As of December 4, 2023, the best no-penalty CD interest rate is 5.37% APY with Greenwood Credit Union. The minimum account opening deposit is $1.00.
If you’re looking for a safe place to stash your money, you might want to consider no-penalty CDs. These accounts offer the security of a CD with the bonus of being able to withdraw your funds without penalty if needed. This can be a great option if you’re worried about market volatility or need easy access to your cash. This comparison will discuss the best no-penalty CD rates available right now. So whether you’re just starting to save or are looking for a higher yield, we’ve got you covered!
What Are No-Penalty CDs?
A No-Penalty CD is a type of Certificate of Deposit that allows investors to withdraw their funds before the maturity period without incurring any penalty. This makes No-Penalty CDs a popular option for investors who want to invest in CDs but are worried about the potential penalty fees associated with early withdrawals. These CDs typically have a slightly lower interest rate than traditional CDs, but their flexibility makes them an attractive option for many investors.
How Do No-Penalty CDs Work?
No-penalty CDs work the same way as traditional CDs, with one significant difference: they allow investors to withdraw their funds before the maturity period without penalty. Typically, No-Penalty CDs have a fixed interest rate lower than traditional CDs, but this varies depending on the financial institution. They also have a fixed term, usually six months to 5 years. Therefore, if the investor decides to withdraw their funds before the maturity period, they will not incur any penalty fees. Still, they will only earn the interest accrued until that point.
Benefits of No-Penalty CDs
No-penalty CDs offer several benefits, making them an attractive option for investors. Some of these benefits include:
Flexibility
The primary benefit of No-Penalty CDs is their flexibility. They allow investors to access their funds before maturity without penalty fees. As a result, this is an excellent option for investors who may need access to their funds in case of an emergency or unexpected expense.
No Risk of Penalty Fees
Another benefit of No-Penalty CDs is that investors do not have to worry about incurring penalty fees for early withdrawals. This makes them an excellent option for investors unsure how long they want to keep their funds invested.
Competitive Interest Rates
No-penalty CDs typically offer competitive interest rates, which means investors can earn a higher rate of return on their investment than they would with a traditional savings account.
Earn The Highest Interest Rates On Savings Today
Fixed annuities are almost identical to Certificates of Deposit (CDs) accounts and provide higher interest rates and penalty-free withdrawals for income.
| Term | Insurance Company | APY |
|---|---|---|
| N/A | Money Market Account – American First Credit Union | 5.29% |
| N/A | Money Market Account – StagePoint Federal Credit Union | 5.29% |
| N/A | Savings Account – Customers Bank | 5.30% |
| 12 Months | CD – Western Alliance | 5.51% |
| 5 Years | Clear Spring Fixed Annuity | 6.00% |
Disclaimer: This is a review. The Annuity Expert is not associated with a bank or credit union. However, fixed annuities are sold at most financial institutions. We aim to help you find the highest interest rates for your retirement savings. We may receive a small referral fee if you purchase something using a link in this guide.
Best No-Penalty CD Rates in 2023
The following banks and credit unions offer the highest CD rates with no penalties.
Blue Federal Credit Union
Blue FCU offers a No-Penalty CD with a fixed interest rate of 5.10% APY for 9 months. This CD has a $1 minimum deposit requirement, and investors can withdraw their funds after the first thirty days of account opening without incurring penalty fees.
Mission Valley Bank
Mission Valley Bank offers a No-Penalty CD with a fixed interest rate of 5.35% APY for 3 months. This CD has a $1 minimum deposit requirement, and investors can withdraw their funds after the first thirty days of account opening without incurring penalty fees.
Technology Credit Union
Technology Credit Union offers a No-Penalty CD with a fixed interest rate of 5.36% APY for 5 months. This CD has a $1 minimum deposit requirement, and investors can withdraw their funds after the first thirty days of account opening without incurring penalty fees.
Ponce Bank
Ponce Bank offers a No-Penalty CD with a four-month fixed interest rate of 5.30% APY. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first thirty days of account opening without incurring any penalty fees.
CIT Bank
CIT Bank offers a No-Penalty CD with a fixed interest rate of 4.90% APY for 11 months. This CD has a minimum deposit requirement of $1,000, and investors can withdraw their funds after the first seven days of account opening without incurring any penalty fees.
Sallie Mae
Sallie Mae Bank offers No-Penalty CDs with a fixed interest rate of 4.75% APY for 14 months or 4.70% for 10 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first seven days of account opening without incurring any penalty fees.
MPH Bank
MPH Bank offers a No-Penalty CD with a fixed interest rate of 5.20% APY for 6 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
Freedom Bank
Freedom Bank offers a No-Penalty CD with a fixed interest rate of 5.15% APY for 12 months or 5.10% APY for 9 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
Green State Credit Union
Green State Credit Union offers a No-Penalty CD with a fixed interest rate of 5.30% APY for 12 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
Sky One Federal Credit Union
Sky One Federal Credit Union offers a No-Penalty CD with a fixed interest rate of 5.00% APY for 12 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
American First Credit Union
American First Credit Union offers a No-Penalty CD with a fixed interest rate of 4.90% APY for 3 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
First Mid Bank & Trust
First Mid Bank & Trust offers a No-Penalty CD with a fixed interest rate of 4.82% APY for 12 months. This CD has a minimum deposit requirement of $1, and investors can withdraw their funds after the first six days of account opening without incurring any penalty fees.
How to Choose the Best No-Penalty CD for You
Consider the Interest Rate
When choosing a No-Penalty CD, it’s essential to consider the interest rate offered. While No-Penalty CDs typically have slightly lower interest rates than traditional CDs, some financial institutions offer competitive rates. So be sure to compare rates and choose a CD that offers the best return on investment.
Evaluate the Term
No-penalty CDs come with a fixed term, usually six months to 5 years. First, evaluate your investment goals and determine how long you can keep your funds tied up in the CD. Then, choose a term that aligns with your financial goals.
Look at Minimum Deposit Requirements
Some No-Penalty CDs come with minimum deposit requirements. Make sure you choose a CD that fits within your budget.
Consider the Financial Institution
Choose a reputable financial institution with a strong history of customer service. Read reviews and check their ratings with consumer watchdog organizations to ensure you work with a trustworthy institution.
Next Steps
No-Penalty CDs are an excellent option for investors who want to earn a competitive interest rate on their investment without worrying about penalty fees for early withdrawals. When choosing a CD, consider the interest rate, term, minimum deposit requirements, and the financial institution’s reputation. Then, with careful consideration and research, you can choose a No-Penalty CD that aligns with your financial goals and helps you achieve your investment objectives.
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Frequently Asked Questions
Is it a good idea to get a no-penalty CD?
No-penalty CDs offer higher interest rates than savings accounts while maintaining a fixed interest rate. So if you want to earn a higher interest rate and know how long you can save money, a no-penalty CD might be a good fit, especially if you need flexibility.
What does a no-penalty CD mean?
A no-penalty CD (Certificate of Deposit) is a type of savings account banks offer. It comes with a fixed interest rate and allows the account holder to withdraw their funds before the end of the term without incurring any early withdrawal penalties. This contrasts traditional CDs, which typically charge a penalty for early withdrawal. However, no-penalty CDs often offer lower interest rates due to increased flexibility.
How do you get money out of a no-penalty CD?
To get money from a no-penalty CD, contact your bank or financial institution and request a withdrawal. Because it’s a “no penalty” CD, you will not incur any early withdrawal fees, regardless of when you choose to access your funds. The process varies depending on the institution, so you may need to do this online, over the phone, or in person.
What is the difference between a term and no penalty CD?
A term CD (Certificate of Deposit) has a fixed maturity date and penalizes early withdrawal with fees. A no-penalty CD also has a maturity date but allows you to withdraw your money without a penalty before the term ends. Both offer fixed interest rates but no penalty CDs usually offer lower rates due to their flexibility.