Banking » Compare Banks » Best No Penalty CD Rates For February 2024
Advertiser Disclosure This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval. This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof. Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.

Best No Penalty CD Rates For October 2024

No penalty CD has no penalty when you withdraw funds, but the rates are typically lower. Here are the top no penalty CDs to consider:
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: September 10, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: September 10, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

If you’re looking for a safe investment, one of the best products is a CD. However, one of the drawbacks of CDs is that you are tying your funds up for the specified term. This means that if you have a two year CD, if you need to withdraw funds in the first two years, you’ll be hit with an early repayment penalty.

This is typically a number of days of interest, which is often determined by the length of your CD term. Generally, shorter term CDs have a fewer number of days of interest penalty, while longer term CDs have more. Depending on the financial institution, this can be as little as 30 days, but it could be up to 365 days of interest if you have a CD with a term of five years or more.

However, this can be overcome with a no penalty CD. As the name suggests, a no penalty CD means that you will not incur a penalty if you withdraw some or all of your funds before your CD matures.

No Penalty CD Rates

No penalty CD is not so common. However, you can still find it in a couple of banks and financial institutions.

The terms are varied, usually, around 1 year and the rates are slightly below the regular CDs. Here are the rates for no penalty CDs, as of October 2024:

Bank / Financial Institution
CD Term
APY
Citi Bank
12 Months
0.05%
Marcus
13 Months
4.50%
CIT Bank
11 Months
3.50%
Ally Bank
11 Months
4.50%

What Are The Main Drawbacks of a No Penalty CD?

No Penalty CDs are not perfect and there are some potential drawbacks. These include:

  • Lower rates: Typically, no penalty CDs don’t offer the same rates as their counterparts. There are some exceptions, but if you are looking for the highest possible rates, a no penalty CD is not likely to be your top pick.
  • Some withdrawal restrictions: There is usually a restriction that you cannot make a withdrawal in the first number of days after funding your CD. This should not be much of a problem for most people, but it does mean that you cannot withdraw at any time.
  • Limited terms: The other possible drawback of no penalty CDs is that they often have limited terms. Many financial institutions only offer one or two term options on their no penalty CDs, so they are not as flexible as conventional CDs.
Top Offers From Our Partners

UpgradeLogo

Savings Rate: 4.69% APY
CIT-Bank-Logo
Savings Rate: Up to 4.85% APY

live-oak-bank-logo

Savings Rate: 4.30% APY
Quontic bank logo
Savings Rate: 4.50% APY

valley direct logo

Savings Rate: 4.75% APY APY

consumers credit union logo

CD Rate: 5.00% – 5.20% APY
Advertiser Disclosure
We get compensated for these product offers

How Much Does a No Penalty CD Pay?

Again, this is a question that does not have an easy answer. Typically no penalty CDs have a lower APY compared to traditional CDs, but there can be a massive difference between different banks and financial institutions.

If you think a no penalty CD is a good product for you, it is important to shop around with traditional and online banks, credit unions and other financial institutions, to see which offers the best deal right now.

Bank / Financial Institution
CD Term
APY
Interest Earned
Citi Bank
12 Months
0.05%
$3,410
Marcus
13 Months
4.50%
$3,810
CIT Bank
11 Months
3.50%
$3,776
Ally Bank
11 Months
4.50%
$3,215

When to Consider a No Penalty CD

As we have touched on, there are both positives and potential negatives associated with no penalty CDs. There are a number of circumstances when you should consider a no penalty CD including:

This is the most obvious reason to consider a no penalty CD, as you are not tied to the CD term.

If you decide that you need access to the funds, in most cases, you can initiate a transfer and have the money in your checking account within one or two business days.

This is unusual, but there are some circumstances where a no penalty CD offers a better rate.

For example, the current Ally Bank rates mean that its no penalty 11 month CD offers a higher APY compared to its 3,6 and 9 month high yield CD.

In this scenario, you have nothing to lose with a no penalty CD. If a better rate does come into the marketplace within the CD term, you can withdraw your funds with no penalty to take advantage.

When You May Want to Skip a No Penalty CD?

On the other hand, there are some circumstances when you may want to skip a no penalty CD. These include:

  • You have an emergency fund: If you already have an emergency fund and have the cash to cover most situations, you may prefer to skip a no penalty CD and take advantage of the higher rates offered with conventional CDs.
  • You’re creating a CD ladder: If you are setting up a CD ladder, it is not very likely that you will need early access to your funds. In this case, you are more likely to shop around for the highest possible rates and CDs offering more flexible term lengths to craft your ladder.

No Penalty CD vs Savings Account: Which Is Better

In comparing a no-penalty CD and a savings account, there is no easy answer as to which one is best, as it all depends on your chosen financial institution.

If you’re looking for the best rates and compare a traditional savings account with a no penalty CD from an online bank, the CD will likely win.

However, the reverse can also be true, if you’re looking at a CD from a traditional bank and an online savings account. So, you must consider like for like products, but there are a few important differences to be aware of.

What Are The Differences?

Firstly, CDs do not allow funding after the initial deposit. You may have a grace period to add more funds, but once this has passed, the money in the CD is locked and you cannot supplement the balance. With a savings account, you can add money as and when you like. This means that if you’re looking for an account to build your savings fund, a savings account is more appropriate.

Another key difference is how you can access your funds. While a no penalty CD will not impose a charge if you withdraw funds, you will need to transfer the money out of the CD, or visit a physical branch to get your hands on the cash. Many savings accounts are provided with an ATM card, so you can simply withdraw the cash you need.

No penalty CDs should still be considered a short to medium term investment vehicle. Ideally, you will leave the funds in the account for the full term. Even if you don’t incur a penalty, if you choose the right product, you should be able to get a better rate compared to the typical savings account, with the reassurance that you can access your cash if you should need it.

No Penalty CD vs Traditional CD: How They Compare?

We’ve already covered some of the fundamental differences between a no penalty CD and a traditional CD, but it may be important to reiterate these.

Traditional CDs tend to offer a better APY, but your money is locked in for the entire CD term. If you need the funds before the CD matures, you will incur an interest penalty. On the other hand, a no penalty CD allows you to withdraw some or all of the funds without incurring an early withdrawal fee.

So, you will need to think carefully about which product is best suited to your specific circumstances and requirements.

How We Determine the Best No Penalty CDs: Methodology

The Smart Investor team extensively reviewed various banks and credit unions to identify the best no penalty CD rates available. We considered key factors essential for no penalty CDs, focusing on four main categories:

  • Interest Rates and Terms (50%): We evaluated the interest rates offered by the No Penalty CDs, as well as the terms and conditions associated with the accounts. This included the length of the CD term, any penalties for early withdrawal, and the minimum deposit required. Banks offering competitive interest rates and more flexible terms received higher ratings in this category.

  • Account Features (20%): This category assessed the features and benefits offered by each No Penalty CD, such as the ability to withdraw funds without penalties, options for automatic renewals, and any additional perks or bonuses. No Penalty CDs providing more flexibility and added benefits earned higher scores.

  • Customer Experience (20%): We closely examined the ease of opening a No Penalty CD account, communication with customer service representatives, the usability of online banking platforms (tested by our team), and the responsiveness of customer support. Banks with streamlined account opening processes, responsive support, and user-friendly online platforms received higher ratings.

  • Bank Reputation (10%): Our team analyzed each bank's reputation based on factors such as customer satisfaction ratings, JD Power scores, TrustPilot reviews, and the bank's Better Business Bureau (BBB) profile. Banks with positive reputations and a history of customer satisfaction received higher ratings.

In each of these categories, we assigned weights to various features and qualities to ensure a comprehensive evaluation of each No Penalty CD.

FAQs

As of October 2024, you can get around 3-4% if you deposit your money in no penalty CD for about 12 months. 

The interest earned on a no penalty CD varies depending on the bank or financial institution offering the CD and the terms of the CD. It is important to research and compare different options to find the best interest rate and terms for your needs.

A no penalty CD, also known as a liquid CD, is a type of certificate of deposit that allows the account holder to withdraw funds without incurring any penalties.

Unlike traditional CDs, which typically impose a penalty for early withdrawal, a no penalty CD allows the account holder to access their money at any time without penalty.

It is difficult to predict exactly how high no-penalty CD rates will go in the future as they are affected by various economic factors such as inflation and interest rates. 

As of October 2024, the expected FED rate suppose to get even higher than the current rate, so no penalty CD rate may go higher in the next couple of months.

It depends on the current interest rates and the terms of the CD. A no penalty CD typically has a lower interest rate than a traditional CD, but it allows you to withdraw your money without penalty.

This can be a good investment option for those who may need to access their money before the CD matures. However, if interest rates are high, you may be able to earn a higher return with a traditional CD.

Compare CD Rates

Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Search
Best CD Rates
Top Offers From Our Partners

UpgradeLogo

Savings Rate: 4.69% APY
CIT-Bank-Logo
Savings Rate: Up to 4.85% APY
Quontic bank logo
Savings Rate: 4.50% APY

consumers credit union logo

CD Rate: 5.00% – 5.20% APY
Advertiser Disclosure
We get compensated for these product offers
Top Offers From Our Partners

PNC bank logo

Promotion:
Up to $400 Open a new, select Virtual Wallet product and receive $500/$2,000/$5,000 or more in qualifying monthly direct deposits within 60 days to earn a $100/$200/$400 bonus.
Subject to state availability
PNC Virtual Wallet ® is available in AL, AZ, CA, CO, DC, DE, FL, GA, IL, IN, KY, MD, MI, NC, NJ, NY, NM, OH, PA, SC, TX, VA, WI, and WV. Virtual Wallet ® is offered in the state of MO with the exception of the Greater Kansas City area. Product availability may vary based on where you open your account and the Zip code of your primary address.

Chase_logo

Promotion:
$300 New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account and make direct deposits totaling $500 or more within 90 days of coupon enrollment.. Expired on 1/22/2025
Chase Overdraft Assist
With Chase Overdraft AssistSM, you won’t be charged an Overdraft Fee if you’re overdrawn by $50 or less at the end of the business day OR if you’re overdrawn by more than $50 and you bring your account balance to overdrawn by $50 or less at the end of the next business day

fifth-third-bank-logo

Promotion:
$250 $250 cash bonus if you make direct deposits totaling $2,000 or more within 90 days of account opening.
No Minimum Deposit
Free checking account, no minimum balance, check writing, two days early paycheck

UpgradeLogo

Fees:
No monthly fees No monthly fees and no overdraft fees. Plus get reimbursed for ATM fees with an active account 
Rewards:
Up to 2% cash back Up to 2% cash back on common everyday expenses for active accounts with monthly $1,000 direct deposit, and up to 1% cash back for other purchases 

Promotion:
$500 Use Promo Code “RC500” for a $500 bonus when you apply for a Rewards Checking account
Up to 3.30% APY
to get the maximum rate (up to $50,000) you’ll need monthly direct deposits of $1,500 (0.40% APY), 10 transaction on your debit card (+0.30% APY), average daily balance of $2,500 on Axos Invest Managed Portfolio (+1.00% APY), average daily balance of $2,500 on Axos Invest Self Directed Trading Account(+1.00% APY) and make full monthly payment on loans (mortgage, personal and auto) with Axos account (+0.60% APY).

penfed personal loan

APY on Daily Balances
0.15% APY on daily balances of less than $20,000 or 0.35% APY on daily balances of $20,000 up to $50,000
Get paid up to 2 days early
Set up direct deposits and get your paycheck up to 2 days early

Promotion:
Up to $2,500 You could earn $1,500 or $2,500 if you open a new, eligible HSBC Premier checking account from July 1, 2024 through November 22, 2024, and complete qualifying activities: • Get a $1,500 Cash Bonus: Add New Money of $100,000 to $249,999 in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months. • Get a $2,500 Cash Bonus: Add New Money of $250,000+ in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months. – Cash Bonus will be deposited into your new checking account within 8 weeks of meeting all the offer requirements
Wealth Products & Advice
Get access to wealth products, insights and advice from an HSBC Financial Professional through HSBC Securities (USA) Inc
Advertiser Disclosure
The product offers that appear on this site are from companies from which this website receives compensation.

#1 In Banking

Our Newsletter

Get expert advice, insider tips, fresh banking promotions and rate changes on savings accounts and CDs

Banking Promotions & Latest Rate Updates

Our Banking Newsletter

Sign up for our newsletter and gain access to expert advice,
insider knowledge, and exclusive updates

Sign Up for

Our Newsletter

Join our community for the latest attractive savings rate changes ,expert insights, and member-only perks