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7 Best No-Penalty CD Rates: Earn Up to 2.00% APY

If you can afford to lock up some money for a few months or longer, these CDs offer the best value.

Advertiser Disclosure: Most products in our articles are from partners who may provide us with compensation. However, opinions expressed here are author's alone, not those of any bank, credit card issuer, airline or hotel chain.

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 July 2022.

Noteworthy No-Penalty CD Offers

CIT Bank No-Penalty CD Account
Interest rate: 2.00% 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.
Open CD
Rising Bank No Penalty CD Account
Interest rate: 1.75% APY
Maturity: 15 months
Compounding period: Quarterly
Minimum opening deposit: $1,000
Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.
Open CD
Bellco Credit Union Smart Move CD Account
Interest rate: Up to 1.65% APY
Maturity: 18 to 36 months
Compounding period: Daily
Minimum opening deposit: $2,500
Withdrawal limitations: You may make one partial withdrawal during your term but must keep at least $1,000 in the account until maturity.
Open CD
Synchrony Bank No-Penalty CD Account
Interest rate: 1.50% 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.
Open CD
Citibank No Penalty CD Account
Interest rate: 1.50% 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.
Open CD
Ally Bank No Penalty CD
Interest rate: 1.25% 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.
Open CD
Marcus by Goldman Sachs No-Penalty CD
Interest rate: Up to 1.25% 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.
Open CD

CIT Bank No-Penalty CD

Offer Details

Secure application on issuer’s website.

CIT Bank No Penalty CD
APY: Up to 2.00% APY
Minimum Opening Deposit: $1,000
Features:
No early-withdrawal fee
Daily compounding interest
No account opening or maintenance fees
FDIC insured

CIT Bank offers one of the most competitive CDs with no early withdrawal penalty on the market. Account holders can earn a 2.00% 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: 2.00% 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.

Rising Bank No Penalty CD

Secure application on issuer’s website.


APY: 1.75% APY
Maturity: 15 months
Minimum Opening Deposit: $1,000
Features:
Strong APY
Quarterly compounding interest

Rising Bank’s CD rates are competitive, but there are a couple of caveats to consider. For starters, you need to keep your money locked up for 15 months to achieve the full CD term length, and interest is compounded and credited to your account quarterly instead of daily or monthly, so if you need to take an early withdrawal, you may miss out on earned interest unless you wait for the next quarter.

Like CIT Bank, Rising Bank’s No Penalty CD also has a high minimum opening deposit, it doesn’t allow you to take partial withdrawals, and you have to wait for the six-day grace period to end before you can access your funds penalty-free.

In addition to its CDs, Rising Bank also offers checking and savings accounts, auto refinancing, home loans, insurance and small business loans (SBA loans).

  • Interest rate: 1.75% APY
  • Maturity: 15 months
  • Compounding period: Quarterly
  • Minimum opening deposit: $1,000
  • Withdrawal limitations: You may withdraw the whole balance, including interest earned, beginning seven days after funding the account.

Bellco Credit Union Smart Move CD

Secure application on issuer’s website.


APY: Up to 1.65% APY
Maturity: 18 to 36 months
Minimum Opening Deposit: $2,500
Features:
Partial withdrawal
Option to add funds to account once
Higher balances earn increased APY

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

CD TermADY
18 Months1.15%
24 Months1.40%
30 Months1.40%
36 Months1.65%

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 1.65% 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

Secure application on issuer’s website.


APY: 1.50% APY
Maturity: 11 months
Minimum Opening Deposit: $0
Features:
No minimum opening deposit
No penalty for early withdrawals once account has been funded for 7 days

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 1.50% 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.

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

  • Interest rate: 1.50% 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.

Citibank No Penalty CD

Secure application on issuer’s website.


APY: 1.50% APY
Maturity: 12 months
Minimum Opening Deposit:
$500
Features:
Low minimum opening deposit
Access to Citibank suite of banking products

One of three CD account options, Citibank’s No Penalty CD, from our partner Citi, is a short-term option with a 12-month maturity and a 1.50% 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, Citibank 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: 1.50% 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

Secure application on issuer’s website.


APY: 1.25% APY
Maturity: 11 months
Minimum Opening Deposit: $0
Features:
Ally Ten Day Best Rate Guarantee
No minimum opening deposit
Bonus reward for CD renewal

Ally Bank doesn’t offer the most competitive rates, but its rate guarantee could 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: 1.25% 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

Secure application on issuer’s website.


APY: Up to 1.25% APY
Maturity: 7 to 13 months
Minimum Opening Deposit: $500
Features:
Relatively short CD term options
Relatively low opening deposit

Marcus is the retail arm of Goldman Sachs, an investment bank. Its CD rates are the lowest on our list, but it’s also the only one to offer a shorter term than 11 months:

CD TermAPY
7 Months0.45%
11 Months0.35%
13 Months1.25%

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 1.25% 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. 

Frequently Asked Questions

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.

READ NEXT: A Complete Guide to Investing in CDs

How Do CDs Work?

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.

How Much Interest Do You Get in a Certificate of Deposit?

The interest you earn depends on a few different 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.

What’s the Catch to No-Penalty CDs?

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.

What Is a CD Ladder?

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.

Are CD Funds FDIC-Insured?

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. 

Are CD Rates Fixed or Variable?

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.

While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Ben Luthi
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.

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