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Stashing your money in a savings account can net you a decent return, especially if it’s a high-yield savings account. But if you don’t need access to the money anytime soon, some banks and credit unions may offer higher interest rates on their certificates of deposit (CDs).

Traditional CDs are higher-yielding accounts that come with a catch: to take advantage of the higher, low-risk annual percentage yield (APY), you can’t take money from the account until it reaches maturity, which can take anywhere from three months to five years in most cases.

If you take a withdrawal before the account matures, you’ll be subject to an early withdrawal penalty, which can amount to several months’ worth of interest. Fortunately, no-penalty CDs are on the rise, allowing account holders to take that withdrawal, albeit with some limitations, without a fee.

Here are some of the best no-penalty CD rates from both brick-and-mortar and online banks. Note that these rates are all current as of February 2023.

Noteworthy No-Penalty CD Offers

Interest Rate Maturity Compounding Period Mininum Opening Deposit Withdrawal Limitations

CIT Bank No-Penalty CD Account

4.10% APY

11 months

Daily

$1,000

You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Citi® No Penalty CD Account

4.05% APY

12 months

Daily

$500

You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Ally Bank No Penalty CD

3.85% APY

11 months

Daily

$0

You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Marcus by Goldman Sachs No-Penalty CD

Up to 3.85% APY

7 to 13 months

Daily

$500

You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Bellco Credit Union Smart Move CD Account

Up to 3.40% APY

18 to 36 months

Daily

$2,500

You may make one partial withdrawal during your term but must keep at least $1,000 in the account until maturity.

Synchrony Bank No-Penalty CD Account

3.50% APY

11 months

Daily

$0

You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

CIT Bank No-Penalty CD

CIT Bank offers one of the most competitive CDs with no early withdrawal penalty on the market. Account holders can earn a 4.10% annual percentage yield by locking up their money for just 11 months. The bank’s $1,000 minimum deposit is a bit steep, and there’s no way to make an early withdrawal of just a portion of your balance. You also have to wait at least six days after funding your account before you can touch the money.

But if you don’t anticipate needing some of your money over the next 11 months, you’ll be hard-pressed to find better CD rates with no early withdrawal penalty.

CIT Bank also offers a checking account, a handful of savings products and mortgage loans.

  • Interest rate: 4.10% APY
  • Maturity: 11 months
  • Compounding period: Daily
  • Minimum opening deposit: $1,000
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

CIT Bank No-Penalty Certificate of Deposit

Open CD

Member FDIC.

  • Our Rating 4.5/5 Read the review
  • Minimum
    Deposit Required
    $1,000
  • 11-Month APY4.10% More Info

    Annual Percentage Yield is accurate as of January 6, 2023. Interest rates for CIT Bank’s No-Penalty CD are variable and subject to change at any time without notice.

If you’re looking for a low-risk way to earn extra interest on your savings in the short-term, CIT Bank’s No-Penalty CD may be just the ticket. It’s 11-month term is on the short side for CDs, and you’ll earn an impressive 4.10% APY on your deposit. See site for details.

Overview

The CIT Bank No-Penalty CD offers a 4.10% APY, which may be ideal for people who want both flexibility and a higher interest rate.

Pros

  • Strong APY for a no-penalty CD
  • No opening or maintenance fees

Cons

  • Relatively high minimum opening balance

Bellco Credit Union Smart Move CD

Bellco Credit Union offers a no-penalty CD with four term lengths, each with an increasing annual percentage yield:

CD Term APY

18 months

2.40%

24 months

3.40%

30 months

3.40%

36 months

3.15%

Even the shortest maturity is longer than no-penalty CD rates from other financial institutions on our list. What’s more, Bellco’s $2,500 minimum deposit is steep. 

That said, the credit union is the only one on our list that allows a partial withdrawal, though you have to leave at least $1,000 in the account until the CD’s maturity date. You can also add $100 or more to your account once — most financial institutions don’t offer this add-on feature — and you can also bump up to the next rate once during your term.

It’s also important to note that Bellco has some membership requirements, which is common for credit unions. To join, you must:

  • Live or work in an eligible area in Colorado.
  • Have a family member who’s a member.
  • Work for or be affiliated with an eligible employer or association.
  • If you’re a Colorado resident, join the Consumers United Association ($5 per year or $25 for a lifetime membership).
  • If you’re not a Colorado resident, join the Bellco Foundation ($10 minimum donation).

While you have to jump through some extra hoops to join, and the longer-term CDs may not be as appealing, the other benefits the credit union provides could make it worth your while.

  • Interest rate: Up to 3.40% APY
  • Maturity: 18 to 36 months
  • Compounding period: Daily
  • Minimum opening deposit: $2,500
  • Withdrawal limitations: You may make one partial fee-free withdrawal during your CD term but must keep at least $1,000 in the account until maturity.

Synchrony Bank No Penalty CD

Synchrony Bank offers a variety of CDs and CD rates, though its no-penalty option may be best if you want some flexibility. You’ll earn 3.50% APY for locking up your cash for just 11 months, and you can take your whole balance with no early withdrawal penalty starting seven days after you fund the account.

What makes this option better than some of the others with high-yield CDs, though, is that there’s no minimum opening deposit, making it accessible to anyone, not just those with a lot of cash.

High Interest with Low Risk

Ready to Open a Synchrony Bank No-Penalty CD? Start here.

Open CD

at Synchrony

Synchrony Bank also offers other financial products and services, including online-only savings and money market accounts and credit cards.

  • Interest rate: 3.50% APY
  • Maturity: 11 months
  • Compounding period: Daily
  • Minimum opening deposit: $0
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Citi No Penalty CD

One of three CD account options, Citi’s No Penalty CD, from our partner Citi, is a short-term option with a 12-month maturity and a 4.05% APY. There is a $500 minimum opening deposit, but that’s relatively low compared to some of the other options on our list. Other options include a fixed-rate CD that can offer a higher annual percentage yield for the same term as the no-penalty option.

The only major international bank on our list, Citi offers a wide variety of financial products and services that you won’t get with a lot of online banks. That includes a suite of banking products, several top credit cards, home loans, personal loans and lines of credit, an investing platform and wealth management services.

  • Interest rate: 4.05% APY
  • Maturity: 12 months
  • Compounding period: Daily
  • Minimum opening deposit: $500
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Ally Bank No Penalty CD

Ally Bank offers decent rates, and its rate guarantee could also be a huge plus. If you fund an Ally Bank CD and the interest rate goes up within 10 days, you’ll get bumped up to the new rate for your CD type and maturity date. It’s also one of the few no-penalty CDs with no minimum opening deposit, and it has a short term of 11 months. Renew your CD at that time, and you’ll get a 0.05% loyalty reward.

If you need to access your funds, you can take a full withdrawal on the seventh day after opening your account.

In addition to no-penalty CDs, Ally also offers checking, savings and money market accounts, personal, auto and mortgage loans, and an investing platform.

  • Interest rate: 3.85% APY
  • Maturity: 11 months
  • Compounding period: Daily
  • Minimum opening deposit: $0
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Marcus by Goldman Sachs No-Penalty CD

Marcus is the retail arm of Goldman Sachs, an investment bank. Its CD rates aren’t the strongest on our list, but it’s also the only one to offer a shorter term than 11 months:

CD Term APY

7 months

0.45%

11 months

0.35%

13 months

3.85%

Unfortunately, you have to lock in for 13 months to get the maximum rate. There is a $500 minimum opening deposit, but that’s not as much as some other no-penalty CDs we’ve found. 

In addition to decent CD rates, Marcus by Goldman Sachs also offers high-yield savings accounts, personal loans, credit cards and investment accounts. 

  • Interest rate: Up to 3.85% APY
  • Maturity: 7 to 13 months
  • Compounding period: Daily
  • Minimum opening deposit: $500
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Which No-Penalty CD Should You Choose?

woman checking finances in cafe
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Before you look into CDs, check out other high-yield accounts, including savings accounts and money market accounts, to see if you can get a similar rate without locking up your money for several months.

If you can’t find another high-yield option you like, consider these features when determining which CD is the right fit for you:

  • CD rates
  • Maturity date
  • Opening deposit requirement
  • Compounding period
  • Full or partial withdrawals
  • Restrictions on when you can withdraw
  • Ability to renew
  • Rate guarantee

In addition to these banks and credit unions, you may also want to consider other CD providers, including CFG Bank, PurePoint, Quontic Bank and more. Keep in mind, though, that not all financial institutions that offer CDs have a no-penalty option.

If you’re the type of person who likes to keep all of their financial dealings under one roof, you may also want to check to see what other financial products and services the financial institution offers. 

No-Penalty CD FAQ

While certificates of deposit have been around for a long time, they’re not as widely used as other banking products. Here are some common questions about CDs and how they work.

money and time Related Article

A Complete Guide to Certificate of Deposit Accounts

Read More
  • CDs are relatively risk-free deposit accounts (not investment accounts) that can offer a higher rate than some other savings accounts. In exchange for the higher rate, you’ll agree to hold your deposit in the account until it matures, which can take three months to five years in most cases.

    With most CDs, you’ll be penalized if you withdraw your money before the account matures, which can be several months’ worth of accrued interest. As a result, these accounts aren’t great for people who anticipate needing their money before the maturity date.

    No-penalty CDs can give you some additional flexibility, but they still have some restrictions on withdrawals, which can make them less appealing than other savings accounts with competitive rates.

  • The interest you earn depends on a few factors, including the annual percentage yield, the term of the CD and how often the bank or credit union compounds the interest.

    If you’re thinking about getting a CD, search for an online CD interest calculator to get an idea of how much money you can earn during the period.

  • No-penalty CDs offer you more flexibility than traditional CDs. But no-penalty CD rates tend to be lower than traditional CD rates. Additionally, you may be limited in how you can take the withdrawal to avoid the withdrawal penalty. For example, you may have to wait through a grace period first, or you may be required to withdraw the full amount rather than part of your balance. Make sure you read the fine print before you open an account.

  • A CD ladder is a savings strategy that involves spreading money across multiple CDs instead of putting all of it into one. That way, you can take advantage of higher yields with long-term CDs without needing to lock up all of your money for a longer period of time.

  • If you have a CD with a bank that’s a member of the Federal Deposit Insurance Corporation, then your funds are FDIC Insured. This means that if the bank fails, your funds are insured for up to $250,000 per depositor, per insured bank, per account ownership category. 

    CDs offered by federal and state-chartered credit unions are not covered by the FDIC, but they receive the same insurance coverage through the National Credit Union Administration. 

  • There are both fixed- and variable-rate CDs available. With a fixed option, your rate stays the same until the CD matures. With a variable rate, it can fluctuate over time.

BL

Ben Luthi

Ben Luthi is a personal finance and travel writer and credit card expert. He has a degree in finance from Brigham Young University and worked in financial planning, banking and auto finance before writing full-time for NerdWallet and Student Loan Hero. Ben is now a full-time freelance writer and enjoys traveling and spending time with his two kids. His work has appeared in several publications, including U.S. News & World Report, USA Today, Money, Success and Slickdeals.