Best No-Penalty CD Rates in December 2024

Certificates of deposit (CDs) typically offer a trade-off. In exchange for tying your money up for a set period, you can secure an interest rate that’s often higher than what you would get with a savings account. If you make an early withdrawal, you pay a penalty.

No-penalty CDs offer the perks of a CD without the threat of fees if you make an early withdrawal. If you’re considering a no-penalty CD, take the time to compare your options and find the best deal. We’ve rounded up some of the best no-penalty CD rates to get you started.

Our recommendations

Best for online banking

CIT Bank CD No Penalty

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Best for online banking

CIT Bank CD No Penalty

APY*

3.50%

Min. deposit

1000

Term

11 months

Why we like it:

CIT Bank is a full-service online bank that offers an 11-month no-penalty CD with a 3.50% APY. Aside from the less competitive rate, the main drawback of the account is its $1,000 minimum deposit requirement, which is steep but still much lower than the $5,000 required by M.Y. Safra Bank. CIT’s CD might be a good fit if you already have an account with the bank or prefer an online bank with a range of banking products.

Best for highest rate

M.Y. Safra Bank No-Penalty CD

Best for highest rate

M.Y. Safra Bank No-Penalty CD

APY*

5.00%

Min. deposit

$5,000

Term

13 months

Why we like it:

M.Y. Safra offers a no-penalty CD with a 5.00% APY, the highest of the CDs on our list. The downside is that it requires a $5,000 minimum deposit. However, this CD is worth considering if you can meet that requirement. Beyond its high rate, it offers greater flexibility than other no-penalty CDs, allowing you to make a partial early withdrawal twice. Other no-penalty CDs require that you withdraw the full amount.

Best for eligible credit union members

USAlliance Federal Credit Union No-Penalty CD

Best for eligible credit union members

USAlliance Federal Credit Union No-Penalty CD

APY*

4.80%

Min. deposit

$500

Term

Why we like it:

Like all credit unions, USAlliance Federal Credit Union restricts its membership. However, you can qualify for membership by joining one of several nonprofits that the credit union works with. It may be worth it as this is one of the top no-penalty CDs on the market, with an attractive 4.80% APY.

Best for longer terms

Marcus by Goldman Sachs No-Penalty CD

Best for longer terms

Marcus by Goldman Sachs No-Penalty CD

APY*

4.70%

Min. deposit

$500

Term

13 months

Why we like it:

Marcus by Goldman Sachs offers an appealing no-penalty CD, pairing a competitive APY with a longer-than-typical term. Its CD matures in 13 months, so you can lock your interest rate for a longer than average period. With that said, there are two caveats to note. You can’t withdraw from the account until seven days after you’ve funded it, so your money will be inaccessible temporarily. The account also has a minimum deposit requirement of $500.

Best for mobile banking app

Marcus by Goldman Sachs No-Penalty CD

Best for mobile banking app

Marcus by Goldman Sachs No-Penalty CD

APY*

4.70%

Min. deposit

$500

Term

13 months

Why we like it:

Ally Bank is a full-service online bank offering checking accounts, savings accounts, and several types of loans. If you appreciate an excellent mobile banking app, are looking for a one-stop shop, or already bank with Ally, its no-penalty CD could appeal. Like most of Ally’s accounts, there are no minimum balance requirements or monthly fees. However, the CD’s 4.00% APY is lower than Ally’s high-yield savings rate of 4.20%, so it only makes sense to open the CD if you think rates will drop shortly.

Best no-penalty CD rates compared

Methodology

When comparing no-penalty CDs, we looked for a few specific traits:

• Competitive interest rate. This is the most important trait. Higher yields mean you earn more, so we looked for CDs that offered an attractive APY.
• Minimum deposit requirements. A good interest rate means nothing if you can’t open an account. Lower minimum deposit requirements make CDs more accessible, so we looked for accounts with low minimum deposits.
• Term options. The longer the term on a no-penalty CD, the better, because it allows you to secure your interest rate for a longer period.

How to select the best no-penalty CD

When deciding between no-penalty CDs, the key factors to look at are the APY, minimum deposit requirement, and term. Ensure you can meet any requirements to open the account, then look for the highest rate available.

You should also consider how easily you can access the account. If your bank offers a no-penalty CD, it might be worth opening the CD at your bank, even if its rate is a bit lower than the competition, just for the convenience of keeping all your money in one place.

If you’re willing to go elsewhere, however, your best bet is to choose the CD with the highest rate and a reasonable term length.

How to open a no-penalty CD account

Opening a no-penalty CD account works like opening any other bank account. You’ll need to go to the bank or visit its website and apply to open an account. During the process, you’ll provide information about yourself, such as your name, address, and Social Security number. Once you’ve opened your account, you’ll have to make your deposit. Most banks will let you link another bank account, such as your checking account, to transfer funds electronically.

Alternatives to no-penalty CD accounts

If you’re not sure a no-penalty CD is right for you, there are alternatives to consider.

High-yield savings accounts are one of the simplest alternatives. Like no-penalty CDs, they offer high interest rates and allow you to withdraw money when needed. However, your bank can change the interest rate on these accounts at any time.

You could also consider a traditional CD. These CDs have more term options, often letting you lock in a rate for as long as five years. They also usually offer higher interest rates. However, if you need to take money out of the account before the term ends, you’ll pay a penalty, so you should only commit money you know you won’t need.

No-penalty CDs: Pros and cons

TIME Stamp: Consider a no-penalty CD for specific, short-term goals

Unlike traditional CDs, no-penalty CDs save you from the risk of early withdrawal penalties. They also tend to have relatively short terms compared to regular CDs, usually about one year.

This makes them appealing to people who want to set money aside for a short-term goal while

retaining the flexibility to withdraw early. If you have a goal like that in mind, a no-penalty CD might be right for you.

Frequently asked questions (FAQs)

Who has the highest-paying CD right now?

Banks constantly change the rates they offer based on market conditions and the rates offered by competitors. To find the best rates available right now, check out our list of the best CD rates.

Where can I get 5% CDs?

Many banks offer CDs that pay as much as 5.00% APY. USAlliance Federal Credit Union offers 5.00% APY on its no-penalty CD. Other banks may offer similar rates on their traditional CDs.

Can you get 6% on a CD?

CD rates can vary significantly based on their terms and market rates. Currently, it is

difficult to find CDs paying 6.00% APY. But if rates rise once again, some banks may begin to offer CDs that pay 6.00% or more.