Most CDs have one characteristic that consumers don’t like: penalties for early withdrawals. No-penalty CDs, however, are an exception. These certificates of deposit may provide a higher fixed yield than you could earn with a savings account and without having to pay a penalty should you need to withdraw your money early.

What is a no-penalty CD?

A no-penalty CD usually doesn’t have a penalty if you withdraw the funds before the term ends. Early withdrawal isn’t permitted within the first week of funding or opening a no-penalty CD, but after that a penalty-free withdrawal is possible.

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 APY.

Bankrate’s picks for the top no-penalty CD rates

Note: Annual percentage yields (APYs) shown are as of Feb. 1, 2023. Bankrate’s editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products.

A closer look at the top no-penalty CD rates

America First Credit Union: 4.35% APY, $500 minimum deposit

America First Credit Union is among the 10 largest credit unions in the U.S.

America First offers a 12-month Flexible Certificate account that is a bit different from a traditional no-penalty CD. It allows one penalty-free withdrawal during the first five calendar days of each quarter.

Term APY Minimum balance to earn APY
1 year 4.35% $500

CIT Bank: 4.10% APY, $1,000 minimum deposit

CIT Bank, an online bank, became a subsidiary of First Citizens Bank following the completion of a merger in January 2022. In addition to the 11-month no-penalty CD, CIT Bank offers eight terms of regular CDs and four terms of jumbo CDs.

CIT Bank also offers savings and money market accounts.

Term APY Minimum balance to earn APY
11 months 4.10% $1,000

Citibank: 4.05% APY, $500 minimum deposit

Citibank is one of the largest banks in the U.S. It offers fixed-rate CDs, a step-up CD and a no-penalty CD.

Citi also offers Citi Accelerate Savings, a savings account with a competitive yield. But it isn’t available in all U.S. markets.

Term APY Minimum balance to earn APY
1 year 4.05% $500

Ally Bank: 3.85% APY, $0 minimum deposit

Ally is an online bank formerly known as GMAC Bank. Ally offers an 11-month no-penalty CD with no minimum opening deposit.

Ally also offers a Raise Your Rate CD in terms of two years and four years as well as standard CDs in different terms.

Term APY Minimum balance to earn APY
11 months 3.85% $0

Marcus by Goldman Sachs: 0.35% to 3.85% APY, $500 minimum deposit

Marcus is the consumer banking unit of Goldman Sachs Bank USA. It offers three terms of no-penalty CDs — seven, 11 and 13 months — along with a variety of standard CDs terms and a savings account.

Term APY Minimum balance to earn APY
7 months 0.45% $500
11 months 0.35% $500
13 months 3.85% $500

Synchrony Bank: 3.50% APY, $0 minimum deposit

Synchrony Bank’s 11-month no-penalty CD is a new addition to its lineup of 14 terms of traditional CDs and its two-year bump-up CD. The bank also offers savings and money market accounts. The savings account earns a competitive APY and has no minimum balance requirement.

Term APY Minimum balance to earn APY
11 months 3.50% $0

No-penalty CD FAQs

  • Certificates of deposit are safe if they are held 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 and NCUA accounts are backed by the full faith and credit of the U.S. government.
  • Peace of mind: You generally don’t have to worry about incurring early withdrawal penalties with no-penalty CDs. Usually, withdrawing during the first week is the only time you’ll face a fee.Possible higher APY than a savings account: Some no-penalty CDs may carry a higher yield than a savings account.A fixed APY: Savings accounts usually have a variable APY, while CDs offer fixed rates for the duration of the term.Flexibility: Should yields rise, you are able to close a no-penalty CD and put your money into a higher rate savings account or CD.
  • 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.Potential need for partial withdrawals: You might not be able to make a partial withdrawal from a no-penalty CD. The bank may require you to take out the entire balance and close the CD, if you wish to withdraw money early.

Methodology for Bankrate’s Best CD Rates

At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.

Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.

To find the best CDs, our editorial team analyzes various factors, such as: annual percentage yield (APY), the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund.

When selecting the best CD for you, consider the purpose of the money and when you’ll need access to these funds to help you avoid early withdrawal penalties.

Banks we monitor

These financial institutions are featured in our CD rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank5 Connect, Bank of America, Bank of the West, Barclays, Bask Bank, BB&T, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Marcus by Goldman Sachs, Morgan Stanley Private Bank, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees’ Credit Union, Suncoast Credit Union, Suntrust Bank, Synchrony Bank, TD Bank, TIAA Bank, UFB Direct, Union Bank (California), U.S. Bank, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.