Best no-penalty CD rates for December 2024

Written by

Matthew Goldberg

Edited by

Kristen Kuchar

Reviewed by

Robert R. Johnson

Best available rates across different account types for Saturday, December 21, 2024

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What To Know First

Most certificates of deposit (CDs) have one characteristic that consumers don’t like: penalties for early withdrawals. No-penalty CDs, however, are an exception. These certificates of deposit may provide a higher fixed yield than you could earn with a savings account and without having to pay a penalty should you need to withdraw your money early.

The best no-penalty CD rates are generally available at online-only banks. But a credit union or a brick-and-mortar bank may also offer a competitive yield on no-penalty CDs.

Bankrate’s picks for the top no-penalty CD rates

America First Credit Union: 4.20% APY, $500 minimum deposit
Ally Bank: 3.90% APY, $0 minimum deposit
Marcus by Goldman Sachs: 3.90% APY, $500 minimum deposit
Bank of America: 3.51% APY, $1,000 minimum deposit
CIT Bank: 3.50% APY, $1,000 minimum deposit

Note: Annual percentage yields (APYs) shown are as of Dec. 12. Bankrate's editorial team validates this information regularly. APYs may have changed since they were last updated and may vary by region for some products. Bankrate includes only FDIC banks or NCUA credit unions in its listings. Bankrate’s editorial staff has compiled the list of no-penalty CDs on this page. Advertiser offers and other non-editorial listings on the page may be for additional types of deposit products.

Bankrate's picks for the top no-penalty CD rates

America First Credit Union: 4.20% APY, $500 minimum deposit

America First offers a 12-month Flexible Certificate account that is a bit different from a traditional no-penalty CD. It allows one penalty-free withdrawal during the first five calendar days of each quarter. Customers can also deposit up to $10,000 into the CD each month, with up to $100,000 in total additional deposits.

Term	APY	Minimum balance to earn APY
1 year	4.20%	$500

Ally Bank: 3.90% APY, $0 minimum deposit

Ally is an online bank formerly known as GMAC Bank. Ally offers an 11-month no-penalty CD with no minimum opening deposit. You can withdraw your full balance and any interest at any time after the first six days of funding the CD.

Ally also offers a Raise Your Rate CD in terms of two years and four years as well as standard CDs in different terms.

Term	APY	Minimum balance to earn APY
11 months	3.90%	$0

Marcus by Goldman Sachs: 3.90% APY, $500 minimum deposit

Marcus is the consumer banking unit of Goldman Sachs Bank USA. It offers three terms of no-penalty CDs — seven, 11 and 13 months — along with a variety of standard CDs terms and a savings account. The full balance can be withdrawn beginning seven days after funding the account.

Term	APY	Minimum balance to earn APY
7 months	3.90%	$500
11 months	3.90%	$500
13 months	3.90%	$500

Bank of America: 3.51% APY, $1,000 minimum deposit

Bank of America’s 12-month flexible CD lets you withdraw interest and your entire balance prior to maturity. Note that a penalty of seven days’ worth of interest will be charged for withdrawals within the first six days of the term or within six days following any partial withdrawal. The CD automatically renews into a three-month CD at maturity.

Bank of America is one of the largest banks in the U.S. and it has the third most branches in the U.S.

Term	APY	Minimum balance to earn APY
12 months	3.51%	$1,000

CIT Bank: 3.50% APY, $1,000 minimum deposit

CIT Bank, an online bank, became a subsidiary of First Citizens Bank following the completion of a merger in January 2022. In addition to the 11-month no-penalty CD, CIT Bank offers eight terms of regular CDs and four terms of jumbo CDs. Penalty-free withdrawals can be made beginning seven days after the bank has received the funds.

CIT Bank also offers savings and money market accounts.

Term	APY	Minimum balance to earn APY
11 months	3.50%	$1,000

What is a no-penalty CD?

A no-penalty CD usually doesn’t have a penalty if you withdraw the funds before the term ends. Typically, early withdrawal isn’t permitted within the first week of funding or opening a no-penalty CD, but after that, a penalty-free withdrawal is possible.

No-penalty CDs may be a good fit for people who aren’t sure when they’ll need access to their money but still want to earn a possible higher APY.

Generally you would pay a penalty with a no-penalty CD if you withdraw money during the first six days of the term.

Pros and cons of no-penalty CDs

Consider the following pros and cons to see if a no-penalty CD is the right financial choice for you.

Pros

You won’t have to worry about an early withdrawal penalty with a no-penalty CD.
Savings accounts usually have a variable APY, while no-penalty CDs generally offer fixed rates for the duration of the term.
Some no-penalty CDs may carry a higher yield than a savings account.

Cons

CDs that have an early withdrawal penalty generally pay higher yields.
Generally, you won’t be able to withdraw your entire balance from a no-penalty CD until the seventh day after your deposit.

No-penalty CD FAQs

Savings accounts, money market accounts and standard CDs are mainly alternatives to no-penalty CDs.

Compare top-yielding savings accounts and no-penalty CD yields to see which is higher. But keep in mind that savings accounts generally have variable yields and no-penalty CDs usually have fixed APYs.
No-penalty CDs can be worth it when the Federal Reserve lowers rates. Getting a no-penalty CD gets you a fixed yield as rates come down, and it gives you the flexibility to access your money without paying an early withdrawal penalty. Generally liquid savings accounts have variable APYs that will likely decrease if the Fed lowers rates.
Certificates of deposit are safe if they’re held at a bank insured by the Federal Deposit Insurance Corp. (FDIC) or at a National Credit Union Administration (NCUA) credit union and within insurance guidelines and limits. Both FDIC and NCUA accounts are backed by the full faith and credit of the U.S. government.

Research methodology

Bankrate’s editorial team is made up of banking experts. The banks and credit unions on this page are selected based on popularity, Bankrate’s review score and CD APYs. The listings are ordered based on Bankrate’s scoring system, and ties are broken through minimum balance requirements and then alphabetical order.

Note: Bankrate doesn’t include callable CDs or brokered CDs on this page and compares regular CDs and no-penalty CDs separately.

Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank5 Connect, Barclays Bank, Bask Bank, Bethpage Federal Credit Union, BMO Alto, BMO Bank, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Charles Schwab Bank, Chase Bank, CIBC Bank USA, CIT Bank, Citibank, Citizens Access, Comerica Bank, Connexus Credit Union, Credit One Bank, Customers Bank, Delta Community Credit Union, Discover Bank, EverBank, Fifth Third Bank, First Citizens Bank, First Internet Bank of Indiana, First National Bank of America, FNBO Direct, Forbright Bank, Golden 1 Credit Union, Heritage Bank, Huntington National Bank, iGOBanking.com, Jenius Bank, KeyBank, LendingClub Bank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, Openbank, Pentagon Federal Credit Union, PNC Bank, Popular Direct, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, SoFi, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TAB Bank, UFB Direct, US Bank, USAA Bank, Varo Bank, Vio Bank, VyStar Credit Union, Wells Fargo, Zions Bank