A no-penalty CD does away with many of the withdrawal restrictions that come with standard CDs.
In most cases, you can withdraw anytime, but some financial institutions have limits.
The best no-penalty CDs offer high APY rates and a flexible withdrawal policy, allowing you to compromise profitability and flexibility.
These types of CDs, also known as liquid CDs, come packaged as different-term CDs with longer-term CDs, enabling you to earn money for a longer time.
Keep reading to learn which banks offer the best no-penalty CD rates.
7 Best No-Penalty CD Rates for December 2024
This section will look at liquid CDs that offer higher-than-average rates while allowing for some flexibility in early withdrawals.
- Western Alliance: 5.40% APY
- Mission Valley: 5.35% APY
- CIT Bank: 3.50% APY
- Marcus by Goldman Sachs: 4.20% APY
- Ally Bank: 4.00% APY
- Synchrony Bank: 4.50% APY
- America First Credit Union: 5.00% APY
1. Western Alliance 
- APY: 5.40%
- Term: 16 month
- Minimum Deposit: $1
The Western Alliance no-penalty CD powered by Raisin is an excellent option if you don’t have much money to invest, as the minimum requirement is $1.
You can withdraw funds after 7 days of funding it for no penalty, but you may only withdraw funds once for the full balance.
Western Alliance doesn’t charge monthly maintenance fees, and they offer competitive options for other CDs if you aren’t worried about tying up your funds for a while.
Open a No-Penalty CD with Western Alliance
2. Mission Valley 
- APY: 5.35%
- Term: 3 month
- Minimum Deposit: $1
Mission Valley is another bank that offers a no-penalty CD powered by Raisin with a minimum $1 deposit. Only this bank’s no-penalty CD is for one of the shortest terms in our list at just three months.
Like many banks on the list, you can withdraw the funds penalty-free after 7 days of depositing them. However, you must withdraw the entire amount to withdraw funds early.
The nice thing about a 3-month CD is you can reinvest the funds if you don’t need them when the CD matures, but you aren’t worried about tying up your funds too long, even if it’s in a no-penalty CD.
Open a No-Penalty CD with Mission Valley
3. CIT Bank 
- APY: 3.50% APY
- Term: 11 Month
- Minimum Deposit: $1,000
CIT Bank offers a No Penalty CD that comes with a term of 11 months and a minimum opening deposit of $1,000.
You can withdraw your money and any interest earned after seven days from funding your CD. Since this is a no-penalty CD, there are no early withdrawal fees.
There are no maintenance fees, and opening the account is entirely free.
4. Marcus by Goldman Sachs 
- APY: 4.20% APY
- Term: 7 Month
- Minimum Deposit: $500
Marcus by Goldman Sachs is offering a no-penalty CD with a term of 13 months.
They also have two additional CDs, one with a 7-month term and another with an 11-month term, but with lower APYs (0.45% and 0.35%, respectively).
There is a minimum deposit requirement of $500 to open the account.
You can withdraw the total balance without paying a fee 7 days after funding the account.
If you are unsure which CD will work out the best for you, Marcus’ website offers a handy calculator to compare.
All you need to do is enter the amount you wish to deposit and choose the CD. Once completed, you will get an informative graphic showing how much interest you can earn.
Open a No-Penalty CD with Goldman Sachs
5. Ally Bank 
- APY: 4.00% APY
- Term: 11 Month
- Minimum Deposit: $0
Ally Bank consistently makes it to the top lists, and there is no exception here with their 11-month no-penalty CD.
You can withdraw your money at any time provided that six days have passed from funding your CD without incurring any penalty whatsoever.
Ally Bank does not charge any maintenance fees, so you can keep all your money.
No minimum deposit is required to open the CD, and you get a reward in the form of an increase on the APY when you renew.
Open a No-Penalty CD with Ally
7. Synchrony Bank 
- APY: 4.50%
- Term: 11 month
- Minimum Deposit: $0
The Synchrony Bank no-penalty CD offers a fixed interest rate with no penalty for early withdrawal. Like most CDs, you must wait six days to withdraw the funds, but there’s no penalty.
However, there’s a catch. You must withdraw the entire amount if you need any of it. You can’t take out what you need and leave the rest.
Synchrony also offers fixed-rate CDs with early withdrawal penalties with APRs up to 5.40%.
Open a No-Penalty CD with Synchrony
5. America First Credit Union 
- APY: 5.00% APY
- Term: 1 Year
- Minimum Deposit: $500
America First Credit Union’s no-penalty CDs work slightly differently from what the rest of the competition offers.
Instead of giving you the option to withdraw at any point, you can only withdraw without paying the penalty during the first five days of each quarter.
The term is 12 months long, with a minimum deposit of $500. Unlike other CDs, you can also make additional deposits during the CD term.
These additional deposits are limited to $10,000 per month. You cannot deposit more than $100,000 in Flexible CD accounts.
Open a No-Penalty CD with America First
What is a No-Penalty CD?
Typically, CDs require you to invest your funds for the entire term. For example, if you invest in a 12-month CD, you cannot access your funds before then. If you do, you’d pay a penalty, usually equal to three months of interest.
A no-penalty CD, however, allows you to withdraw funds, usually the entire amount once, without facing a penalty. Most banks pay a slightly lower APY for the convenience, but it can be nice knowing you can access your funds.
What To Consider Before Getting A No-Penalty CD
No-Penalty CDs come in different shapes and sizes, so when looking for the best no-penalty CD rates, there are other factors to consider.
While there is no one best no-penalty CD, you choose the one that best fits your requirements by looking at the account features.
These features, which tend to change from one bank or credit union offering such CDs to the next, can help you choose the best account.
APY Rate
The APY (Annual Percentage Yield) rate tells you how much money you can expect to earn on the money you deposit in the CD.
Since you might be looking at an early withdrawal, always ensure the rate compounds daily to maximize your take-home profits. The higher the APY rate, the more money you’ll earn.
Withdrawal Terms
Most no-penalty CDs allow you to withdraw at any point after an initial grace period, which usually lasts a few days.
It is important to note that this is not always the case. Some financial institutions may offer a regular window during which you can withdraw your money without paying a fine.
FDIC Insurance
FDIC-insured banks offer insurance on money saved in their accounts, usually up to $250,000.
While it’s unlikely that you’ll need it, since member FDIC banks have to pass rigorous tests to offer this insurance, it’s still good to have.
NCUA Insurance
Many credit unions offer NUCA insurance, which works similarly to FDIC insurance.
For a credit union to offer this to its customers, it must be a federal credit union. Non-federal credit unions may provide other forms of insurance, so be sure to ask.
Online and Mobile Banking
Online and mobile banking offer additional services and conveniences for account holders.
Using these banking apps, you can access your account from just about anywhere, helping you avoid queues and making for easier and faster withdrawals.
Initial Deposit
Since CDs are deposit accounts, many come with an initial deposit requirement.
Some also require a minimum balance in your account before you can earn any interest.
This requirement may put some CDs out of reach, depending on how much money you plan to deposit.
Pros & Cons
Just like everything else, no-penalty CDs have pros and cons.
It’s essential to know these to help you decide if getting this type of CD is the right choice for your financial goals.
Pros:
You get competitive rates.
Generally speaking, no-penalty CDs offer competitive rates. The rates are exceptionally competitive compared to checking and even some savings accounts.
Another benefit of CDs is that the rate is fixed and will last for the entire term of the CD.
However, you might find that some high-yield savings accounts might offer a higher interest rate.
You won’t pay fees for making an early withdrawal.
The biggest drawback of traditional CDs is the early withdrawal penalty.
When you take out a conventional CD, your money is locked in for the term, with early withdrawals incurring hefty fines.
No-penalty CDs do not have any early withdrawal penalties.
This flexibility allows you to withdraw your money should you suddenly find yourself in a situation where you need the funds.
In the long term, this can be a better financial decision than using your credit card, especially if you miss payments.
Cons:
The rates on offer are lower than other CDs.
As you might imagine, the ability to make an early withdrawal without getting a penalty comes at a price.
In most cases, this will be a lower APY rate than you would otherwise earn for a fixed CD of an equal term. While you get flexibility, you might be losing out on potential profits.
You can use one of the many free online CD calculators to work out how much money you can expect to earn.
If this does not meet your expectations, consider a no-penalty CD alternative instead. We will discuss a few different ones below.
You cannot make more than one deposit and one withdrawal.
In most cases, CDs (including no-penalty CDs) only allow one deposit at the beginning of the term.
When it comes to making withdrawals, you only get to make one withdrawal for the entire balance, with no partial withdrawals allowed.
There are exceptions such as America First Credit Union that enable you to make additional deposits every month; however, this is the exception rather than the rule.
How to Find the Best No-Penalty CD Rates
Like any financial investment, there are other factors to consider when choosing the best no-penalty CD rates. While the highest rate is great, you should factor in the minimum required deposit, monthly fees, and withdrawal terms.
Make sure the big picture makes sense. For example, if you have the option between a no-penalty CD that pays 3% and 5%, but the 3% CD requires a $2,000 deposit and the 5% only $100, and you only have $100 to invest, you need the lower APY CD.
Our list of the best no-penalty CD rates can point you in the right direction. Then you must figure out which CD’s requirements you can meet.
No-Penalty CD Alternatives
The most significant advantage of no-penalty CDs over other CDs is the flexibility to withdraw your money before the term ends without penalty.
If the long-term commitment makes you uncomfortable, you might want to consider opening a CD ladder instead.
CD Ladders
CD ladders utilize several CDs that start with different terms. For example, you can get 3 CDs with term lengths of 3 months, six months, and nine months.
When the CD reaches its maturity date, you renew it for the longest term in your ladder, which, in this case, is nine months.
By setting up CDs this way, you get the higher rate offered on longer terms while having a CD mature in a maximum of 3 months, at which point you can withdraw it penalty-free.
Keep in mind that this is a relatively short-term ladder. You can also set up a longer-term ladder by taking out CDs with longer terms.
High-Yield Savings Accounts
Another option you might want to consider is a high-yield savings account.
These accounts offer APY rates comparable to no-penalty CDs, and you can make several monthly withdrawals penalty-free.
Some accounts have a six withdrawal limit per month, even though the federal law regarding the withdrawal limit doesn’t exist. Still, you do not need to withdraw the entire amount – making them especially useful if you plan on making several withdrawals and deposits.
Using CDs to Build Your Credit Score
If you’re looking to improve your credit score, CDs can be an excellent tool to help you do this in certain situations.
Many financial institutions allow CD bank account holders to take out a loan against the CD, which is used as collateral.
Generally speaking, this type of loan is reported as a secured installment loan to the credit bureaus that the bank or credit union uses. Still, it’s always wise to confirm this.
Frequently Asked Questions
What is the difference between a high-yield CD and a No Penalty CD?
A high-yield CD is a particular CD that offers higher-than-usual APY rates, thus offering a high yield on the money you deposit.
These CDs come with long terms and no option to make early withdrawals.
On the other hand, no-penalty CDs allow account holders to withdraw money before the terms end without paying stiff penalties.
On the flip side, rates are much lower than those offered on a high-yield CD, so you will not make as much money, even if you keep your money in the CD for the entire term.
Are no-penalty CDs good?
No-penalty CDs can be an excellent way to save money.
If you’re setting money aside for an emergency fund or it’s your first time opening a CD, no-penalty CDs can be an excellent option.
With no penalties to pay should you wish or need to make an early withdrawal, they have less risk and can still help you get a great rate to grow your savings.
Does Synchrony have a No-Penalty CD?
Yes, Synchrony Bank has a no-penalty 11-month CD. It pays a 4.50% APY and has no minimum balance requirement. You can withdraw funds as soon as six days after depositing them, so you don’t have to worry about excessive fees or not being able to access your funds.
No-Penalty CDs Are An Excellent Way To Grow Your Money
When it comes to personal finance, a no-penalty certificate of deposit can be a great advantage.
While even the best no-penalty CD rates are not as enticing as regular CD rates, penalty-free withdrawals before maturity can be a great advantage.
If you’re looking for the best CD, keep in mind that there is more to consider aside from no-penalty withdrawals. The APY rate can greatly affect how much money you make, provided you can hold the CD for the entire term.
The good news is that there are many CD options, so take the time to consider everything before making your final decision.
If you have trouble saving, a CD can be one of the best financial products to help you embark on a healthier financial journey.
You can only make one withdrawal for the entire amount that might hold you back from doing so.
Other savings products, such as money market accounts and online savings accounts, allow multiple monthly withdrawals, making it much harder to save money.
Consider taking it one step at a time. A 6-month CD might not earn you enough money to retire, but in 6 months, you’ll be that much richer and ready to take on a longer-term CD.
Remember that, after all, Rome wasn’t built in a day. A small step forward is almost always better than nothing at all.
Our Methodology
We’ve gathered information about no-penalty CDs from banks around the country. We look at maintenance fees, APYs, minimum balance requirements, and withdrawal terms.
We focus on customer satisfaction scores from the Better Business Bureau and ensure all banks on our list are FDIC-insured.
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