The best certificates of deposit offer excellent returns that are guaranteed for the length of your term. They’re one of the most effective low-risk ways to put your savings to work earning interest. But if you decide you need that money you’ve deposited before the account matures, be prepared to lose much of the interest you’ve earned—in some cases, even some of your principal—to the early withdrawal penalties that most CDs charge.
A no-penalty CD solves this particular problem, though the downside is the APY may sometimes be a little lower than what you could get with a traditional CD. What follows are our picks for the best no-penalty CDs currently available.
Editor’s Picks: Best no-penalty CDs of February 2026
Details accurate as of Feb. 18, 2026. Be aware Bank of America CD specifics may depend on your location.
Marcus by Goldman Sachs
Marcus by Goldman Sachs
| APY | 3.95% |
| Term length | 13 months |
| Minimum deposit | $500 |
at Bankrate
- Year Founded: 2016
- Company Headquarters: Draper, UT
- CEO: David Solomon
Marcus by Goldman Sachs has one of the highest interest rates of any no-penalty CD rate on the market. It even flirts with rates offered by many of the top standard CDs.
With a 13-month option, Marcus by Goldman Sachs offers a longer-than usual term for a no-penalty CD. You can secure this rate for more than a year while reserving the ability to yank your money out and place it in another CD if you find a superior APY elsewhere.
Climate First Bank
Climate First Bank
| APY | |
| Term length | 6 months |
| Minimum deposit |
at Climate First Bank
- Year Founded: 2021
- Company Headquarters: St. Petersburg, Florida
- CEO: Lex Ford
It’s relatively rare to find a CD APY above 4.00% Climate First Bank does just that—and with its no-penalty CD, no less. This is higher than the majority of standard CD APYs. Add to that a perfectly reasonable $500 entry point, and it’s a no-brainer option for many.
Just note that its term is relatively short at just six months. That’s not exactly a long time to enjoy this sky-high rate, and the return may be considerably lower by the time your CD has matured. But there’s no harm in getting it while you can.
CIT Bank
CIT Bank
| APY | 3.35% |
| Term length | 11 months |
| Minimum deposit | $1,000 |
at CIT Bank
- Year Founded: 1908
- Company Headquarters: Raleigh, NC
- CEO: Frank Holding, JR.
A 3.75% no-penalty CD is worth a double-take. It’s not as high as the likes of Marcus and Climate First, but it’s still more than double the average standard CD APY, per the FDIC. If you plan to construct a CD ladder that incorporates no-penalty CDs, CIT Bank’s 11-month option can be a great pickup.
Just note that CIT Bank requires a minimum $1,000 deposit for this account. For this reason, it’s not quite as beginner friendly as others on this list.
Ally Bank
Ally Bank
| APY | 3.00% |
| Term length | 11 months |
| Minimum deposit | $0 |
at MoneyLion
- Year Founded: 1919
- Company Headquarters: Detroit, Michigan
- CEO: Michael Rhodes
Ally Bank offers a 3.00% APY for its 11-month no-penalty CD. In addition to its solid return rate, it also comes with Ally’s “Ten Day Best Rate Guarantee” which ensures that you get the best possible APY up to 10 days after account opening. In other words, if the rate goes up after you’ve opened, you’ll automatically adopt that new rate.
Ally also uniquely does not require a minimum deposit to open this account. This makes it ideal for those just dipping their toe into the world of CDs and don’t want to invest much.
Bank of America
Bank of America
| APY | 2.50% |
| Term length | 12 months |
| Minimum deposit | $1,000 |
at Bank of America
- Year Founded: 1904
- Company Headquarters: Charlotte, NC
- CEO: Brian Moynihan
Bank of America’s 2.50% return is still respectable when it comes to no-penalty CDs, but it’s markedly lower than the other options on this list. However, it benefits greatly from brand recognition and the convenience of doing all your banking under one roof. It also allows for partial withdrawals.
Bank of America requires a $1,000 minimum deposit, so it’s one of the least beginner-friendly options on our list.
Do note that Bank of America asks you to enter your ZIP code when visiting their site before they’ll show you product specifics.
What is a no-penalty CD?
A no-penalty CD is a certificate of deposit that is more flexible than a standard CD in that it allows you to withdraw your deposit before the end of your term without charging you a fee for doing so.
You’ll select a term, deposit at least the minimum amount, and let your money earn interest. If you want your money, you can withdraw it for free.
Some banks may allow you to withdraw only a portion of your money, while other banks demand that you withdraw everything and close your account.
How does a no-penalty CD work?
A standard CD requires that you keep your deposit untouched for a predetermined amount of time. For example, if you open a 12-month CD, you must keep your money with the bank for at least 12 months—or be subject to early withdrawal penalties.
A no-penalty CD gives you the right to take your money back without the blowback; you can enjoy a locked-in APY with the freedom to access your money when you need.
It’s worth noting that you typically cannot add additional money into your CD until maturity. Also, no-penalty CDs often still come with a fee if you withdraw your balance within six days from account opening.
Pros and cons of a no-penalty CD
Pros
- Funds can be accessed before account maturity fee-free
- Fixed return rate
- Better earnings than many savings accounts
Cons
- Interest rates are typically lower than the best standard CDs
- Limited term options
- Less liquid than a HYSA which lets you add and remove funds
Are no-penalty CDs worth it?
No-penalty CDs can be worth it for those nervous about putting money into a certificate of deposit.
CDs often provide a higher APY than, say, a high-yield savings account—and they guarantee the same return rate throughout the term of the account. If you’re uncomfortable about promising to keep a large amount of money in the bank for an extended period of time, a no-penalty CD may be just what you’re looking for.
That said, no-penalty CDs tend to come with less impressive return rates than a standard, less-flexible CD. Depending on the disparity between a bank’s standard and no-penalty CD rates, you may decide that they are in fact not worth the bother.
How to choose the best no-penalty CD
Choosing the best no-penalty CD is similar to choosing any other type of CD. You’ll primarily search for:
- The highest earning rate
- An account with a minimum deposit that you can afford
- Ideally, the option to withdraw only a portion of your deposit
Remember—with a no-penalty CD, there is no risk involved with selecting a lengthy CD term because you can extract your money whenever you want.
For this reason, choosing the lengthiest term possible is the right play (assuming its return rate is competitive). It’ll guarantee a strong APY for a long while. If another CD arises with a better return, you can simply take your money from your current no-penalty CD and place it in the better one.
Alternatives to no-penalty CDs
The following options can be worth considering, depending on what financial goals you’re trying to accomplish.
- CD ladder: You can avoid tying up a meaningful amount of your money for an extended period of time by strategically opening several CDs at once, each with varying term lengths. With CDs that mature every few months or so, you’ll frequently have access to a portion of your total investment.
- High-yield savings account (HYSA): Some HYSAs offer interest rates competitive with some of the best CDs. The downside is that a HYSA APY isn’t fixed; it can change depending on market shifts, bank decisions, etc. But you’ll be able to access your money multiple times each month.
- Money market account (MMA): Essentially a blend of checking and savings, an MMA often comes with interest rates similar to a HYSA but with the added benefit of things like check-writing privileges and a debit card. Again, you can access your money multiple times each month—unlike a standard CD.
The takeaway
A No-penalty CD can be great for someone who wants to earn high APY but still wants access to their money. The rub is that you’ll often trade a lower interest rate for that flexibility. Still, it’s possible to find no-penalty CDs with terrific rates after some poking around.
Frequently asked questions
When can you withdraw money from a no-penalty CD without paying a penalty?
You can typically withdraw money from a no-penalty CD without paying a penalty any time beginning on the seventh day from account opening. Touch your money before then, and you’ll often get dinged with a nominal fee.
Do no-penalty CDs have lower interest rates than regular CDs?
Yes, no-penalty CDs generally have lower interest rates than regular CDs.
Can you lose money in a no-penalty CD?
You won’t lose money in a no-penalty CD from early withdrawal (unless you access your money within six days of account opening). However, you can effectively lose money with any CD if the APY is less than the inflation rate.
Are no-penalty CDs FDIC-insured?
Yes, no-penalty CDs are generally FDIC-insured (as long as the bank itself is). The FDIC should cover you up to $250,000 per account holder per ownership category.
Is a no-penalty CD better than a high-yield savings account?
A no-penalty CD can be better than a high-yield savings account in that its APY is fixed and guaranteed for the duration of your account term. However, HYSAs allow more freedom to add and remove money as you wish.
