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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
Best No-Penalty CD Rates
SkyOne Federal Credit Union 1 Year No Penalty CD - Editorial Name Only :SkyOne Federal Credit Union 1 Year No Penalty CD - APY APYWestern Alliance Bank 16 Month No-Penalty CD - Product Name Only :Western Alliance Bank 16 Month No-Penalty CD - APY APYTechnology Credit Union 5 Month No Penalty CD - Editorial Name Only :Technology Credit Union 5 Month No Penalty CD - APY APYUSALLIANCE Financial 11 Month No Penalty Certificate - Product Name Only :USALLIANCE Financial 11 Month No Penalty Certificate - APY APYAmerica First Credit Union Flexible Certificate - Product Name Only :America First Credit Union Flexible Certificate - APY APYCIT Bank No Penalty 11-Month CD - Product Name Only :CIT Bank No Penalty 11-Month CD - APY APYMarcus 13 Month No-Penalty CD - Product Name Only :Marcus 13 Month No-Penalty CD - APY APYAlly No Penalty CD - Product Name Only :Ally No Penalty CD - APY APYSynchrony No-Penalty CD - Product Name Only :Synchrony No-Penalty CD - APY APY
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
No-Penalty CD FAQs
What is a no-penalty CD?
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.
How much do early withdrawal penalties usually cost?
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.
How do CD rates work?
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.
Which is better, a no-penalty CD or a regular CD?
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.
Which is better, a no-penalty CD or a high-yield savings account?
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.
Is a no-penalty CD a good place to store an emergency fund?
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
SkyOne Federal Credit Union 1 Year No Penalty CD - Product Name Only
SkyOne offers the highest no-penalty CD rate on Raisin. Raisin is 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.
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.
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, since Raisin doesn't offer checking accounts. And keep in mind that Raisin offers other no-penalty CDs with competitive interest rates.
Term length: 12 months
APY:
Western Alliance Bank 16 Month No-Penalty CD - Product Name Only
Western Alliance pays the second highest no-penalty CD rate on Raisin. Not only does this CD pay a great interest rate, but you only need
Term length: 16 months
APY:
Technology Credit Union 5 Month No Penalty CD - Product Name Only
The
If you want to do all your banking with at one financial institution, you may prefer one of the other banks or credit unions on this list.
Term length: 5 months
APY:
USAlliance Financial 11 Month No Penalty Certificate - Product Name Only
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
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.
Term length: 11 months
APY:
America First Credit Union Flexible Certificate - Product Name Only
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.
Like most credit unions, America First compounds your interest monthly rather than daily, which will limit how much you earn over time.
Term length: 12 months
APY:
America First Credit Union Review
CIT Bank No Penalty 11-Month CD - Product Name Only
CIT Bank pays a competitive rate on its no-penalty CD.
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.
Term length: 11 months
APY:
Marcus No-Penalty CD - Product Name Only
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.
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.
Term lengths: 7 months, 11 months, 13 months
APY:
Ally No Penalty CD - Product Name Only
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.
Ally pays a good rate on its no-penalty CD, but you can earn higher rates with some of its others CDs. The
Term length: 11 months
APY:
Synchrony No-Penalty CD - Product Name Only
Synchrony is another financial institution that lets you open a no-penalty CD with
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.
Term length: 11 months
APY:
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:
| Institution | BBB grade |
| USALLIANCE Financial | D- |
| Raisin | B+ |
| CIT Bank | A- |
| America First Credit Union | A+ |
| Ally | A |
| Marcus by Goldman Sachs | A+ |
| Synchrony | A+ |
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 a B+ 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:
Insider
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.