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7 Best No-Penalty CD Rates in August 2022

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What if I need the money? That’s a typical concern for people considering a certificate of deposit (CD). CDs tend to have better interest rates than savings accounts, but you generally have to keep your money in that CD until it matures, as early withdrawals come with penalties.

For the more hesitant, though, no-penalty CDs are great if you desire the higher rate offered by a CD, but also want fee-free access to your money. Yearslong commitments on CDs can be intimidating, as emergencies or unexpected financial challenges could hit. But with a no-penalty CD, you won’t be penalized for withdrawing funds early.

The best no-penalty CD rate is Sallie Mae Bank via SaveBetter’s 2.70% annual percentage yield (APY).

Best no-penalty CD rates in July 2022

Patriot Bank via SaveBetter No-Penalty CD

TermAPYMinimum opening deposit
17 months2.55% on all balances$1

17 Month CD - via Savebetter from Patriot Bank (CT)

SaveBetter is a fintech company that partners with banks and credit unions on exclusive, competitive APYs. With SaveBetter accounts, your entire experience is through SaveBetter, not with the bank or credit union in question. All deposits are in insured omnibus custodial accounts. SaveBetter doesn’t charge any fees.

Interest is compounded daily and credited monthly on this CD. If you withdraw early, interest is credited through the withdrawal date. You’re allowed a full withdrawal at no cost, but you must wait at least one week after opening the CD.

SEE DETAILS

on Patriot Bank (CT)’s secure website

Member FDIC

Sallie Mae Bank via SaveBetter No-Penalty CD

TermAPYMinimum opening deposit
14 months2.70% on all balances$1
14 Month No-Penalty CD via SaveBetter from Sallie Mae Bank

Read above to learn about SaveBetter, whose offerings handily top our list of the best no-penalty CD rates this month.

Like the Patriot Bank via SaveBetter No-Penalty CD, interest is compounded daily and credited monthly. You can make one free full withdrawal of this CD after it’s been open for one week. Interest is credited through the withdrawal date.

SEE DETAILS

on Sallie Mae Bank’s secure website

Member FDIC

CIT Bank No-Penalty CD

TermAPYMinimum opening deposit
11 months2.00% on all balances$1,000

11-Month No-Penalty CD from CIT BankCIT Bank is part of First Citizens CIT Bank is part of First Citizens Bank, a privately owned financial institution. CIT has a few branch locations in California and Arizona, but mainly operates as an online bank.

CIT offers several traditional CD terms, but its No-Penalty CD is its best certificate account. All CDs require a $1,000 minimum, and you can close out your entire No-Penalty CD beginning a week after the account opening.

SEE DETAILS

on CIT Bank’s secure website

Member FDIC

Sallie Mae Bank via SaveBetter No-Penalty CD

TermAPYMinimum opening deposit
10 months2.50% on all balances$1

10 Month No-Penalty CD via SaveBetter from Sallie Mae BankThis CD operates exactly like the other Sallie Mae Bank via SaveBetter No-Penalty CD above, but with a shorter term of 10 months.

SEE DETAILS

on Sallie Mae Bank’s secure website

Member FDIC

Rising Bank No Penalty CD

TermAPYMinimum opening deposit
15 months2.15% on balances $1,000 to $1 million$1,000

15 Month No Penalty CD from Rising Bank

The online-only Rising Bank, which launched in 2018, is a division of St. Louis-based Midwest BankCentre. Rising Bank offers a variety of deposit accounts, loans, auto refinancing and other products.

With this CD, you can make a full withdrawal for free at least one week after depositing the funds. But note that interest is credited every three months on this CD, so you could lose out on a decent amount of interest depending on when you make that withdrawal.

SEE DETAILS

on Rising Bank’s secure website

Member FDIC

Bellco Credit Union Smart Move CD

TermAPYMinimum opening deposit
36 months1.65% on all balances$2,500

36 Month Smart Move CD from Bellco Credit UnionTo be eligible to join Bellco Credit Union, you’ll need to live or work in certain areas of Colorado, work for an eligible company, have a family member who’s already a member or donate at least $10 to the Bellco Foundation. You’ll also have to pay a $5 membership fee and a $25 share deposit. The credit union has several branch locations in Colorado.

Unlike many other financial institutions on this list, Bellco Credit Union notably has multiple terms for no-penalty CDs: 18-month, 24-month, 30-month and 36-month terms. Since the 36-month no-penalty has the highest APY at 1.65%, it may be the best option. With this CD, you can make one penalty-free withdrawal during the account term, as long as you keep at least $1,000 in the account.

SEE DETAILS

on Bellco Credit Union’s secure website

NCUA Insured

Ally Bank No Penalty CD

TermAPYMinimum opening deposit
11 months1.60% on all balancesNone

11 Month No Penalty CD from Ally BankAlly is another popular online-only bank, one that tends to offer competitive deposit rates on products like CDs and savings accounts. It also has mortgages and other loan products.

An Ally Bank No Penalty CD has a term of 11 months, pays 1.60% APY and allows you to withdraw your money fee-free after the first week. Ally also has traditional CDs with terms ranging from three months to five years, as well as a bump-up CD called the Raise Your Rate CD. An Ally No Penalty CD compounds interest daily, which leads to marginally higher returns than CDs that compound monthly or quarterly.

SEE DETAILS

on Ally Bank’s secure website

Member FDIC

What is a no-penalty CD?

A no-penalty CD allows you to withdraw your money without incurring a penalty; this is unlike traditional CDs, which have penalties for early withdrawal before maturity. Usually those penalties are calculated as a few months of interest paid on the account balance.

All CDs are timed deposits with a predetermined interest rate and term. CDs generally pay higher rates than savings accounts and other deposits, but you sacrifice liquidity with traditional CDs. If, however, you know that you might need to access your funds before your CD matures, a no-penalty CD is a good alternative to traditional CDs.

Some no-penalty CDs allow you to withdraw your entire balance and close the account, while others require you to keep a portion of your funds in the CD. Some allow multiple withdrawals, but not all do. Read the fine print to learn the specific conditions for early withdrawals from a no-penalty CD.

No-penalty CD vs. savings account

There are some important differences between a no-penalty CD and a savings account. Savings accounts can have some monthly withdrawal limits, but you can deposit money whenever. On the other hand, no-penalty CDs may only allow you to withdraw your money once or only allow you to withdraw a portion.

Moving money into and out of a savings account is much easier. If you need more liquidity, a savings account is better than a no-penalty CD. At the same time, a no-penalty CD may have better interest rates than a savings account and protects you from withdrawal penalties if you need the money before it matures.

No-penalty CD pros and cons

Here are some of the most important advantages and disadvantages.

ProsCons
You can withdraw funds without incurring an interest penaltyLimits to how much or how often you can withdraw funds
May pay higher interest rates than savings accountsGenerally pay lower interest rates than traditional CDs
Interest rates are guaranteed for the entire termTerms tend to be shorter than many traditional CDs

Other types of CDs

No-penalty CDs are one of several timed deposit accounts offered by financial institutions.

  • Traditional CDs: A traditional CD requires you to keep your funds in the account for a set time frame to avoid an early withdrawal penalty. MagnifyMoney regularly surveys numerous banks and credit unions to find the best CD rates available nationwide.
  • Jumbo CDs: Some CDs require a high minimum opening deposit and may pay better interest rates than traditional CDs. Those are called jumbo CDs, and opening balances of $100,000 are often required.
  • Bump-up CDs: Most CDs lock in interest rates for the entire term, but many institutions offer CDs under various names that allow you to bump the CD to a higher interest rate once before the CD reaches maturity.
  • Brokered CDs: Brokerages offer CDs as a low-risk investment option, and they can buy and sell CDs on the market. Brokered CDs can be traded like other securities, and their value could change.

Summary of the best no-penalty CDs in August 2022

Financial institutionTermAPYMinimum opening deposit
Patriot Bank via SaveBetter17 months2.55% on balances $1 or more$1
Sallie Mae Bank via SaveBetter14 months2.70% on balances $1 or more$1
CIT Bank11 months2.00% on all balances$1,000
Sallie Mae Bank via SaveBetter10 months2.50% on balances $1 or more$1
Rising Bank15 months2.15% on balances $1,000 to $1 million$1,000
Bellco Credit Union36 months1.65% on all balances$2,500
Ally Bank11 months1.60% on all balancesNone

Methodology

Using information from our sister site DepositAccounts and other sources, we reviewed the best certificates of deposit with no penalty for early withdrawals. These no-penalty CDs have the highest available annual percentage yields (APYs) and minimum balances needed to earn the APY of $10,000 or less. Financial institutions must be nationally available and have deposit insurance through the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). Any credit unions included must have broad membership eligibility requirements. No-penalty CDs with any term are eligible for consideration.