CDs usually have one characteristic that people don’t like: penalties.
However, no-penalty CDs are the exception to this. These CDs may give you a higher, fixed, yield than you could earn with a savings account, without having to pay a penalty.
Best no-penalty CD rates for April 2020
- Marcus by Goldman Sachs: up to 1.70% APY
- CIT Bank: 1.70% APY
- Ally Bank: 1.55% APY
- Citizens Access: 1.35% APY
- Investors eAccess: 1.15% APY
- PurePoint Financial: up to 1.01% APY
Compare: no-penalty CD rates by term
1. Marcus by Goldman Sachs – up to 1.70% APY, $500 minimum deposit
Marcus by Goldman Sachs offers three terms of no-penalty CDs: seven months,11 months and 13 months.
Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA. Marcus offers a variety of CDs, three no-penalty CD terms and a savings account.
Marcus by Goldman Sachs now has an app available on iOS and one coming to Google Play this spring, according to Marcus’ website.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 7 month | 1.70% | $500 |
| 11 month | 1.60% | $500 |
| 13 month | 1.50% | $500 |
2. CIT Bank – 1.70% APY, $1,000 minimum deposit
CIT Bank is CIT’s national direct bank. CIT Bank, N.A. is a subsidiary of CIT Group Inc. CIT Bank only offers one no-penalty CD, which has an 11-month term.
CIT Bank also offers eight terms of CDs and jumbo CDs.
In addition to its CDs, CIT Bank offers two savings accounts and a money market account. CIT Bank also launched its eChecking account in November 2019.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 11 month | 1.70% | $1,000 |
3. Ally Bank – up to 1.55% APY, $0-$25,000 minimum deposit for APY
Ally Bank is an online-only bank that has been around for a little more than 10 years. Ally Bank’s 11-month no penalty CD doesn’t have a minimum opening deposit amount. But the more money you open the CD with, the higher the APY, since it has three APY tiers.
The bank offers several different types of CDs. In addition to its no-penalty CD, Ally Bank has seven terms of standard CDs and a raise your rate CD. The raise your rate CD allows the interest rate to increase once with the two-year CD or twice with the four-year CD if the balance tier increases on your CD.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 11 month | 1.40% | Less than $5,000 |
| 11 month | 1.50% | $5,000 |
| 11 month | 1.55% | $25,000 |
4. Citizens Access – 1.35% APY, $5,000 minimum deposit
Citizens Access launched in July 2018. It made its debut with a savings account and CDs. And then in November 2019 it added an 11-month liquid CD and stopped offering the six and 18-month CDs.
The bank offers a competitive yield on its CDs and savings account. All of its products require a $5,000 minimum deposit.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 11 month | 1.35% | $5,000 |
5. Investors eAccess – 1.15% APY, $500 minimum deposit
Investors eAccess launched two CDs in 2019: a six-month no-penalty CD and a 10-month CD.
Investors eAccess also offers a money market account that has a competitive yield. Investors eAccess is a trade name of Investors Bank. Investors Bank has around 147 branches in New Jersey and New York.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 6 month | 1.15% | $500 |
6. PurePoint Financial – up to 1.01% APY, $10,000 minimum deposit
PurePoint Financial is a division of MUFG Union Bank, N.A.
It offers nine regular CD terms and three terms for its no-penalty CDs.
It also has a savings account that offers a competitive yield. But it also has a $10,000 minimum requirement to open the account, like all of PurePoint Financial’s products.
| Term | APY | Minimum balance to earn APY |
|---|---|---|
| 11 month | 1.01% | $10,000 |
| 13 month | 0.95% | $10,000 |
| 14 month | 0.90% | $10,000 |
No-penalty CD FAQs
What is a no-penalty CD?
A no-penalty CD is a CD that usually doesn’t have a penalty if you break the term early. Usually an early withdrawal isn’t allowed around the first week of funding or opening a no-penalty CD, but after that you can usually make a penalty-free withdrawal.
No-penalty CDs may be a good fit for people who aren’t sure when they’ll need access to their money, but still want to earn a possible higher annual percentage yield (APY).
Are CDs safe?
CDs are safe if they are either at a Federal Deposit Insurance Corp. (FDIC) bank or at a National Credit Union Administration (NCUA) credit union and within insurance guidelines and limits.
Both FDIC accounts and NCUA credit unions backed by the National Credit Union Share Insurance Fund (NCUSIF) are backed by the full faith and credit of the U.S. government.
Advantages of no-penalty CDs
- Peace of mind: You generally don’t have to worry about incurring early withdrawal penalties with no-penalty CDs. Usually, around the first week is the only time you’ll face a fee.
- Possible higher APY than a savings account: Generally, some no-penalty CDs may have a higher yield than a savings account.
- A fixed APY: Savings accounts usually have a variable APY, though some introductory rates are the exception to this.
- Flexibility: If yields were to skyrocket, in either savings accounts or CDs, you could close your no-penalty CD and put your money into one of these accounts.
Disadvantages of no-penalty CDs
- They might have lower APYs than other CDs: You may be sacrificing a higher APY with a no-penalty CD. CDs that have a penalty for early withdrawals tend to offer higher yields.
- Savings accounts may have higher APYs: Some savings accounts may have comparable or higher APYs than a no-penalty CD.
- They might not have long terms: No-penalty CDs tend to have short terms, usually between six months and 14 months. Terms may be longer or shorter than that range.
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