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College Students and Recent Grads

Top Checking Accounts for College Grads

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

For many college students, their default banking option while in school is a student checking account, which is typically free. Unfortunately, when you graduate you lose those benefits. Many student checking accounts will begin to charge you monthly maintenance fees unless you meet certain requirements.

So, where do you go from there?

Few young adults would turn to their parents for fashion or dating advice and, yet, one of the most common ways we’ve found young people choose their bank account is by going with whichever bank their parents already use. This could be a bigger faux pas than stealing your dad’s old pair of parachute pants.

The bank your parents use may carry fees or have requirements that don’t meet your lifestyle or budget, and make accounts expensive to use.

But where do you even begin to choose the right checking account?

When you’re nearing graduation, start planning your bank transition.

Many banks send a letter in the mail a few months prior to your expected graduation date informing you that your student checking account is going transition to a non-student account. If you’re not careful and you disregard the letter, you may be transitioned into an account that charges a fee if you don’t meet certain requirements.

You can always call the bank and ask to switch to a different account or you can choose a new account that offers more benefits, like interest and ATM fee refunds.

Account Name

Minimum Monthly Balance

Amount to Open

ATM Fee Refunds

APY

Simple$0$0None1.00%
Axos Bank Rewards Checking$0$50Unlimited domestic Up to 1.25% APY if requirements are met
Discover Bank$0$0NoneNone, but 1% cash back on up to $3,000 debit card purchases per month
Ally Bank$0$0Up to $10 per statement cycle 0.10% to 0.50% APY depending on balance
La Capitol Federal Credit Union Choice Plus Checking$0(if less than $1,000, there is a $8 fee)$50Up to $25 per month4.25% APY on balances up to $3,000 2.00% APY on balances $3,000-$10,000 and 0.10% on balances over $10,000
Consumers Credit Union (IL) Free Rewards Checking$0$5Unlimited ATM reimbursements4.09% on balances up to $10,000,
0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000
T-Mobile Money$0$0None4.00% APY on balances up to $3,000, 1.00% APY after that
Evansville Teachers Federal Credit Union Vertical Checking$0$0Up to $15 in ATM reimbursements per month 3.30% APY on balances up to $20,000

The 5 key things you should look for in a checking account

When you’re shopping around for a new checking account, there are several things you should look for to ensure you’re getting the most value from your account:

  1. A $0 monthly fee: Sometimes banks may say they don’t charge a monthly fee but read the fine print — they may require a minimum monthly balance in order to avoid it. There are plenty of free checking accounts available for you to open, so there’s no reason to stay stuck with an account that charges a monthly fee. Take note, as some accounts may require you to meet certain criteria to maintain a free account like using a debit card, enrolling in eStatements or maintaining a minimum daily balance.
  2. No minimum daily balance: Accounts without minimum daily balances mean you can have a $0 balance at any given time. This may allow you to have a free account without meeting balance requirements — although other terms may apply to maintain a free account.
  3. Annual Percentage Yield: APY is the total amount of interest you will earn on balances in your account. Opening an account that earns you interest on your balance is an easy way to be rewarded for money that would typically sit without earning anything. You should definitely aim to earn a decent APY on your savings account.
  4. ATM fee refunds: You may not be able to access an in-network ATM at all times, so accounts providing ATM fee refunds can reimburse you for ATM fees you may incur while using out-of-network ATMs. Those $3 or $5 charges add up!
  5. No or low overdraft fees: Most banks charge you an overdraft fee of around $35 if you spend more money than you have available in your account. Therefore, it’s a good idea to choose an account that has no or low overdraft fees.

Top overall checking accounts for college grads

For the top overall checking accounts, we chose accounts that have no monthly service fees, no ATM fees, refunds for ATM fees from other banks, interest earned on your deposited balances and with strong mobile banking apps. While there is no all-inclusive account that contains every benefit, the accounts below are sure to provide value whether you want a high interest rate, unlimited ATM fee refunds or 24/7 live customer support.

1. Simple

Cash management app Simple acts as a hybrid checking and savings account with a generous APY and no fees. It features unlimited transfers between your checking account and Protected Goals account, as well as a decent APY of 1.00% on balances in your Protected Goals account. Simple also provides fee-free access to 40,000 ATMs – although it doesn’t rebate ATM fees you might incur from machines outside its vast network. With built-in budgeting tools integrated into its app, Simple is a strong contender for the best checking account for college grads.

SEE DETAILS Secured

on Simple’s secure website

2. Axos Bank Rewards Checking

The Axos Bank Rewards Checking account is a great option for college grads, as it offers low fees and generous rewards. There are no monthly service fees, no overdraft fees and unlimited reimbursements for domestic ATM fees. Currently, you also can earn an APY up to 1.25% if you meet the following requirements:

  • Receive monthly direct deposits totaling $1,000 or more
  • Use your Axos debit card at least 15 times per month

SEE DETAILS Secured

on Axos Bank’s secure website

Member FDIC

3. Discover Cashback Debit

Cracking our list for the best checking accounts for college graduates is Discover Bank, which takes a unique approach to checking account rewards. Instead of offering an APY on deposit balances, Discover opts for cash back as an incentive to get consumers to sign up for its checking product. The Discover Cashback Debit account offers up to 1% cash back on $3,000 of debit card transactions per month. That coupled with its zero fees and free access to 60,000 ATMs nationwide make it one of the best checking accounts for college graduates.

SEE DETAILS

Discover Bank's website is secure

4. Ally Bank

Online bank Ally Bank offers a solid checking account with minimal fees, decent APYs and other attractive perks. Its Interest Checking account charges no monthly maintenance fees and provides free access to Allpoint ATMs nationwide, as well as a $10 reimbursement per statement cycle for any other ATMs fees incurred. Ally Bank’s APY isn’t too shabby, either: You can earn an APY of 0.50% with a $15,000 minimum balance. Other cool features include its Ally Skill for Amazon Alexa, which enables you to transfer money with just your voice.

Top high-yield checking accounts for college grads

Since most checking accounts offer little to no interest, high-yield checking accounts are a great way for you to maximize the money that typically would just sit in your account without earning interest. These accounts often offer interest rates that fluctuate depending on how much money you have in the account. However, in order to earn interest, there are some requirements that you may have to meet such as making a certain number of debit card transactions and enrolling in eStatements.

1. La Capitol Federal Credit Union Choice Plus Checking

This checking account has a $2 monthly service fee, which can easily be waived if you enroll in eStatements.

While the terms state a minimum balance requirement of $1,000 and a low balance fee of $8, the fee can be waived if you make 15 or more posted non-ATM debit card transactions per month.

To earn the top interest rate on your checking balance, you just need to make at least 15 or more posted non-ATM debit card transactions per month. There are numerous surcharge-free La Capitol ATMs for you to use, and after signing up for eStatements you can receive up to $25 per month in ATM fee refunds when you use out-of-network ATMs.

SEE DETAILS Secured

on La Capitol Federal Credit Union’s secure website

NCUA Insured

2. Consumers Credit Union (IL) Free Rewards Checking

The Consumers Credit Union (IL) Free Rewards Checking account is just that: Rewarding. It offers a tier-based APY, which includes a 4.09% APY on balances up to $10,000, 0.20% APY on balances between $10,000 and $25,000 and 0.10% APY on balances over $25,000. In order to earn the highest APY, you must complete at least 6 signature-based debit purchases totaling $100 or more, receive at least one direct deposit, ACH debit, or pay one bill through their free bill payment system totaling $500 or more, log into your online banking account and be signed up for eStatements and spend $1,000 or more with a Consumers Credit Union Visa credit card each month. This account has no fees and offers unlimited ATM reimbursements if requirements are met.

SEE DETAILS Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

3. T-Mobile Money

Wireless carrier T-Mobile has forayed into finance with a checking account, T-Mobile Money. The account offers a generous APY of 4.00% on balances up to $3,000, with balances over that threshold earning 1.00% APY. In order to receive the higher APY, you must meet the following requirements: Be enrolled in a qualifying T-Mobile wireless plan, be registered for perks with your T-Mobile ID and have deposited at least $200 in qualifying deposits to your checking account within that current calendar month. T-Mobile Money does not reimburse for out-of-network ATM fees, but it does not charge any maintenance fees.

SEE DETAILS Secured

on T-Mobile Money’s secure website

Member FDIC

4. Evansville Teachers Federal Credit Union Vertical Checking

Evansville Teachers Federal Credit Union’s Vertical Checking account doles out a generous APY of 3.30% on balances up to $20,000 if you meet the following requirements per month:

  • Make at least 15 debit card purchases
  • Make at least one direct deposit
  • Make at least one online or mobile banking login
  • Receive electronic statements

This account boasts a low, minimum opening deposit of just $25 and no monthly service fee, as well as up to $15 in ATM fee reimbursements per month.

SEE DETAILS Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

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Earning Interest

The Best High Yield Checking Accounts in 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

Checking accounts are like a pair of khakis slacks: You should have at least one, but shopping for them is a chore. You know you need a checking account—preferably one without fees—but most people think it’s not going to yield more than a token amount in interest.

These high yield checking accounts break this tired paradigm, featuring sky-high interest rates that can put even the best savings accounts to shame. In this article, we’ll help you make an informed decision about whether one of these high yield checking accounts are right for you and your financial goals.

How we picked the best high yield checking accounts

We followed a strict approach when selecting these accounts. We used the online rate finder for FDIC- or NCUA-insured rewards checking accounts on DepositAccounts.com, another LendingTree.com-owned site, to list the top 10 high yield checking accounts with the highest rates, assuming a deposit amount of $100.

Credit unions were only included if they allow membership to anyone (such as by making a donation to their chosen charity). Finally, we filtered out any high yield checking accounts that are not available nationwide, or that carry a health rating of below a B.

The Best High Yield Checking Accounts in 2020

La Capitol Federal Credit Union — Choice Checking

  • Minimum amount to open: $50
  • Requirements to earn the high APY: Make at least 20 debit purchases per month.
  • Monthly service fee: $8; waived if you either have a balance of at least $1,000 or make 20 non-ATM debit card transactions each month and use eStatements.
  • ATM fees: None
  • ATM refunds: Up to $25 in out-of-network surcharges (the money the ATM’s owner charges you) per month if you are signed up for eStatements

SEE DETAILS Secured

on La Capitol Federal Credit Union’s secure website

NCUA Insured

Consumers Credit Union (IL) — Free Rewards Checking

  • Minimum amount to open: $5
  • Requirements to earn the high APY: You must complete the following requirements each month: 1) complete at least 12 signature-based debit purchases, 2) receive at least one direct deposit, ACH debit, or pay one bill through their free bill payment system totaling $500 or more, 3) be signed up for eStatements and 4) spend $1,000 or more with a Consumers Credit Union Visa credit card each month.
  • Monthly service fee: No monthly service fee.
  • ATM fees: If you meet the requirements to earn the high APY, you won’t pay any ATM fees.
  • ATM refunds: You are eligible for refunds on all ATM fees as long as you meet the requirements to earn the highest APY.

SEE DETAILS Secured

on Consumers Credit Union (IL)’s secure website

NCUA Insured

T-Mobile — T-Mobile Money Checking Account

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must 1) be enrolled in a qualifying T-Mobile wireless plan, 2) be registered for perks with your T-Mobile ID and 3) have a minimum of $200 in qualifying deposits.
  • Monthly service fee: None
  • ATM fees: None
  • ATM refunds: None

SEE DETAILS Secured

on T-Mobile Money’s secure website

Member FDIC

Evansville Teachers Federal Credit Union — Vertical Checking

  • Minimum amount to open: $25
  • Requirements to earn the high APY: You must complete the following items each month: 1) have at least one direct deposit into your account, 2) be enrolled in e-statements, 3) use your debit card to make at least 15 purchases per month, and 4) log on mobile or online banking once.
  • Monthly service fee: None
  • ATM fees: None
  • ATM refunds: Up to $15 of out-of-network ATM fees per month.

SEE DETAILS Secured

on Evansville Teachers Federal Credit Union’s secure website

NCUA Insured

Western Vista Federal Credit Union — Panorama Checking

  • Minimum amount to open: $0
  • Requirements to earn the highest APY: You must complete the following items each month: 1) have at least one direct deposit into your account, 2) be enrolled in e-statements and 3) have at least 10 debit card purchases of $5 or more posted in each statement cycle.
  • Monthly service fee: None
  • ATM fees: None
  • ATM refunds: Up to $25 of out-of-network ATM fees per month, with a maximum of $5 per transaction.

SEE DETAILS Secured

on Western Vista Federal Credit Union’s secure website

Market USA Federal Credit Union — VIP Checking Platinum Tier

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must meet following requirements: 1) enroll in e-Statements, 2) make a monthly direct deposit of at least $250 3) make 12 visa debit card purchases per month that are a minimum of $5 each and 4) make three bill payments per month, of at least $20 each, using Market USA’s Bill Pay service.
  • Monthly service fee: None
  • ATM fees: Access to 30,000 surcharge-free CO-OP Network ATMs nationwide
  • ATM refunds: Eight free monthly transactions at STAR and PLUS ATMS, minimum direct deposit of $500 required and ATM surcharges may still apply

SEE DETAILS Secured

on Market USA Federal Credit Union’s secure website

NCUA Insured

Lake Michigan Credit Union — Max Checking Account

  • Minimum amount to open: None
  • Requirements to earn the highest APY: 1) Have monthly direct deposits 2) Enroll in eStatements 3) Use your debit card at least 10 times per month for purchases and 4) Log into home banking a minimum of 4 times per month. A $5 membership fee is also required
  • Monthly service fee: None
  • ATM fees: None
  • ATM refunds: Up to $10 per month for non-LCMU and non-Allpoint ATMs

SEE DETAILS Secured

on Lake Michigan Credit Union’s secure website

NCUA Insured

Garden Savings Credit Union — Platinum Rate Rewards Checking Account

  • Minimum amount to open: None
  • Requirements to earn the highest APY: You must: 1) make 12 point-of-sale transactions per month, 2) make one ACH payment or have one direct deposit per month and 3) enroll in eStatements.
  • Monthly service fee: None
  • ATM fees: None at Garden Savings, Allpoint and CO-OP ATMs
  • ATM refunds: Up to $20 per month if all qualifiers are met

SEE DETAILS Secured

on Garden Savings Federal Credit Union’s secure website

MECU Credit Union — Reward Checking Account

  • Minimum amount to open: None
  • Requirements to earn the highest APY: You must: 1) make 12 debit card purchases per month, 2) make one ACH payment or bill pay or have one direct deposit per month and 3) enroll in eStatements.
  • Monthly service fee: None
  • ATM fees: None
  • ATM refunds: Up to $20 per month if all qualifiers are met

SEE DETAILS Secured

on MECU’s secure website

NCUA Insured

America’s Credit Union — Affinity Basic Checking

  • Minimum amount to open: $5
  • Requirements to earn the highest APY: You must complete the following items each month: 1) have $15,000 in combined loans or deposits, 2) have direct deposits of at least $500 into your account, 3) receive statements electronically and 4) have at least 10 debit card point-of-sale transactions post and settle per month.
  • Monthly service fee: None
  • ATM fees: None if you use a surcharge-free ATM in their network
  • ATM refunds: None

SEE DETAILS Secured

on America's Credit Union’s secure website

NCUA Insured

How are these banks able to offer such a high APY?

Did you notice that most of the institutions offering high yield checking accounts tend to be smaller names that you’ve probably never heard of? It turns out there’s a good reason for that, and it all has to do with the Dodd-Frank Act, a set of sweeping financial regulations passed by Congress in the wake of the Great Recession.

Back when the Dodd-Frank Act was passed in 2010, a tiny legislative nugget called the Durbin Amendment was included in the text. This amendment limited the swipe fees that big banks can charge merchants for each purchase that one of their customers makes using a debit card.

Suddenly, big banks (defined as institutions with at least $10 billion in assets) could only charge half as much per swipe as they had been doing, and swipe fees became a lot more lucrative for smaller banks and credit unions instead.

That’s why so many smaller institutions have strict rules requiring you to use your debit card each month. According to the Federal Reserve, in 2016 smaller banks earned anywhere from 18 to 65 cents for each debit card swipe, compared to a maximum of just 22 cents plus 0.05% of the purchase price for larger banks.

Say, for example, a smaller bank requires you to make 10 debit transactions per month, and earns 65 cents from each transaction. Your bank would then earn $6.50 from your spending that month.

That is where the high interest rates come from. It’s also why the high interest rates are generally capped to smaller balances, so that you don’t earn too much money and negate all the swipe fees that the bank earns.

Is it worth meeting requirements to go after the high APY?

Some of these high yield checking accounts have a lot of requirements.

If you prefer to use debit cards, chances are you’ll be able to easily meet the minimum debit swiping requirements for most of these accounts. On the other hand, if you’re a cash or credit card junkie, you may find yourself frequently worrying at the end of the month about whether or not you’ve met the minimum debit swiping requirements. In this case, a high yield checking account might not be right for you.

Another thing to consider is that many of these banks require you to make a signature-based debit transaction, rather than a PIN-based debit transaction for it to count. Unfortunately, this is slightly less secure than using the PIN-based payment method.

You’ll also need to avoid making a rush of charges at the end of the month to meet the spending requirements. That’s because banks and credit unions will usually only count a charge that has finished posting to your account towards meeting the monthly swiping requirement. It can take a few days for debit swipes to post to your account, so it’s better to get these charges in early to make sure they post to your account in time to count.

The good news is that checking accounts aren’t designed to hold significant amounts of cash. That’s what a savings account is for, and you can still earn pretty good interest rates with a high yield savings account (although still nowhere close to these high yield checking accounts).

If you’re going to keep a smaller deposit in your checking account anyways, why not earn as much as you can from it—especially if you know you’ll have an easy time meeting the requirements?

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Advertiser Disclosure

Best of

The Best No-Penalty CD Rates in July 2020

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Written By

Reviewed By

CDs, or certificates of deposit, work under an easy-to-understand premise: You agree to place your money with a bank or credit union for a set amount of time, during which it will earn interest. At the end of the period, you get your money back plus a nice chunk of interest earnings. But if you withdraw money from your CD before the term expires — or before the CD “matures,” in financial parlance — the institution will charge you a penalty fee for breaking the terms of your agreement.

Generally depositors understand that they can’t touch their funds while they’re in the CD account. But the accounts below are special CDs that let customers withdraw money from a CD account with no penalty charge at whatever time they want. No-penalty CDs aren’t generally widespread, but we’ve selected the best of these accounts available nationwide, based on the following criteria:

  • No penalties for early withdrawal of funds
  • Available across the nation

The best no-penalty CD rates in July 2020

1. Marcus by Goldman Sachs®

TermAPYMinimum balance to earn the APY
7-month1.00%
$500
11-month0.90%
$500
13-month0.80%
$500

Marcus by Goldman Sachs stakes a strong claim to offering the best no-penalty CDs around, requiring a mere $500 deposit for customers to start earning solid APYs beginning at 0.80%. Interested customers should be aware, however, that like other no-penalty CDs on this list, the accounts offered by this bank lock in your money for seven days after you deposit. You can’t open a 7-month no-penalty CD on Monday and take out your money on Wednesday (if you needed to for whatever reason).

In addition, these accounts don’t allow any partial withdrawals of the principal. If you deposited $1,000 in an account and want to withdraw money before that CD matures, you won’t be hit with any penalties — but you have to take out all $1,000 and your account will then be closed.

SEE DETAILS Secured

on Marcus By Goldman Sachs’s secure website

Member FDIC

2. CFG Bank

TermAPYMinimum balance needed for APY
13 months0.90%
$500

Headquartered in Baltimore, CFG Bank offers an array of financial products to consumers nationwide, both online and through its handful of branches across Maryland. It is the 12th-largest bank in Maryland, with over $1 million in assets.

The crown jewel of CFG Bank’s CD line-up is its 13-month CD, which you can open either online or at a branch. This CD is the bank’s only certificate of deposit that allows for a one-time, penalty-free withdrawal. There is a $500 minimum deposit for this product, which is also the amount that is required to earn its competitive APY of 0.90%. CFG Bank does not allow for additional deposits after the initial deposit, and all accounts face a seven days’ interest penalty if you make a withdrawal within six days of opening.

SEE DETAILS Secured

on CFG Bank’s secure website

FDIC Insured

3. Ally Bank

TermAPYMinimum balance to earn the APY
11 months0.95%None

Online-only bank Ally offers a single no-penalty CD account with an 11-month term because it has no minimum balance requirement, this account will attract consumers without a lot of money to spare who still want a no-penalty CD.

Similar to all of the other products listed, this Ally no-penalty CD account makes you wait for the seventh day after the initial deposit to withdraw your funds, and the bank doesn’t allow for partial withdrawals. The bank also offers what it calls its 10 Day Best Rate Guarantee, promising that if depositors fund this CD within 10 days of opening it, Ally will make sure the account earns the highest rate available should the bank change its rate within that 10 day period. It’s by no means a game-changer, but a nice bonus to avoid feeling left out if you deposit a pile of money in your CD on Thursday, only to discover on Friday that Ally hiked its rates.

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

4. My eBanc Flex Time Deposit

TermAPYMinimum balance to earn the APY
11 months0.75%$10,000
11 months0.90%$100,000

This Florida-based online savings bank may go by a somewhat generic name, but it’s a division of BAC Florida Bank, a financial institution with more than 45 years of history. The no-penalty CD offered here is called the Flex Time Deposit, and if customers who deposit at least $100,000 can earn an APY of 0.90%, which ranks at the top of the accounts on this list. Depositing at least $10,000 will earn you a decent APY of 0.75%.

Where this account truly shines is that it allows for two partial withdrawals of your funds without having to close your CD account entirely (as long as the balance still remains at $10,000 or more). All of the other no-penalty CD accounts on this list require you to withdrawal all of the principal and any interest earned.

SEE DETAILS Secured

on My eBanc’s secure website

Member FDIC

5. CIT Bank

TermAPYMinimum balance to earn the APY
11-month 0.75%$1,000

If you have the $1,000 minimum deposit for this no-penalty CD account, CIT Bank will give you a rate of 0.75% APY on an 11-month term. While that’s not as much as you can earn with a comparable CD term with some of the options above, the deal offered by CIT could provide a decent alternative.

6. Citizens Access Liquid CD

TermAPY Minimum balance to earn the APY
11 months0.75%$5,000

Another no-penalty CD hails from online-only bank Citizens Access. This bank is backed by Citizens Bank N.A., which has roots dating back 190 years and has over $150 billion in assets.

Citizens Access calls its no-penalty CD a Liquid CD, but it functions in the same way as the other products on this list. It only offers one Liquid CD, which has an 11-month term and a current APY of 0.75%. There is a $5,000 minimum deposit required for this CD, and it features no penalty for a one-time withdrawal of its entire balance as soon as seven days after funding.

SEE DETAILS Secured

on Citizens Access’s secure website

Member FDIC

7. PurePoint Financial

TermAPYMinimum balance to earn the APY
11-month0.50%$10,000
13-month0.45%$10,000
14-month0.40%$10,000

The online arm of Union Bank offers a great APY among the no-penalty CD accounts reviewed, which makes it a no-brainer — assuming you have the $10,000 needed for the minimum deposit. PurePoint’s sweet spot is the 11-month term no-penalty CD account, which offers an APY of 0.50%.

This no-penalty CD accounts come with the usual caveats — you can’t make any partial withdrawal of funds, and you have to wait seven days after your initial deposit before withdrawing. However, if you have the sizable chunk of change needed to open one of these accounts, you’ll earn some of the highest APY for your money.

SEE DETAILS Secured

on PurePoint Financial’s secure website

Member FDIC

8. Colorado Federal Savings Bank

TermAPY Minimum balance to earn the APY
11 months0.70%$5,000

Branchless bank Colorado Federal Savings Bank offers an array of financial products, including a number of certificates of deposit ranging from a 1-month to a 60-month. Among its CD offerings is a no-penalty CD that is worth highlighting.

The Colorado Federal Savings Bank features an 11 month no-penalty CD with an APY of 0.70%. This CD requires a minimum deposit of $5,000, with no maximum deposit limit. As a no-penalty CD, you’re able to withdraw the CD’s full balance – including interest and principal – with no penalty, seven days after you begin funding the account.

SEE DETAILS Secured

on Colorado Federal Savings Bank’s secure website

Member FDIC

9. Investors eAccess

TermAPYMinimum balance to earn the APY
6-month0.40%$500

Another no-penalty CD requiring a minimal balance is the 6-month CD offered by Investors eAccess. This New Jersey bank provides one of the most competitive products when it comes to short-term CDs in the no-penalty category, but it does come with a few caveats.

First of all, there are no partial withdrawals allowed by this CD. If you need to take money out, you have to liquify the entire account. You’ll also receive your funds via paper check sent first class mail, so don’t expect an instantaneous turnover of funds should you want to make an early withdrawal. That said, the APY and low minimum account balance make this an excellent choice for short-term savings.

SEE DETAILS Secured

on Investors EAccess’s secure website

Member FDIC

10. Chartway Credit Union

TermAPYMinimum balance to earn the APY
12-month share certificate0.15%
$500

This credit union may be based in Virginia Beach, Va., but you can potentially become a member, so long as they meet one of the following conditions:

  • You reside or go to school or a place of worship in one of the areas served by a local branch of the credit union. Currently, Chartway Credit Union operates branches in the states of Florida, Texas, Utah and Virginia.
  • You have a family member who’s already a Chartway member
  • You or someone in your immediate family works at a company that utilizes Chartway’s financial services for its employees
  • You make a $10 donation to the We Promise Foundation, a charity founded by the credit union.

Once you’re a member, you can open a 12-month share certificate. Doing so requires a minimum deposit of $500, on which you’ll earn an APY of 0.15%. As with all the other no-penalty CD accounts listed, you can’t make a partial withdrawal of your funds — it’s all or nothing.

SEE DETAILS Secured

on Chartway Federal Credit Union’s secure website

NCUA Insured

What to watch out for with no-penalty CDs

Although no-penalty CDs, like any certificate of deposit, carries with it minimal risk of losing your principal, it’s important you thoroughly understand the terms of the account and understand what circumstances you can withdraw funds. Otherwise, your supposedly no-penalty CD will start devouring your funds with fees.

One of the biggest differences between no-penalty CDs lies with whether you can make partial withdrawals or if you have to withdraw the entire amount. If the account allows for partial withdrawals, make sure you understand if the bank or credit union considers a full withdrawal (and closure of the account) count toward your withdrawal limit. It’s easy to imagine a scenario where you skim the fine print, read a CD allows for two partial withdrawals, make those two withdrawals, then get hit with a penalty when you later try to close the account early because the bank considers that a “third” partial withdrawal.

Another concern you should have when shopping for no-penalty CDs is whether or not the bank or credit union will continue to offer it. AgFed Credit Union, for example, occasionally offers competitive no-penalty share certificates but they’re only available for funding for a limited time. If you snooze on some of these no-penalty CDs, don’t be surprised if they have vanished by the time you are ready to pull the trigger and fund one.

Learn more: Is a no-penalty CD worth it?

According to Ken Tumin, our in-house savings expert and founder of LendingTree-owned DepositAccounts.com, no-penalty CDs aren’t a bad option since there isn’t really much risk to trying one out. Just aim to find the longest term no-penalty CD deal you can since the rates will generally be higher.

“When the bank has your money for longer, they’ll usually offer a higher interest rate — and that interest will have more time to compound,” Tumin says. “So if you open a no-penalty CD, you should go for the one with the longest term possible. The rates will likely still be higher, and after all, if you decide to take the money out early, it’s no problem.”

Also, look for no-penalty CDs that offer the benefit on full withdrawals. Some banks only allow penalty-free partial withdrawals, Tumin warns.

Building a CD ladder to avoid withdrawal fees

If you’re interested in using CDs while still maintaining access to your funds, there’s another approach you could consider: building a CD ladder.

It’s can be a complicated strategy, but in short, you split your deposit up into smaller chunks and open several CDs with various term lengths. When the CDs reach maturity, you can renew the account and lengthen the term or withdraw the money if you need to. This way, you can take advantage of higher interest rates while still avoiding early withdrawal fees.

For a step-by-step guide to building a CD ladder, check out our guide linked above. And for even more savings strategies and tactics, keep your eye on the blog. We’re always reviewing the latest financial products and accounts to help you find the best solutions for your money.

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