6 Best No-Penalty CDs

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Certificates of deposit (CDs) may offer better interest rates than high-yield savings accounts. However, you must typically wait until the CD term ends to withdraw your funds if you want to avoid early redemption penalties.

Fortunately, a no-penalty CD offers the higher interest rates of term CDs along with the ability to withdraw your funds early without fees. 

As a result, you no longer need to decide whether to put your cash in a CD or a high-yield savings account. Instead, you can get an excellent rate with the best no-penalty CDs.

Top No-Penalty CDs

A no-penalty CD can be one of the best short-term investments since you earn a competitive interest rate. Several banks offer attractive rates with low minimum balance requirements. 

In alphabetical order, here are the best no-penalty CD rates.

1. Ally Bank 11-Month CD

Ally Bank offers a fantastic rate for their 11-month no-penalty CD. You’re able to request a penalty-free withdrawal on the seventh day after your opening deposit, similar to most other platforms.

The bank has a 10-day interest rate guarantee. If Ally Bank raises the CD yield within 10 days of opening your account, your rate matches the higher one for the entire term.

When you hold your Ally Bank CD to maturity, you can qualify for a loyalty reward that increases your interest rate if you renew your term. 

In addition, Ally is one of the best online banks as it offers several products, including fee-free savings, checking and investment accounts. 

Term: 11 months

Rate: 4.55% APY

Minimum and Maximum Balance: $1 minimum, no maximum

2. CIT Bank 11-Month CD

CIT Bank requires a relatively high minimum deposit of $1,000, but it tends to offer one of the best no-penalty CD rates. 

You will enjoy the same rate for 11 months and can withdraw money penalty-free seven days after opening your account.

Like other online banks on this list, this platform offers several high-interest savings products. You may also like its eChecking account that offers up to $30 in monthly ATM fee reimbursements.

Term: 11 months

Rate: 4.90%

Minimum and Maximum Balance: $1,000 minimum and no maximum

Learn More: CIT Bank Review: Earn More Interest on Your Savings

3. Citibank 12-Month CD

Citibank no penalty CD

Enjoy the same no-penalty rate from Citibank for 12 months. Your minimum deposit is only $500, which is similar to the bank’s other term CDs.

As with similar platforms, you can withdraw money from this CD the seventh day after account opening.

While this brick-and-mortar bank charges fees for many of its banking products, there are no opening or ongoing fees.

Term: 12 months

Rate: .05% APY

Minimum and Maximum Balance: $500 minimum and no maximum

4. Sallie Mae 10-Month CD

Sallie Mae Bank offers an exclusive interest rate through SaveBetter for 10 months. You are not able to get this CD directly through the bank’s website. 

This CD requires you to open an FDIC-insured custodian account that also lets you deposit cash with other partner banks for savings accounts and CDs.

While this bank offers one of the highest rates, you must wait at least 30 days before requesting a withdrawal. However, since the minimum deposit is only $1, you have more flexibility to build a CD ladder.

Term: 10 months

Rate: 4.70% APY

Minimum and Maximum Balance: $1 minimum and no maximum

5. Sallie Mae 14-Month CD

A 14-month no-penalty CD from Sallie Mae Bank provides a higher yield than its shorter-term 10-month equivalent. The minimum deposit is $1, and the waiting period is 30 days before you can make a withdrawal. 

Similar to Sallie Mae’s 10-month CD, this product is exclusively available through SaveBetter. This platform partners with several federally-insured online and regional banks.

Term: 14 months

Rate: 4.75% APY

Minimum and Maximum Balance: $1 minimum and no maximum

6. Synchrony Bank 11-Month CD

A Synchrony Bank no-penalty CD lets you earn the same competitive rate for 11 months. Additionally, you can deposit as little as $1 to open your account.

While this bank’s rates are competitive, its term CDs and high-yield savings account may offer higher yields. Comparing all of your options can help you find the best rate and term.

Term: 11 months

Rate: 4.50% APY

Minimum and Maximum Balance: $1 minimum and no maximum balance

Comparison of the Best No-Penalty CDs

BankTerm LengthRateBalance Requirements
Sallie Mae14 months4.75%$1
Sallie Mae10 months4.70%$1
Ally Bank11 months4.55%$1
Citi Bank12 months.05%$500 
CIT Bank11 months4.90%$1,000
Synchrony Bank11 months4.50%$1

What To Know Before Opening a No-Penalty CD

Opening a no-penalty CD is straightforward and similar to opening a term CD. However, you have the benefit of added flexibility when redeeming your funds.

Here’s everything you should keep in mind before opening a no-penalty CD.


You can deposit your funds from a linked savings or checking account. Your linked account doesn’t have to be with the same platform offering this interest-bearing product. 

Unlike a savings account, you can only add funds at the account opening. If you want to make an additional contribution, all banks require you to open a new CD. 

Keep in mind that the new account will have a different maturity date and interest rate.

Initial Deposit

The minimum initial deposit is from $1 to $1,000 for most banks. Some institutions may offer higher yields if you commit more cash. 

Since CDs only accept a single upfront deposit, you won’t have to worry about ongoing minimum balance requirements like checking or savings products.

Maximum Deposit

Most banks have maximum deposit limits of up to $1 million in one CD. 

However, a more practical threshold is the FDIC Insurance coverage limit. This covers up to $250,000 for most federally-insured banks and credit unions.

Additionally, a bank may encourage opening a jumbo CD instead if you intend on investing $100,000 or more. 

Term Limits

Most no-penalty CDs have relatively short maturity dates of approximately 11 to 14 months as they are an alternative to high-yield savings accounts and money market accounts. 

However, one difference between these two accounts is that you’re guaranteed the same interest rate for the term, even if savings account rates decrease.

The term length is usually shorter than term CDs because you can withdraw your funds after six days. Therefore, there is a minimal incentive for banks to offer longer terms unless the minimum investment period is longer.


Most institutions allow you to start requesting redemptions after an initial six-day waiting period. Once the redemption window opens on day seven, you can redeem your CD balance and earned interest.

Just as you can only make a one-time initial contribution, all CDs require withdrawing your entire balance and closing the account.

The two best reasons to withdraw your funds early can be to reinvest your cash at a higher rate or if you need the money for an expense.

If you allow your CD to mature, you can either:

  • Transfer your original deposit and interest into your linked bank account
  • Renew the CD for a new term and interest rate

Your bank will notify you 30 days before the maturity date to review your options. One benefit of renewing a no-penalty CD is that if you change your mind, you can request a withdrawal six days after the bank opens your follow-up account without penalty.

Features to Consider in a No-Penalty CD

There are several factors to compare as you look for the best no-penalty CD. Make sure to keep these in mind as you evaluate the different options.


The annual percentage yield (APY) is the total interest that you will earn for the year. For example, if you invest $10,000 in a 12-month CD with a 3.00% APY, you will earn $300 in interest.

Interest compounds monthly, but you might not be able to receive these dividends until you redeem your shares.

Longer CD terms usually have higher rates because you’re pledging your funds for a longer investment period. 

However, rates can vary widely between banks, so you will need to choose the perfect balance between a high APY and an investment period.

Since you won’t encounter early redemption penalties, you may consider choosing the longest term with the highest rate. If rates increase, you can switch products to earn more interest.

On the flip side, if rates decrease, you still get to receive the higher rate for the remainder of the CD’s term.

Customer Service and Ease of Use

Being able to access your cash easily is important. After all, what’s the purpose of earning a high interest rate if you have trouble getting your account or the bank seems like a scam?

Before depositing cash, you may want to try out the bank to determine if their banking experience is frustration-free. 

In addition, you should see which products your current bank offers so that you don’t have to spend time creating a new account or transferring funds.

FDIC or NCUA Insurance

While CDs are a low-risk investment that can earn monthly income, a bank failure is always possible. You should only consider opening CDs and other banking accounts that qualify for FDIC Insurance (banks) or NCUA Insurance (credit unions). 

The coverage limit is up to $250,000 for either banking insurance program. If the bank issuing your CD goes out of business, this insurance fund can repay your balance up to $250,000.

For peace of mind, all the CDs on this list are eligible for FDIC or NCUA insurance. 

Minimum Balance Requirements

You must satisfy the minimum balance requirements to open your CD. Since you cannot make subsequent contributions, be sure to invest what you’re comfortable with for your lump sum.

It’s possible to open multiple CDs in the future as more cash becomes available. That said, the interest rate for each account might be different.

FAQs About No-Penalty CDs

Do you still have questions about no-penalty CD rates? These answers might be able to help guide you as you decide which account to open.


A no-penalty CD is worth pursuing when you can earn a better rate than a savings account but don’t want the long-term commitment of a traditional term CD. 

You have the flexibility to earn interest until the maturity date or move your cash early if you find a better way to invest.

Rates, terms and investment minimums vary by bank. As a result, spending a few minutes comparing your options can help you find the best CD rate available.