$500
Annual Percentage Yield
3.10%
Minimum Deposit Amount
$500
More details
Annual Percentage Yoield (APY).
3.10%
Minimum Deposit Amount
$500
Pros & Cons
Highlights
Additional Reading
It stands out because: CitiYou can open a 12-month CD without penalty with a $500 initial deposit. A solid interest rate will also be earned.
The term length:12 months
You need to be aware of these things:Citi has brick and mortar banks. However, your options will vary depending on where you are located. Bank branches are located in California and Connecticut, Florida and Illinois, Maryland and Nevada.
CIT Bank No Penalty Certificate of Deposit (CD),
Annual Percentage Yoield (APY).
3.30%
Minimum Deposit Amount
$1,000
CIT Bank No-Penalty Certificate for Deposit (CD),
Annual Percentage Yield
3.30%
Minimum Deposit Amount
$1,000
More Details
Annual Percentage Yoield (APY).
3.30%
Minimum Deposit Amount
$1,000
Pros & Cons
Highlights
Additional Reading
It stands out because: CIT BankYou will get a competitive rate for your no-penalty CD
The term length:11 Months
You need to be aware of these things: You can find a slightly lower minimum deposits elsewhere. However, if you are already a customer of CIT Bank, you might also be able to access a non-penalty CD from the bank.
Annual Percentage Yoield (APY).
3.10%
Minimum Deposit Amount
None
Annual Percentage Yield
3.10%
Minimum Deposit Amount
None
More Details
Annual Percentage Yoield (APY).
3.10%
Minimum Deposit Amount
None
Pros & Cons
Highlights
Additional Reading
It stands out because: AllyThe only institution on our list to not require an initial deposit. This means that you can open any amount of CDs.
The term length:11 Months
You need to be aware of these things:Although Ally offers a great rate for its CD with no penalty, you can also earn higher rates on some of its other CDs. The Ally High Yield CdPays high rates for different term lengths. Also, you might want to consider the Raise Your Rate CDYou can increase your rate if Ally’s rates rise. Rates could be raised once per 2-year term or twice per 4-year term.
Marcus by Goldman Sachs No Penalty CD
Annual Percentage Yoield (APY).
0.3% to 3.05%
Minimum Deposit Amount
$500
Marcus by Goldman Sachs No Penalty CD
Annual Percentage Yield
0.3% to 3.05%
Minimum Deposit Amount
$500
Marcus by Goldman Sachs’s site
More Details
Annual Percentage Yoield (APY).
0.3% to 3.05%
Minimum Deposit Amount
$500
Pros & Cons
Highlights
Additional Reading
It stands out because:Banks usually only offer CDs with no penalty for a single term. However, MarcusMultiple term options are available, making it easier for you to find the right one.
Length of the term:7 months, 11 and 13 months
You need to be aware of these things:Marcus’s no-penalty CD has no major red flags. You may be able to find a slightly higher rate elsewhere if you are looking for a CD term that is longer.
America First Credit Union Flexible Certificate
Annual Percentage Yoield (APY).
2.45%
Minimum Deposit Amount
$500
America First Credit Union Flexible Certificate
Annual Percentage Yield
2.45%
Minimum Deposit Amount
$500
Website of America First Credit Union
More details
Annual Percentage Yoield (APY).
2.45%
Minimum Deposit Amount
$500
Pros & Cons
Highlights
It stands out because: America First Credit UnionThis bank offers more flexibility in withdrawing and depositing money than most. America First allows you to deposit money into your CD even after it’s opened. This is unlike other institutions. You can do this up to $10,000 per month. America First allows you to withdraw a portion of your funds, unlike many banks that require you to take out all of your funds in order to make an emergency withdrawal.
The term length:12 months
You need to be aware of these things:America First, like most credit unions that pay interest on a monthly basis, does not do so daily. This will reduce the amount you can earn over time.
BBB Rating and bank trustworthiness
The BBB assesses businesses based on customer complaints, honesty and transparency regarding business practices, as well as honesty in advertising. These are the scores of each institution from the Better Business Bureau:
Citi is rated F because of its high volume of unresolved customer problems and government actions against it.
CIT Bank, Citi and Citi are our top choices for CDs with no penalty.
2019: The Department of Housing and Urban Development We sided with California Reinvestment Coalition in its allegations against a division of CIT Bank called OneWest Bank. CRC claimed OneWest discriminated against Latinx people and Black people in Los Angeles. Although OneWest did not admit to discrimination, it did pay $7 million for homeownership programs in Los Angeles for racial minorities.
Citi has been in the following public scandals:
- In 2019, the bank accidentally sent $900 million to customers.
- 2020 was the year that banks were required to pay $400 million in a settlement with the Comptroller of the Currency. According to the OCC, the bank used inefficient banking practices.
This issue may concern you.
Trust our recommendations.
Personal Finance Insider’s mission to help smart people make better financial decisions is our goal. We understand that “best” is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. So that you don’t have too, we spent hours comparing the fine print and features of different CDs.
Frequently Asked Questions
Regular CDs are also known as “term CDs” and you will be charged a penalty if you withdraw money before the term ends. Banks usually charge interest earned over a period of time. A bank might charge 90-day interest on a 6-month CD or 180-days interest on a 1-year CD.
You can withdraw money from a CD without penalty and pay no early withdrawal penalties. 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.
You must wait at most seven days after opening the CD in order to withdraw funds without any penalty.
Each institution has its own early withdrawal penalty. You will pay interest that has accumulated over a specified time period or interest that is not yet paid. WouldIf your account hasn’t been open for a while, you can accumulate this amount.
For longer terms, banks typically charge higher penalties for early withdrawals. For example, a bank might charge 90-day interest on a 3-month term or 365-day interest for a 5-year period.
A bank may charge more or less interest.
CDs usually lock in your rate for the whole term. If you open a 1-year CD with 2% interest, you will earn 2% for the year. You’ll get the current rate if you renew your CD within a year.
There are exceptions to this fixed-rate rule. Some institutions offer variable-rate CDs. These CDs allow your rate to change after a set period of time.
Each one has its advantages and disadvantages, so it all depends on what you are looking for in a CD.
No-penalty accounts can be great if you don’t want to have to pay penalties if the CD matures. If you take out money before the CD matures, you don’t have to pay any penalty.
No-penalty CDs have a limited term option. If you want to open a CD for a longer amount of time — and usually earn a higher interest rate as a result — you’ll want to open a regular CD. There are also term CDs available with shorter terms than those offered by no-penalty CDs. This is a good option for people who anticipate that they will need money within the next few months.
There are two options: a CD that does not carry a penalty, or a CD that does. High-yield savings account will depend on several factors.
A savings account is better than a CD if you want to have easy and frequent access your savings. Although no-penalty CDs don’t have a fee for cash withdrawals, institutions do limit the number of times you can withdraw money. If you wish to access your money quickly, you will need to withdraw all of your funds.
The plus side is that a CD locks your rate for the entire term. This could be a good thing, as savings rates have been falling. You don’t have to worry about fluctuating rates by choosing a CD.
Yes, and no.
An emergency savings account with no penalty CD is better than a term CD. You won’t be charged a fee to withdraw the money if you need it.
A high-yield savings accounts is better than a CD with no penalty for emergency funds. You can withdraw money up six times per month from a savings account. Banks are increasing that limit to accommodate the coronavirus pandemic. You can also withdraw your entire account if you have an open CD with no penalty. You can take only what you require and then leave the remainder in your savings account to earn interest.
As an emergency savings tool, you may prefer a money-market account. Money market accounts come with either paper checks or debit cards, which is not the case for savings accounts. This makes it easy to access your savings quickly in the event of an emergency.
APR Regular
Variable between 18.99% and 25.99%
Good to Excellent
Regular APR
18.99% – 25.99% Variable
Credit Score
Good to Excellent
APR Regular
17.99% – 26.74% Variable
Credit Score
Good to Excellent
