7 Best No-penalty CD Rates for January 2023

Shawn Manaher
Shawn Manaher
Updated on December 13, 2022
best no penalty cd rates

A certificate of deposit (CD) is an excellent way to earn a higher interest rate than you would with a checking or savings account, but without the risk that comes with investing in stocks. But traditional CDs charge you a penalty if you withdraw your funds early.

No-penalty CDs offer an alternative to this, letting you withdraw your funds early without having to pay a penalty. But with so many companies offering CDs, how do you find the best no-penalty CD rates? We’ve done the hard work for you by gathering information on the banks, credit unions, and financial institutions with the best rates on no-penalty CDs.

What Are the Best No-penalty CD Rates?

When it comes to determining the best no-penalty CD rates, the rate itself will obviously be the most important factor. Still, you must consider a few other things. Keep the following factors in mind as you compare no-penalty CDs:

  • Earn rate (APY): This indicates how much you will earn on your deposit. We ranked our list in order from highest to lowest APY.
  • Compounding schedule: Daily compounding is ideal, as you earn more quickly.
  • Length of CD investment: Most no-penalty CDs will be about 11 or 12 months, but there are exceptions.
  • Minimum deposit: A $500 minimum deposit is most common, but some banks don’t even require a minimum deposit. Other banks have a $1,000 minimum.
  • Maximum deposit: Some banks place a maximum on CD deposits, as they want to limit your ability to maximize the high-interest rate. This is only a concern if you want to make a large deposit.
  • Whether you can make partial withdrawals: Most no-penalty CDs don’t allow partial withdrawals, but some do.
  • How many early withdrawals you can make and when: If you can make partial withdrawals, check out how frequently you can do so.
  • Additional fees: Look into other possible costs, like maintenance and account opening fees.
  • Reputation of financial institution: Banking with a well-respected financial institution will give you more confidence in your investment.
  • Other services from the financial institution: It can be easier to open a CD at a bank where you already have an account. On the other hand, it may also be easier to open future accounts once you open a CD at a bank. Remember that it is easier to manage all finances from one account.
  • Ease of opening an account: Most no-penalty CDs let you open your account online in a matter of minutes.
  • Whether it is insured by the FDIC (Federal Deposit Insurance Corp) or the NCUA (National Credit Union Administration): Always choose a no-penalty CD that is insured, whether by the FDIC or NCUA.

1. USALLIANCE – 4.00%


USALLIANCE is a unique option for CDs or other financial services because it is a full-service not-for-profit financial institution. As most people know, the vast majority of banks are for-profit. In addition to the no-penalty CD, USALLIANCE also offers various regular CDs, including options with higher rates but longer terms. As a credit union, you can access 30,000 surcharge-free ATMs and 6,000 branches in the United States.


  • USALLIANCE has a 4.00% APY, the highest rate you will find for a no-penalty CD.
  • The CD is 11 months. The dividend rate is 3.9230%.
  • There is a minimum deposit of $500, which falls in the average amount.
  • The interest compounds daily and is credited monthly. All withdrawals must be in full.
  • If you prefer a regular CD, you can choose from terms of three to 60 months for an APY of 0.75% to 4.25%.
  • At the time of writing, the only CD from USALLIANCE with a higher APY than the 11-month penalty-free CD is the 24-month CD, with a rate of 4.25%.
  • USALLIANCE is a not-for-profit bank, helping it stand out.
  • You can also opt for a high-dividend savings account, earning 3.00% and with a minimum balance of $500.
  • Maximize all the features of the mobile app for banking.
USALLIANCE – . pricing


The 11-month no-penalty CD from USALLIANCE has an APY of 4.00%.

Bottom Line

If you want to get the absolute best rate on a no-penalty CD, USALLIANCE is a strong option. With the bank’s current offers, a no-penalty CD will actually earn you more than a regular CD with a longer term. You can also get a checking account, savings account, or credit card from USALLIANCE.

America First Credit Union – .

2. America First Credit Union – 3.85%


America First Credit Union offers a no-penalty CD called a Flexible Certificate Account. This is offered in addition to regular CDs, checking accounts, savings accounts, IRAs, loans, and more.


  • Make one penalty-free withdrawal from the CD each quarter.
  • Earn 3.85% APY on this 12-month certificate.
  • The minimum opening deposit is $500.
  • You can set up automatic renewal.
  • You can deposit up to $10,000 each month, for up to $100,000 total deposited in your account. You can set these deposits to be automatic.
  • Regular or bump-rate certificate accounts are available for three to 60+ months with APYs of 2.25% to 4.25%.
  • Non-flexible CDs can also be set to automatically ladder the maturities, with up to 10 per ladder.
  • America First Credit Union is one of the top 10 credit unions in the United States by size.
America First Credit Union – . pricing


The no-penalty CD from America First Credit Union has an APY of 3.85% and a dividend rate of 3.78%.

Bottom Line

Those who prefer banking with credit unions and are looking for high interest rates will appreciate America First Credit Union. Just keep in mind that you only get one penalty-free withdrawal per quarter, not unlimited withdrawals without penalties.

CIT Bank – .

3. CIT Bank – 3.65%


CIT Bank’s no-penalty CD has a slightly higher minimum deposit than others on this list, but at $1,000, it is still accessible. The CD is 11 months long, and you can also choose traditional term CDs, jumbo or RampUp CDs. This bank is a subsidiary of First Citizens Bank as of January 2022.


  • The minimum deposit is $1,000.
  • There are no maintenance or account opening fees.
  • You won’t pay a penalty for accessing your funds starting the seventh day after your deposit. Withdrawals must be in full, not partial.
  • The interest compounds daily.
  • The account is FDIC-insured.
  • Open and fund your account in minutes.
  • Take advantage of the mobile app to access your account. You can also use a calculator to estimate your earnings.
  • Traditional term CDs with an APY of up to 4.50% are also available. Choose from six months to five years. The minimum deposit is $1,000.
  • Jumbo CDs are available with a $100,000 minimum deposit and APY of up to 0.50%.
  • Ramp Up CDs are available with minimum deposits of $25,000 and APY of up to 0.25%.
CIT Bank – . pricing


The APY for CIT Bank’s no-penalty CD is 3.65%.

Bottom Line

CIT Bank offers a competitive interest rate of 3.65% on its 11-month no-penalty CD. If you prefer, you can also choose a traditional CD or a jumbo CD. The bank also offers checking accounts, savings accounts, and loans.

Ally Bank – .

4. Ally Bank – 3.30%


Ally Bank is an online bank without physical locations. Its 11-month no-penalty CD is offered in addition to its regular CD options. One stand-out feature of Ally Bank’s no-penalty CD is that there is no minimum deposit, making it easier for anyone to access CDs.


  • Earn 3.30% APY with an 11-month term.
  • There is no minimum opening deposit. This feature makes it highly accessible.
  • There are no penalty withdrawals. Withdraw the full balance and interest starting on the seventh day. You cannot make a partial withdrawal.
  • There is a Ten-Day Best Rate Guarantee, making it easy to take advantage of rate increases in the first ten days of opening your account.
  • Ally Bank doesn’t charge maintenance fees. Deposits are FDIC-insured.
  • Renewing your CD to any Ally Bank CD gives you a 0.05% Loyalty Reward.
  • Access the mobile app to easily monitor your account.
  • You can open a CD in the name of a trust, offering security and flexibility.
  • Consider a regular Raise Your Rate CD for two or four years with an APY of 3.25%. This is like the Bump Up CDs offered by other banks, which enables you to raise the rate once.
  • Consider a High Yield CD with terms of three months to five years and an APY of up to 4.10%.
Ally Bank – . pricing


Ally Bank’s rate for its no-penalty 11-month CD is 3.30%.

Bottom Line

Ally Bank’s no-penalty CD will appeal to people who don’t want to commit to a minimum opening deposit, even if it is just $500. The ability to get a CD with just $1, $100, or whatever fits your budget makes this type of financial product more accessible to everyone. You can also open a checking or savings account with Ally Bank, get a loan, invest, or apply for a credit card.

Citibank – .

5. Citibank – 3.10%


Choosing Citibank for your no-penalty CD gives you the confidence and convenience that comes with using one of the biggest banks in the United States. Keep in mind that Citibank’s no-penalty CD is 12 months.


  • Get a term of 12 months and an APY of 3.10% on the no-penalty CD.
  • There are no penalties for early withdrawals.
  • The minimum deposit is $500.
  • Consider a regular fixed-rate CD of between three months and five years. Rates vary from 0.5% to 4.15%.
  • Consider a step-up CD with a 30-month term and composite APY of 0.10%. The rate is 0.5% for the first 10 months, 0.10% for the next 10 months, and 0.15% for the rest.
  • Use the Citibank earnings calculator to estimate your earnings with any CD.
  • All Citibank CDs are FDIC-insured.
  • Because of Citibank’s size, it is easy to find a branch near you.
  • Citibank also offers savings, checking, investing, and IRAs.
Citibank – . pricing


The 12-month no-penalty CD from Citibank has an APY of 3.10%.

Bottom Line

Those who prefer to bank with an easily recognizable name will want to consider the no-penalty CD from Citibank. You get confidence from the brand’s reputation and FDIC insurance. The bank also has some unique offerings, like the step-up CD. It’s worth noting that while the APY for the no-penalty CD is highly competitive, some of the fixed-rate CDs have lower-than-average returns. So, always compare rates before choosing a regular CD from Citibank.

Marcus by Goldman Sachs – .

6. Marcus by Goldman Sachs – 3.05%


At a glance, Marcus by Goldman Sachs is a good choice if you want to be able to choose from several no-penalty CDs, as the bank offers three options. However, only the 13-month version earns a spot on this list, and the rates for the shorter terms may be too steep and not worth considering for most people. Still, choosing Marcus for your CD gives you the confidence of the Goldman Sachs name, a factor that reassures many investors.


  • The minimum deposit is just $500.
  • Earn 3.05% APY with the 13-month no-penalty CD.
  • The 7- and 11-month no-penalty CDs earn 0.45% and 0.35%, respectively.
  • Withdraw your funds online without a penalty, starting seven days after you fund your account.
  • Marcus also offers a high-yield savings account with an APY of 3.00%, no minimum deposit, and no fees.
  • Marcus offers high-yield CDs with rates of up to 4.25% APY and terms of six months to six years.
  • Marcus offers a Rate Bump CD, which can switch to a higher rate once per term. The current rate is 3.60% for 20 months.
  • Use the Marcus CD calculator to determine your earnings with any of the CD products.
  • Financial products are FDIC-insured.
Marcus by Goldman Sachs – . pricing


The no-penalty CD APY from Marcus is up to 3.05%, but that rate is just for the 13-month CD. Keep in mind that the APYs for the other no-penalty CDs are significantly lower and far from competitive. The 7-month no-penalty CD earns just 0.45%, while the 11-month CD earns just 0.35%.

Bottom Line

Choosing Marcus for your no-penalty CD gives you the confidence of the Goldman Sachs name. The company also offers a nice variety of other financial products, including various savings accounts, investments, loans, and credit cards. The minimum deposit of $500 is on-par with most other options, making it fairly accessible.

Synchrony Bank – .

7. Synchrony Bank – 3.00%


Synchrony Bank is one of the few options on this list without a minimum deposit requirement, making it accessible to everyone. The bank’s savings account is also competitive, and it offers various traditional CDs, as well as a bump-up CD.


  • Earn 3.00% APY with an 11-month no-penalty CD.
  • There is no minimum balance for any of the CDs. There are no maintenance fees.
  • Traditional CDs are available for three to 60 months with an APY of up to 4.30%. Higher rates are sometimes available for a limited time.
  • Get a bump-up CD with a 24-month term and APY of 3.50%. You can increase the rate once during the term.
  • Consider an IRA CD for tax advantages and retirement planning. Terms can be identical to the other CD offerings but as an IRA.
  • Use Synchrony Bank’s calculator to determine your earnings from any of the CDs.
  • Synchrony Bank offers a high-yield savings account with 3.25% APY, no minimum deposit or balance, and no monthly fees.
  • The bank also offers money markets, IRA money markets, and credit cards.
  • Synchrony Bank is an FDIC member.
Synchrony Bank – . pricing


The no-penalty CD from Synchrony earns 3.00% APY.

Bottom Line

Synchrony Bank offers reasonably competitive rates for its no-penalty CD and other types of CDs. It also has unique offerings, like a tax-advantaged IRA CD. If you still aren’t sure whether to get a no-penalty CD, the Synchrony Bank high-yield savings account offers an alternative thanks to its high interest rate.

What Are No-penalty CD Rates?

With a certificate of deposit, you lock your funds in the bank in exchange for earning a higher interest rate. With a no-penalty CD, you won’t be charged a penalty if you withdraw your funds before the agreed-upon time, which contrasts with traditional CDs, as most will charge a penalty for doing so.

For most no-penalty CDs, you will find terms of about a year. You can also withdraw your full balance without penalty as soon as seven days after funding the CD. For reference, most regular CDs would charge you at least several months’ interest for early withdrawal.

Keep in mind that in exchange for the flexibility that no-penalty CDs give you, you will get a slightly lower interest rate than you would for a regular CD. So, if you know you don’t need to access the funds before the maturity date, it’s better to go with a regular CD. If you want the flexibility to withdraw your funds, choose a no-penalty CD.

Pros and Cons of No-penalty CDs

As no-penalty CDs are one of many banking products available, you may want to consider their pros and cons before choosing this type of investment over other available options.

Pro: No Early Withdrawal Penalties

The biggest advantage of a no-penalty CD is the fact that you won’t pay an early withdrawal penalty, except perhaps in the first week.

Pro: Flexibility

Because there are no penalties for early withdrawal, you can take advantage of increases in rates. You can easily opt to withdraw from your no-penalty CD and put your funds into a new one.

Pro: Higher APYs Than Some Other Account Types

Compared to certain other account types, such as most savings accounts, no-penalty CDs have higher interest rates.

Con: Lower APYs Than Other CDs

While no-penalty CDs tend to have higher interest rates than savings accounts, their earnings tend to be lower than those of regular CDs.

Con: Some Savings Accounts Have Higher APYs

Depending on the CDs and savings accounts in question, savings accounts may have better APYs than no-penalty CDs. This is why you should always compare your options before opening an account.

Pro: Fixed APY

Your APY with a no-penalty CD is fixed, unlike a savings account. This lets you take advantage of high rates when you open your account.

Con: Terms Tend to Be Shorter With Limited Options

People used to traditional CDs may expect a wide range of term lengths, from just a few months to several years or even more. But no-penalty CDs tend to have terms of about a year, give or take a few months. You won’t find many options that are longer or shorter than this. Of course, if you want a longer term, you can always simply renew the CD.

Con: Some Banks Don’t Allow Partial Withdrawals

Depending on the bank, you may have to withdraw your entire CD’s balance without the option of a partial withdrawal. That said, this varies by bank, with some still allowing partial withdrawals. For example, the second on our list, America First Credit Union, allows partial withdrawal of your funds.

Con: Just a Single Deposit

As is standard for any type of CD, no-penalty CDs typically allow only a single initial deposit. If you want to earn the APY on additional deposits, you will have to open a new CD.

Who Should Consider a No-penalty CD

Overall, no-penalty CDs are an appealing option for anyone who wants to build their savings with a high interest rate but without the risk of being unable to access their money. No-penalty CDs give you the flexibility to respond to emergencies and unexpected expenses.

If you have any doubt at all that you may need to access the funds before their maturity date, choose a no-penalty CD over another type of CD. But you may also want to compare rates for high-yield savings accounts.


Choosing one of the best no-penalty CD rates gives you the higher interest rate of a certificate of deposit and the flexibility to withdraw your funds when needed. For many, it is the perfect balance of liquidity and earnings. The above list shows the top no-penalty CD rates available, so you can choose the highest rate that fits your needs.

Shawn Manaher

Shawn Manaher

Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author.

He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.

He loves to share his personal finance tips and money management wisdom with others to help them find financial freedom.
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