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Best No Penalty CD Rates


Written by James Ellis | Updated on 9/9/2019

Certificates of deposit (CDs) work because everybody involved gets what they want. Depositors get a safe banking product with a guaranteed interest rate, while banks can count on funds remaining on deposit for a fixed term. The stability offered by CDs make these accounts highly reliable vehicles for growing savings that don’t need to be used for emergency spending.

Some banks offer special certificates that sweeten the deal even more for depositors: No-penalty CDs, which allow customers to withdraw funds from the account early without having to pay the usual financial penalty. Conventional CDs revoke several months worth of interest if you withdraw funds before the term of the CD is up; no-penalty CDs don’t have this drawback.

As you might imagine, these accounts are limited and tend to offer lower interest rates than similar CDs with traditional early-withdrawal penalties. But these atypical certificates can provide peace of mind for depositors who need flexibility to pursue changing APYs.

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All rates are current as of 9/9/2019

How we found the best no-penalty CD rates offered nationwide

The universe of no-penalty CDs offered by banks and credit unions isn’t huge. Still, there’s enough available to separate the wheat from the chaff when it comes to these products, and ensure that consumers can find the best no-penalty CDs available. We selected our picks based on the following criteria:

  • APY of at least 1.00%: While no-penalty CDs may not command interest rates as high as their traditional counterparts, there’s no reason you have to settle for subpar growth.
  • Nationwide availability: It’s possible better no-penalty CDs exist at a strictly local level, but we want to make sure the accounts you read about below are available for you to fund no matter where you live in the U.S.
  • No penalty of any kind for the early withdrawal of funds: Most importantly, none of the accounts listed below levy any sort of penalty on the customer for withdrawing funds before the CD matures.

The best no-penalty CD rates

Marcus by Goldman Sachs No-Penalty CD rates

Term APY Minimum balance needed to earn APY
7 months 2.25% $500
11 months 2.20% $500
13 months 2.15% $500

For depositors who are not ready to make a five-figure commitment to a CD, Marcus by Goldman Sachs offers a suite of no-penalty CDs that only require a $500 minimum deposit to fund. After you fund these certificates, you must wait at least seven days before withdrawing your money — Marcus by Goldman Sachs won’t allow you to touch your money before then.

Customers already familiar with Marcus by Goldman Sachs’ CDs should also note that unlike the high-yield CDs the institution offers, no-penalty CDs won’t permit you to add additional funds during a 30-day grace period after you open the account. Additionally, you can’t make any partial withdrawals on the no-penalty CD. You will, however, receive the interest for the month you choose to withdraw your money and close the account.

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My eBanc Flex Time Deposits

Term APY Minimum balance needed to earn APY
11 months 2.15% $10,000
11 months 2.25% $100,000

This online-only bank is a division of BAC Florida Bank, but anyone in the country can fund a Time Deposit (the bank’s name for CDs). The two no-penalty accounts offered by My eBanc both have an 11-month term, but those who deposit a higher balance — a minimum of $100,000 — enjoy a higher APY at 2.40%. A balance of at least $10,000 is all you need in order to open an account earning 2.15% APY.

These accounts truly earn their “flex” name by allowing you to make two partial withdrawals on your funds, a feature most no-penalty CDs lack. You can withdraw the entire amount in your account, but just keep in mind that it counts as one of the two withdrawals you’re allowed to make before incurring an early withdrawal penalty. Two caveats to the partial withdrawals are that you must give My eBanc seven days in advance before withdrawing the money, and you must still maintain the minimum balance for the account.

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Ally Bank No Penalty CD rates

Term APY Minimum balance needed to earn APY
11 months 1.70% up to $5,000
11 months 1.95% $5,000
11 months 2.10% $25,000

One of the mainstays of online banking, Ally offers customers interested in no penalty CDs a range of options with an 11-month term, all offering different rates depending on how much you put in to the CD. While the APY of the account’s highest interest tier falls short of the rates offered by some of the other no-penalty CDs reviewed here, the flexibility of minimum deposit amounts to open the account — coupled with Ally’s strong non-CD products — may attract customers already banking with Ally who are interested in a no-penalty CD.

Ally’s no-penalty CD doesn’t allow partial withdraws, and you’ll have to wait six days from funding the account before closing it. Ally will adjust the rate of your CD if the bank changes the rate favorable (for you) within 10 days of opening it.

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Investors eAccess No-Penalty CD

Term APY Minimum balance needed to earn APY
6 months 2.05% $500

While this New Jersey-based bank only offers one CD term with a no-penalty option, the account earns a decent APY and requires only a $500 minimum, making it an excellent choice for savers looking for a short-term commitment.

Savers should note that with this no-penalty CD you can only make a complete early withdrawal, not a partial withdrawal. You'll also receive your withdrawn funds via a check mailed First Class by the bank, which may also give you pause if you want to have your money in hand in a hurry.

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CIT Bank No-Penalty CD

Term APY Minimum balance needed to earn APY
11 months 2.05% $1,000

Based in Pasadena, Calif., CIT Bank offers customers nationwide an 11-month, no-penalty CD earning 2.05% APY, provided they have the $1,000 minimum needed to open the account.

Similar to other no-penalty CDs, the one offered by CIT Bank doesn’t allow for partial withdrawals. All in all, it’s a solid choice for customers shopping for a standard, no-penalty CD.

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PurePoint Financial No-Penalty CD rates

Term APY Minimum balance needed to earn APY
11 months 1.65% $10,000
13 months 2.00% $10,000
14 months 1.75% $10,000

Backed by Union Bank, this online-only institution offers the best rates for no-penalty CDs, with the crown jewel being its 13 month, 2.00% APY certificate. You’ll need to fund this account, like all of PurePoint’s No-Penalty CDs, with a minimum deposit of $10,000, and you can’t make any additional deposits before the CD matures. You need to wait seven days after funding the account before you can withdraw the money without penalty (a common restriction with no-penalty CDs). This no-penalty CD also doesn’t allow any partial withdrawals — you have to withdraw all the money, and once you do PurePoint closes the account.

PurePoint also offers a commitment to offer depositors the most competitive rate possible, promising that if the bank’s rate changes to something more favorable within 10 days of your funding, they will lock in the CD APY at the new, better rate rather than the lower one you funded it at.

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Chartway Credit Union No Penalty Share Certificate

Term APY Minimum balance needed to earn APY
12 months 1.50% $500

Being a credit union, Virginia-based Chartway requires you to become a member before you can take advantage of any of its services. Several paths to membership exist, but the easiest one for anyone in the nation to take involves donating $10 to the credit union’s We Promise Foundation.

The single no-penalty Share Certificate — a name for CD used by some credit unions — offered by Chartway has a term of 12 months and requires a minimum deposit of $500. It’s a solid choice for people already banking with Chartway, but unless you’ve been blacklisted by the other banks for whatever reason, it’s difficult to recommend this product over other institutions offering shorter-term no-penalty CDs earning more interest.

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Why you need a no-penalty CD

With a no-penalty CD, you gain in flexibility and liquidity, though you do lose some of the interest offered by conventional CDs of a similar term. However, that doesn’t mean this special type of CD is useless.

The risk for placing your money in a no-penalty CD is low, as you can withdraw your money at virtually any time if rates suddenly rise and you want to place your funds in a higher-earning CD (or in another type of financial product entirely).

As with regular CDs, it’s smart to put your money in an account paying the highest interest rate in order to maximize your earnings and make your money work for you.

Comments
Jean
Jean   |     |   Comment #1
Thank you for the update James Ellis. Very timely, exactly what I was looking for. Maybe Ken could put a link to all the no-penalty CDs in the drop-down box at the top of the page. Thanks again.
acharaniya
acharaniya   |     |   Comment #2
all the no-penalty cd rates went down in the last few days. myebanc rate just dropped today.
Ricochet
Ricochet   |     |   Comment #3
No Penalty CDs
Updated 9.9.19

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