The 10 best no-penalty CD rates available right now (2024)

These no-penalty CDs also have high rates, some topping 5%, which is closely in line with traditional CDs that would charge a withdrawal penalty if you removed funds too early.

The 10 best no-penalty CD rates of August 2024

Not every bank offers a no-penalty CD, but those that do will have different terms and conditions for the deal. Some might allow you to withdraw funds during certain periods, while others only allow one withdrawal during the CD term. It’s important to read the CD terms to ensure the no-penalty CD you’re looking into offers the right flexibility for you.

The CD rates, terms, and deposit requirements are current as of July 25, 2024, and are subject to change.

1. Climate First Bank: Up to 5.34% APY

Climate First Bank offers personal and commercial banking products with a core focus on environmental sustainability and equality.

The bank offers specialty loans for financing green projects, such as solar rooftops, retrofitting buildings for renewable energy, electric vehicle (EV) charging, or purchasing certified carbon offsets. It also has two different checking accounts, one of which the bank will donate a certain amount of funds to a nonprofit addressing the climate crisis and another supporting the LGBTQ+ community.

Climate First’s general banking products and services include high-rate CDs with yields up to 5.34% on a six-month CD.

Why we picked it

Climate First Bank offers competitively high-yield CDs with rates reaching up to 5.34% APY, starting with a minimum balance of $500. Its CDs do not have an early withdrawal penalty as long as you don’t withdraw the funds within the first six days of opening the account.

What to consider before opening

While Climate First Bank offers impressive rates on its CDs—starting at 4.50% on a 25-month CD—the number of penalty-free CDs are limited to four terms: 6, 12, 15, and 25 months. Other banks might have more terms.

2. Mission Valley Bank: Up to 5.18% APY

Mission Valley Bank primarily caters to consumers who are also business owners. Most of its loan and deposit products work in tandem with business accounts, although there are personal bank accounts. Mission Valley also offers a no-penalty CD with a high APY of 5.18% for a three-month term through the savings platform Raisin.

Why we picked it

Mission Valley Bank has a very low-cost three-month CD with a 5.18% APY, which is among the highest market rates. It only costs $1 to open the account.

What to consider before opening

Mission Valley Bank’s no-penalty CD allows for withdrawal after 30 days of opening the account. However, a full withdrawal can only happen once during the three-month term.

3. Freedom Bank: Up to 4.90% APY

Freedom Bank is a full-service bank in New Jersey with products spanning from personal and commercial loans to credit cards, savings, CDs, and money market accounts (MMAs). The bank offers many different deposit options, including the flexibility to withdraw funds without a penalty fee on its 9- and 12-month CDs.

Why we picked it

Freedom Bank’s no-withdrawal penalty CDs stand among the highest rates in the market and for longer terms than what some competitors offer. You can make a withdrawal 30 days after opening. Its 9-month, no-penalty CD has an APY of 4.90%, while the 12-month option has a 4.60% APY.

What to consider before opening

While there is some flexibility in removing funds in the CD before the term ends, you can only withdraw all of the funds one time during this period.

4. Marcus by Goldman Sachs: Up to 4.70% APY

Marcus by Goldman Sachs is an online bank that offers credit cards, high-yield savings accounts, and several different types of CDs, including no-penalty CDs and rates that can build up later in the CD term.

Its savings and CDs are low cost, with a minimum deposit of $500 to earn the top 4.70% APY on a CD. Terms are flexible, ranging from seven months to 13 months.

Why we picked it

While some banks offer higher rates on no-penalty CDs with a maximum term of three or five months, Marcus by Goldman Sachs has similar high-yield CDs that extend for longer, from seven to 13 months. The account must be funded for at least seven days before a withdrawal can be made.

What to consider before opening

Marcus only allows one withdrawal before the CD term ends and it must be the full balance amount, not a partial amount. After the full amount is withdrawn, the account will be closed.

5. America First Credit Union: Up to 4.90% APY

America First Credit Union provides banking services primarily to those who live or work in eligible areas of the Western United States. It has a full suite of banking products for deposits, loans, credit cards, business accounts, and more. America First also has many different types of low-cost savings and CDs with competitive rates and flexible options, including up to 4.90% on its no-penalty CD.

Why we picked it

America First’s no-penalty CD, called a Flexible Certificate, offers a 4.90% APY for 12 months and allows one withdrawal per quarter without incurring a penalty fee. Deposit amounts cannot exceed $100,000 on these CD accounts.

What to consider before opening

There are limitations to America First’s Flexible Certificate. You can only withdraw funds during the first five calendar days of each quarter. The CD can only be opened by phone with the credit union, in a branch, or through a virtual chat in its online banking.

6. SkyOne FCU: Up to 4.75% APY

SkyOne Federal Credit Union primarily serves those who work in the air transportation industry, including anyone related to or referred to by those members, and residents of the surrounding area to its main branch in California. The credit union offers many types of loans, low-cost savings accounts, and high-rate CDs, including the option to have little to no-penalty CDs when it comes to withdrawals. Its no-penalty CD is available to savers nationwide through Raisin.

Why we picked it

SkyOne FCU has a fairly high rate for a one-year CD at a 4.75% APY with no withdrawal penalty through Raisin. Depositors can make a withdrawal without incurring a penalty 30 days after opening the account. There’s also a very low balance requirement to open an account of $1.

What to consider before opening

SkyOne FCU only allows one withdrawal of the full amount of funds one time during the CD term. There are some financial institutions that offer more flexible fee-free or partial withdrawals during the life of the CD at high-yield rates.

7. Farmers Insurance FCU: Up to 5% APY

Farmers Insurance Federal Credit Union (FCU) was started in 1936 to provide financial services for Farmers Insurance Group employees and retirees. Its membership has since expanded, as have its offerings, which range from consumer and business loans to many different types of interest-earning deposit accounts.

Farmers Insurance FCU offers competitively high-rate CDs, topping 5%, with flexible options to adjust your rate and avoid withdrawal penalties.

Why we picked it

Farmers Insurance FCU has a no-penalty CD with a yield of 5%, among the highest of its top competitors. The CD term is nine months, which gives depositors the chance to earn more interest for longer. After the first 30 days of funding the CD, you can also withdraw funds once per calendar month.

What to consider before opening

The no-penalty CD at Farmers Insurance FCU is a bit limited in that the CD must be funded by new money entering the credit union and not transferred from an existing account there.

8. USALLIANCE FCU: Up to 4.80% APY

USAlliance Federal Credit Union (FCU) started in 1966 by a group of IBM employees and has since turned into a non-profit credit union offering a wide range of banking services to more than 150,000 members. Its banking products include credit cards, personal loans, mortgages, checking accounts, high-yield savings accounts, and CDs with flexible features, including a no-withdrawal penalty CD.

Why we picked it

USAlliance Federal Credit Union has one CD that offers no penalty on a withdrawal at a yield in line with most competitors. The 11-month term also provides the chance to earn high interest for nearly a year if you choose to keep all of the funds in that account.

What to consider before opening

There are limitations to using the withdrawal option on this CD. You cannot withdraw money during the first seven days of funding the CD. You must take out the full amount of funds if you withdraw before the term ends. The no-penalty CD is unavailable for IRAs or HSAs.

9. Technology Credit Union: Up to 4.50% APY

Technology Credit Union (Tech CU) started as a financial institution for the tech industry based in the San Francisco Bay area and has grown nationwide. It offers members a full suite of banking products, such as loans, deposit accounts, and wealth management services.

The APYs on its CDs are competitive, with rates up to 4.50% and some flexibility on withdrawing the funds before the term ends without incurring a penalty.

Why we picked it

Tech CU offers three “Liquid Certificates” that allow a depositor to withdraw funds once per month without incurring a penalty. You can withdraw any amount above the required $1,000 balance that has to stay in the account. Funds can only be withdrawn once per calendar month, and more than six days apart regardless of when the next month falls.

What to consider before opening

Tech CU has flexible CD products but to earn the most from the high APY, it’s best to keep as much as possible in the account for the full length of the term. The Liquid Certificates are only five months or less to begin with, so it might not be worth the no-penalty feature if you plan to withdraw the funds soon.

10. Bank of America: Up to 4.50% APY

Bank of America is one of the largest banking institutions in the U.S., with over 69 million customers and 3,800 retail centers. It offers a robust range of products for individuals and businesses of every size.

Why we picked it

With Bank of America’s flexible CD, you can guarantee access to your money for the entire year. With no annual fees or transfer fees, this no-frills account could be a decent option for someone looking to make a large purchase in a year or so while still maintaining liquidity in case of emergency.

What to consider before opening

The only withdrawal fee you may incur would be if you need your money within six days of opening the account. In this case, a penalty of seven days interest will be imposed.

Upon maturity, the product will auto-renew into a 9-month flexible CD, but at a different rate—so it’s worth setting a reminder and shopping around for the best rate once your year-long term rate is up.

What to know about no-penalty CDs

Unlike traditional CDs, which lock your money away for a set term, no-penalty CDs allow you to withdraw your funds before the term ends without facing a fee. This can be appealing to those who want the higher interest rates of a CD but aren’t comfortable with committing their money for an extended period.

With no-penalty CDs, you can withdraw your full balance, including the interest earned, at any point after a certain initial period, usually seven days. However, some banks might have different windows, such as requiring you to have the CD funded for 30 days or only allowing one withdrawal per month or once during the CD term. Some also require you to remove the entire balance when you choose a withdrawal, which means you lose the potential to earn any more interest.

Every financial institution will have different terms for withdrawing funds from a no-penalty CD, so it’s crucial to fully understand the terms beforehand to make sure it’s the type of flexibility you want.

Why choose a no-penalty CD vs. a traditional CD?

One key advantage to a no-penalty CD over a traditional CD is the ability to access your funds without incurring an early withdrawal penalty. Traditional CDs often charge hefty fees if you need to access your money before the term ends, which can be a significant drawback if unexpected expenses arise.

No-penalty CDs provide a middle ground by offering higher interest rates than regular savings accounts while still allowing you some liquidity. This can be ideal for individuals who want to earn higher returns than the typical interest on a savings account but are wary of locking their money away for an extended period.

Pros and cons of no-penalty CDs

How to choose a no-penalty CD

Selecting the right no-penalty CD requires a bit of research and consideration. Here are some steps to consider:

1. Determine your term length: Decide how long you are comfortable leaving your money in a CD. Terms can vary from a few months to several years.
2. Compare interest rates: Look for competitively high interest rates that offer a good return on your investment. Keep in mind that the longer you hold funds for the term of the CD, the more interest you can earn.
3. Check for fees: Read the footnotes and terms to ensure that there are no hidden fees associated with opening or maintaining the CD.
4. Verify deposit insurance: Make sure the CD is through a bank that’s insured by the Federal Deposit Insurance Corp. (FDIC) or the National Credit Union Administration (NCUA) if it’s a credit union. This way, your deposits are insured for up to $250,000 per account.
5. Review withdrawal policies and terms: Understand the terms for withdrawing your funds early to make sure that if you do so, it’s within the allowable windows when there is no penalty.

Alternatives to no-penalty CDs

If you find that a no-penalty CD doesn’t meet your needs, consider exploring these alternatives:

• High-yield savings accounts: Many savings accounts offer competitive interest rates and the flexibility to withdraw funds as needed.
• Money market accounts (MMAs): MMAs are similar to a savings account in that you are not locked into a CD term—but rates will be lower than a CD.
• Traditional CDs: If you’re comfortable committing your funds for some time, even six months, traditional CDs usually offer higher interest rates.

Our methodology

Fortune Recommends reviewed over 15 banks currently offering no-penalty CDs to find the top rates you can get today. We ranked APY, minimum opening deposit, and the total number of terms offered by each bank to determine the winners.

• APY (60%): The most important factor when opening a CD is the APY, so that was the leading factor when deciding who to feature.
• Minimum opening deposit (30%): Banks with no minimum were rated best on our list, while high opening deposits (some we researched were up to $5,000) were scored less favorably.
• Amount of terms available (10%): Many institutions only offer one no-penalty CD, so those that provide more than one got a bonus in our ranking.

Frequently asked questions