MagnifyMoney 
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 can withdraw funds early with no fee.
| Term | APY | Minimum opening deposit |
|---|---|---|
| 14 months | 4.40% on all balances | $1 |
| 10 months | 4.25% on all balances | $1 |
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.
CIT Bank is part of First Citizens Bank, a privately owned financial institution. CIT has a few branch locations in California, Nevada and Arizona, but mainly operates as an online bank.
CIT offers several traditional CD terms, but its no-penalty CD is one of its top two certificate accounts. All CIT Bank CDs require a $1,000 minimum, and you can close out your entire no-penalty CD beginning a week after the bank has received your funds.
Read above to learn about SaveBetter, whose offerings handily top our list of the best no-penalty CD rates this month.
Like the Sallie Mae 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.
USALLIANCE was founded by IBM employees in the 1960s and serves the tri-state area of New York, New Jersey and Connecticut. But anyone can qualify for membership by opting to join one of the charitable organizations listed on their application. USALLIANCE offers traditional checking and savings products, including money market accounts, CDs, HSAs and IRAs.
With USALLIANCE’s 11-month certificate special, you can withdraw the full amount before maturity without penalty, at which point your CD will be closed out. This does not apply to the first 7 calendar days after the date of deposit, and partial withdrawals aren’t allowed. Interest is compounded daily and credited on the last day of every month.
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 the funds have been received by the bank, but you’ll forfeit any interest not yet credited to your account. Because interest is only credited every three months on this CD, that means you could lose out on a decent amount of interest depending on when you make that withdrawal.
To 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 $5 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 3.15%, it may be the best option, but their 24- and 30-month CDs come in not too far below our list, at 2.15%. 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. Two other perks of the account are the ability to “bump up” to the next interest rate anytime once during the term of your CD and add an additional deposit of $100 or more — also allowed just once.
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.
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.
Here are some of the most important advantages and disadvantages.
| Pros | Cons |
|---|---|
| You can withdraw funds without incurring an interest penalty | Limits to how much or how often you can withdraw funds |
| May pay higher interest rates than savings accounts | Generally pay lower interest rates than traditional CDs |
| Interest rates are guaranteed for the entire term | Terms tend to be shorter than many traditional CDs |
No-penalty CDs are one of several timed deposit accounts offered by financial institutions.
| Financial institution | Term | APY | Minimum opening deposit |
|---|---|---|---|
| Sallie Mae Bank via SaveBetter | 14 months | 4.40% on all balances | $1 |
| Sallie Mae Bank via SaveBetter | 10 months | 4.25% on all balances | $1 |
| CIT Bank | 11 months | 4.15% on all balances | $1,000 |
| Patriot Bank via SaveBetter | 17 months | 2.70% on all balances | $1 |
| USALLIANCE FInancial | 11 months | 4.00% on all balances | $500 |
| Rising Bank | 15 months | 2.50% on balances of $1,000 to $1 million | $1,000 |
| Bellco Credit Union | 36 months | 3.15% on all balances | $2,500 |
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.
Alex Cook
