Top No Penalty CD Rates for July 2024
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Want a CD but without the commitment or early withdrawal penalties? Try No-Penalty CDs. See who has the top rates today.
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- Mission Valley Bank:
3-Month No-Penalty CD - 5.18% APY - Ponce Bank:
4-Month No Penalty CD - 5.17% APY - Technology Credit Union:
5-Month No Penalty CD - 5.15% APY - Blue Federal Credit Union:
9-Month No Penalty CD - 5.10% APY - Freedom Bank:
9-Month No-Penalty CD - 4.90% APY - Sallie Mae Bank:
14-Month No Penalty CD - 4.75% APY - SkyOne Federal Credit Union:
12-Month No-Penalty CD - 4.75% APY - Sallie Mae Bank:
10-Month No Penalty CD - 4.70% APY - Freedom Bank:
12-Month No-Penalty CD - 4.60% APY - GreenState Credit Union:
12-Month No Penalty CD - 4.60% APY
Have a chunk of money you want to keep safe? A no-penalty CD might be your perfect solution to lock in attractive returns, while maintaining the freedom to access your funds when you need them.
Check out the best no-penalty CD rates and see whether this is the right investment for you.
3-Month No-Penalty CD - 5.18% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
5-Month No Penalty CD - 5.15% APY
- $1 minimum deposit
- No fees
- Deposits federally insured up to at least $250,000 by NCUA
9-Month No Penalty CD - 5.10% APY
- No fees
- $1 minimum deposit
- 24/7 online access to funds
- Federally insured by NCUA
9-Month No-Penalty CD - 4.90% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
12-Month No-Penalty CD - 4.75% APY
- $1 minimum deposit
- 24/7 online access
- Federally insured by NCUA
12-Month No Penalty CD - 4.60% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- NCUA insured
6-Month No-Penalty CD - 3.00% APY
- No fees
- $1 minimum deposit
- 24/7 online access to funds
- FDIC insured
CIT Bank No Penalty CD - 3.50% APY
- 3.50% APY
- Option to withdraw full balance and interest after 7 days of CD funding date
- $1,000 minimum to open an account
- 11 months
- No monthly maintenance fee
- Member FDIC
What is a No-Penalty CD?
A no-penalty certificate of deposit (CD) works like a regular CD where you keep a fixed amount of money for a fixed term in exchange for a fixed rate. Except, for no-penalty CDs, you can take out your money before maturity without worrying about paying early withdrawal penalties.
This gives you the flexibility to pivot your money when and where you need it to be. But, they are quite rare, so not all banks or credit unions may offer this option.
Technically, yes you can withdraw your CD before maturity but there may be penalties. If you get a no-penalty CD, you can withdraw early without fees. If you're really not sure what's best, you can also consider more flexible options like high-yield savings accounts.
How Much Does a No-Penalty CD Pay?
If you had $50,000 in a no-penalty CD with 5% APY, you would earn $2,500 in one year. To earn the most interest, you want to get the highest APY available on a no-penalty CD.
Here's a table to illustrate how much you can earn on a no-penalty CD with different APY and deposit amounts, in one year.
| $10,000 | $25,000 | $50,000 | |
|---|---|---|---|
| 0.00% | $10,000 | $25,000 | $50,000 |
| 0.50% | $10,050 | $25,125 | $50,250 |
| 1.00% | $10,100 | $25,250 | $50,500 |
| 1.50% | $10,150 | $25,375 | $50,750 |
| 2.00% | $10,200 | $25,500 | $51,000 |
| 2.50% | $10,250 | $25,625 | $51,250 |
| 3.00% | $10,300 | $25,750 | $51,500 |
| 3.50% | $10,350 | $25,875 | $51,750 |
| 4.00% | $10,400 | $26,000 | $52,000 |
| 4.50% | $10,450 | $26,125 | $52,250 |
| 5.00% | $10,500 | $26,250 | $52,500 |
| 5.50% | $10,550 | $26,375 | $52,750 |
Should You Get a No-Penalty CD or a Regular CD?
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This depends on your financial goals and circumstances. The main question is: Do you need easy access to your money?
No-penalty CDs are suitable for those who might need access to their funds before the term ends. This could be for unexpected expenses, emergencies, and such.
It's also a good option if you want your funds to be on standby for better investment opportunities.
Regular CDs do not have this flexibility and will incur early withdrawal fees. But, you will have more rates and terms to choose from. And some might have better rates than no-penalty CDs in exchange for the commitment.
Here are some of the top CD rates by term:
| Term | Bank and Yield Rate |
|---|---|
| 3 Month | Quontic: |
| 6 Month | Generations Bank: |
| 1 Year | NexBank: |
| 18 Month | American First Credit Union: |
| 2 Year | American First Credit Union: |
| 3 Year | Quontic: |
| 4 Year | Alliant Credit Union: |
| 5 Year | Quontic: |
Getting a no-penalty CD is a good option to avoid paying early withdrawal fees. Otherwise, building a CD ladder with short-term CDs might be helpful. But if you can keep your CD untouched until it matures, you can safely avoid paying penalties.
What's the Catch with No-Penalty CDs?
After opening your no-penalty CD, most banks won't allow you to withdraw your money a week or two. After this initial period, you can withdraw early with no charges.
Also, when you do withdraw your no-penalty CD, you usually have to take out the whole amount. Most banks do not allow partial withdrawals. But some might let you withdraw only your interest earnings.
Yes, your deposits in no-penalty CDs are federally insured for up to $250,000 by the FDIC or the NCUA. You can rest assured that your money is protected even if your bank or credit union fails.
Pros and Cons of a No-Penalty CD
Pros:
- No early withdrawal penalties
If you need your money before the end of the term, you can withdraw without penalties. This makes it a good option if you want a CD, but not the commitment. - More flexibility
If APYs rise and you see another account with a higher rate, you can easily take out your money and invest it elsewhere. You don't need to miss out on better opportunities. - Secure and guaranteed returns
Your deposits are federally insured for up to $250,000. Your rate is also fixed during the term so you don't have to worry about interest rates changing.
3-Month No-Penalty CD - 5.18% APY
- $1 minimum deposit
- No fees
- 24/7 online access to funds
- FDIC insured
Cons:
- Limited availability and term options
Unfortunately, no-penalty CDs are not offered by all banks. And when they are available, you usually have limited options for term length. - No additional deposits and partial withdrawals
Unlike savings accounts, you typically cannot add more deposits to your no-penalty CD once it's opened. You usually can't make partial withdrawals either.
Early withdrawal penalties can cost between 3 months to 1 year's worth of interest. The amount can differ between institutions, but the penalty amount usually depends on the CD's term. Most long-term CDs will have higher penalties.
High-Yield Savings Premier - 5.31% APY
- No account activity or maintenance fees
- $500 minimum opening deposit
- FDIC insured
How to Choose the Best No-Penalty CD
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If you're set on getting a no-penalty CD, here are some questions you can ask yourself while looking for one:
What is the APY?
You want the highest rates to earn bigger returns. Usually, smaller online banks and credit unions will offer the best rates. So don't be afraid to look at these options (they're just as safe as big banks as long as they're a member of FDIC or NCUA).
What is the term?
You want to get a no-penalty CD with a term that fits your financial goals. Although you have the option to withdraw flexibly, you should still get a no-penalty CD that can benefit you during a specific timeline.
When can I withdraw?
Usually, you can withdraw your no-penalty CD a week or two after funding the account. But this is at the discretion of the bank or credit union.
Some may allow you to close your account six days after funding it[1]. It's best to check with your bank or credit union to confirm when you can withdraw your no-penalty CD.
What is the minimum deposit?
Some no-penalty CDs may have minimum opening requirements. This could range from as low as $1 to over $2,500. So, make sure to choose a no-penalty CD that fits your budget.
| APY | Minimum Deposit | ||
|---|---|---|---|
| Mission Valley Bank: 3-Month No-Penalty CD | 5.18% | $1 | Learn More |
| Ponce Bank: 4-Month No Penalty CD | 5.17% | $1 | Learn More |
| Technology Credit Union: 5-Month No Penalty CD | 5.15% | $1 | Learn More |
| Blue Federal Credit Union: 9-Month No Penalty CD | 5.10% | $1 | Learn More |
| Freedom Bank: 9-Month No-Penalty CD | 4.90% | $1 | Learn More |
| Sallie Mae Bank: 14-Month No Penalty CD | 4.75% | $1 | Learn More |
| SkyOne Federal Credit Union: 12-Month No-Penalty CD | 4.75% | $1 | Learn More |
| Sallie Mae Bank: 10-Month No Penalty CD | 4.70% | $1 | Learn More |
| Freedom Bank: 12-Month No-Penalty CD | 4.60% | $1 | Learn More |
| GreenState Credit Union: 12-Month No Penalty CD | 4.60% | $1 | Learn More |
| CIT Bank No Penalty CD | 3.50% | $1,000 | Learn More |
| mph.bank: 6-Month No-Penalty CD | 3.00% | $1 | Learn More |
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Alternatives to No-Penalty CDs
Although no-penalty CDs are flexible, they may not be the best option for you. Here are other options you can consider:
High-yield savings accounts
An online high-yield savings account will let you add more deposits or withdraw money when you need to. But the rates are not fixed. Depending on market conditions, that could work in your favor, or not.
- Harborstone Credit Union:
Money Market Deposit Account - 5.25% APY - American First Credit Union:
Money Market Deposit Account - 5.24% APY - DR Bank:
High-Yield Savings Account - 5.23% APY - InRoads Credit Union:
High-Yield Savings Account - 5.23% APY - UNCLE Credit Union:
Money Market Deposit Account - 5.23% APY - Nelnet Bank:
High-Yield Savings Account - 5.22% APY - CloudBank 24/7:
High Yield Savings Account - 5.22% APY - OptimumBank:
Money Market Deposit Account - 5.21% APY
CD ladders
You can build a CD ladder with short-term CDs to address your liquidity needs. The CDs will mature in shorter intervals which gives you some flexibility with your funds. Some might also have better rates than no-penalty CDs.
- Quontic:
3 Month CD - 5.50% APY - Ponce Bank:
1-Month High-Yield CD - 5.24% APY - Mission Valley Bank:
1-Month High-Yield CD - 5.24% APY - Dayspring Bank:
1-Month High-Yield CD - 5.23% APY - The Atlantic Federal Credit Union:
1-Month High-Yield CD - 5.20% APY - Generations Bank:
6-Month High-Yield CD - 5.18% APY - The State Exchange Bank:
4-Month High-Yield CD - 5.15% APY - Prism Bank:
1-Month High-Yield CD - 5.15% APY - Sterling Federal Bank:
3-Month High-Yield CD - 5.10% APY - Ohio State Bank:
6-Month High-Yield CD - 5.10% APY
High-yield checking accounts
High-yield checking accounts can offer decent rates and great perks if you meet certain criteria (like balance or monthly activity requirements). They are good to use for day-to-day spending.
- Consumers Credit Union:
Free Rewards Checking - Earn Up to 5% APY
What the Experts Say
CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:
Bottom Line
No-penalty CDs might be a good alternative to regular CDs if you want to avoid early withdrawal penalties. But they are quite rare and may have limited term options.
When in doubt, step back and assess what will be a good investment for you. Ultimately, a no-penalty CD must play well with your financial goals.
References
- ^ eCFR. Truth in Savings (Regulation DD), Retrieved 10/25/2023
Write to Rue Atanacio at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
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