The best no-penalty CD rates for October 2024 (up to 4.40% APY)

The APYs listed in this article are accurate as of the time of publication. They may change as the Fed rate fluctuates. CNBC Select will update as new information becomes available.

A CD that does not penalize early withdrawal is called a no-penalty CD, which offers a competitive savings rate without tying up funds.

CDs are a popular savings option due to their above-average fixed interest rates for a specific period. However, if you withdraw your funds before the CD term ends, you may incur a penalty fee. No-penalty CDs provide a solution by allowing one penalty-free early withdrawal.

We compared over a dozen banks and credit unions offering no-penalty CDs to determine the best options. Our top picks offer competitive APYs, attainable minimum deposit requirements, and are all FDIC-insured. (See our methodology for more information on how we chose the best no-penalty CD accounts.)

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Best from an online-only bank

Best from a big bank

Best for no minimum deposit requirement

Best for a large deposit

Best for a shorter-term

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Marcus by Goldman Sachs

Goldman Sachs' online-only subsidiary, Marcus, provides three no-penalty CDs with terms of seven, 11, and 13 months, all at a 4.40% APY and with a minimum deposit of $500.

CD terms offered

The available penalty-free terms are 7, 11, and 13 months, with options ranging from 6 months to 2 years or 5 years.

Monthly fee

None

Early withdrawal penalty fee

No-penalty CDs have no early withdrawal penalty, but for other CDs, if you withdraw the entire principal amount before maturity, you'll be charged an early withdrawal penalty based on the term of your CD and the principal. The penalty days and interest rate used to calculate the penalty vary depending on the CD's term. For high-yield CDs and rate bump CDs, the penalty days are 90, 180, or 270 days, and the interest rate is divided by 365 (or 366) to calculate the penalty.

Bank of America

Nearly 4,000 physical branches and about 15,000 ATMs make it easy for customers to access Bank of America, the nation's second-largest bank, which offers a one-year no-penalty CD at 3.75% APY with a $1,000 minimum deposit.

CD terms offered

Fixed term CD accounts offer terms ranging from 1 month to 120 months, with only a 12-month term available without penalty.

Monthly fee

None

Early withdrawal penalty fee

An early withdrawal penalty applies to any withdrawal requested outside of the grace period for all CDs except for flexible CDs, where the penalty is waived for withdrawals requested within the first 6 days of the account term or the first 6 days following any partial withdrawal. If your account has not earned enough interest to cover the penalty, any interest is deducted first and the remainder of the penalty is taken from your principal.

Ally Bank

If you're looking for a no-penalty CD with no minimum deposit, Ally Bank is the best option. Their 11-month CD offers a competitive rate of 4.00% APY, making it a great choice for those who want to save without being penalized for early withdrawals.

CD terms offered

An 11-month term is the only option available without penalty.

Monthly fee

None

Early withdrawal penalty fee

Withdrawing money from a no penalty CD is allowed after six days of account funding, and the interest earned will not be penalized. However, for all other CDs, an early withdrawal penalty will apply.

M.Y. Safra Bank

If you have a large deposit, M.Y. Safra Bank's no-penalty CD is a good choice as it offers a 13-month term at 4.25% APY and a $5,000 minimum deposit requirement, which is the highest minimum ask we found for no-penalty CDs.

CD terms offered

A 13-month term is the only option available without penalty.

Monthly fee

None

Early withdrawal penalty fee

No-penalty CDs allow for up to two penalty-free withdrawals, with the third request resulting in account closure. Withdrawing the principal amount of a no-penalty CD is not permitted within the first 6 days of account funding or within 6 days of the most recent partial withdrawal. Any withdrawal that reduces the balance below the minimum balance of $5,000 will result in account closure. For all other CDs, a penalty will be imposed for early withdrawal of the principal.

Climate First Bank

Climate First Bank provides a high APY of 3.67% for a six-month no-penalty CD, allowing you to earn the most while maintaining the flexibility to withdraw without fees. Additionally, Climate First Bank offers a one-year no-penalty CD with an APY of 2.91%. Both CDs require a minimum deposit of $500. Climate First Bank is a digital bank that prioritizes environmental sustainability.

CD terms offered

Only 6 and 12-month penalty-free terms are available.

Monthly fee

None

Early withdrawal penalty fee

Penalty-free CDs are penalty-free, except for the regulatory required penalty if withdrawn within the first 6 days of opening. For a 15-month flex CD, the account holder may make one withdrawal of up to one-half of the initial principal balance without penalty; this applies only after the first 7 days of making a deposit. Subsequent withdrawals will incur penalties.

What's a no-penalty CD?

A no-penalty CD is similar to a standard CD in that it provides a fixed interest rate for a set period, but it does not have the same early withdrawal restrictions.

A no-penalty CD allows you to withdraw your funds early without paying a fee, unlike standard CDs that typically charge an early withdrawal penalty fee of at least a few months of interest. This means that with a no-penalty CD, you can access your funds immediately without having to wait for your CD to mature.

How no-penalty CDs work

No-penalty CDs are similar in their functionality, typically lasting around one year. After one week from the date of funding, you can withdraw your funds at any time without penalty fees. However, most no-penalty CDs require a one-time withdrawal of the entire CD balance if you make an early withdrawal; partial early withdrawals are usually not permitted.

CDs without monthly fees and federal insurance make them a safe savings option.

How to choose a no-penalty CD

Choosing a no-penalty CD with a one-year term limit is crucial when considering the APY offered. These CDs are ideal for short-term savings goals, such as a vacation.

How to compare no-penalty CDs

No-penalty CDs are not widely available among banks. When searching for them, look for terms such as "penalty-free CD" or "liquid CD." Credit unions also offer no-penalty CDs, which you should compare based on interest rates and minimum deposit requirements.

Why trust CNBC Select?

Our mission at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions when it comes to managing their finances. Each CD review we publish is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of savings and banking products. At CNBC Select, we maintain the highest journalistic standards and ethics, and we earn a commission from affiliate partners on many offers and links. However, our content creation process is entirely independent of our commercial team and any external third parties. To learn more about our methodology for selecting the best no-penalty CDs, please refer to our website.

Our methodology

CNBC Select compared over a dozen banks and credit unions offering no-penalty CDs, considering only those with no-penalty CD terms of at least six months, with most offering no-penalty CD terms around one year.

We prioritized no-penalty CDs with the highest APYs when ranking the top ones. We then compared them based on their minimum deposit requirements, ease of use, and industry rankings. Additionally, we considered CNBC Select audience data, such as demographics and engagement with our content and tools, when available.

All CDs on this list are FDIC-insured up to $250,000 per person. However, banks may change their CD rates and fee structures without notice, and these changes can fluctuate based on the Fed rate. When you open a CD account, you are typically locked into the APY offered at account opening for the entire term length. If you find a higher CD rate with a no-penalty CD, you can withdraw your funds and opt into a different CD.

The amount of money you earn from a CD depends on several factors, including the term length, the initial deposit, the annual percentage rate (APY) offered when you opened the account, and any associated fees. Typically, a larger deposit and a higher interest rate will result in higher earnings. If you withdraw money from the CD before the maturity date, you may be subject to penalty fees that reduce your principal balance and earnings. However, with a no-penalty CD, you can make a one-time early withdrawal at no cost.

Most banks and institutions mandate a deposit of new funds when opening a CD account for the first time, preventing the transfer of existing funds from an account at that bank.

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