Best no-penalty CD rates for January 2025

Written by
Matthew Goldberg
Edited by
Kristen Kuchar
Reviewed by
Robert R. Johnson

Rates updated Dec. 12, 2024 | Content updated Jan. 14

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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 products 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.

Current no-penalty CD trends Caret Up Icon Caret Down Icon

Bankrate Partner average
3.72% APY
National average
1.42% APY
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CD rates remain high, but are projected to move lower.
The Fed is predicted to continue cutting rates in 2025. Read more from Bankrate's experts in our CD rates forecast.
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Bankrate's picks for top no-penalty CD rates

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 editorial listings.

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 The full balance can be withdrawn beginning seven days after funding the account.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

  • Checkmark Icon

    You won’t have to worry about an early withdrawal penalty with a no-penalty CD.

  • Checkmark Icon

    Savings accounts usually have a variable APY, while no-penalty CDs generally offer fixed rates for the duration of the term.

  • Checkmark Icon

    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

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.