Best No Penalty CD Rates – 4.50% APY (February 2023)

With interest rates rising, many investors want to take advantage of the highest deposit rates they’ve seen in years. Since there’s no guarantee that current rates will remain at their current level, many would are looking to Certificates of Deposit (CDs) because they offer an opportunity to lock in current rates for as long as five years (or even more!).

But one of the challenges for savers is that rates continue to rise. You don’t want to lock your funds into a CD if the rate is going to go up at the next FOMC meeting! (and penalties for withdrawing early tend to be quite steep)

Fortunately, there is a solution – no-penalty certificates of deposit.

A no-penalty CD lets you withdraw some or all your funds from the certificate before the maturity date without paying an early withdrawal penalty. The terms will dictate what you are able to do, so read those carefully. This gives you the flexibility to liquidate the certificate and put it into a higher-yielding instrument later on.

There is often a trade-off though – the increased flexibility means that the rates may be slightly lower than for regular-term CDs of the same maturity period.

But if you want to combine a competitive rate with liquidity, it’s hard to beat no-penalty CDs.

If you’re wondering what kind of interest you can earn on a no-penalty CD, here is our list of the best rates available today.

Want to make $100 – $300 for opening a bank account?
Can you get your paycheck direct deposited?

If so, you can often get hundreds of dollars to open a new bank account. Banks are constantly competing for business and this is a great way to put cash in your pocket. I’ve heard from several readers that they’ve made thousands of dollars doing this.

Banks like Chase, Citi, Discover, and others will give you $100 to $300 if you open a bank account and get your paycheck direct deposited into your new account.

👉 Find out which banks will pay you $100+ to open a new account

Table of Contents
  1. No-Penalty CDs: Rate Summary
  2. Best No-Penalty CD Rates
    1. Ponce Bank – 1-Month, 4.50% APY
    2. Sallie Mae – 14-Month, 4.40% APY
    3. CIT Bank – 11-Month, 4.10% APY
    4. USAlliance Financial – 11-Month, 4.00% APY
    5. Ally Bank – 11-Month, 3.85% APY
    6. Citi – 12-Month, 3.40% APY
    7. Synchrony Bank – 11-Month, 3.50% APY
    8. Marcus by Goldman Sachs – 13-month, 3.85% APY
  3. Important Facts about No Penalty CDs
  4. No Penalty CD Frequently Asked Questions
  5. Final Thoughts on No Penalty CDs

🔃UPDATED: Updated with current interest rates and re-ordered the table to reflect the new rates and proper ordering.

No-Penalty CDs: Rate Summary

These are ordered in roughly the highest rate and terms first but rates change all the time so sometimes the table won’t be perfectly ordered.

Also, it’s hard to compare given differing terms and rates so read the whole table to find the best one for your needs.

Should I wait to open a no penalty CD? After the last few Federal Reserve rate hikes, we saw banks increase their no penalty CD rates fairly aggressively. I believe it’s because they thought rates would continue to increase afterwards and banks hoped to “get ahead” of the pack. With the most recent rate hike in December, these banks have not increased their no penalty CD rates. I haven’t updated any of these numbers since the last rate hike and I wonder if they’re expecting the rates to back off.

If you are interested in a no penalty CD rate, I’d lock them in today just to be safe.

Bank NameCD TermCD Rate
Ponce Bank1-Month*4.50% APYLearn more
Sallie Mae14-Month4.40% APYLearn more
CIT Bank11-Month4.10% APYLearn more
USAlliance Financial11-Month4.00% APYLearn more
Ally Bank11-Month3.85% APYLearn more
Citibank12-Month3.40% APYLearn more
Synchrony Bank11-Month3.50% APYLearn more
Marcus by Goldman Sachs13-month3.85% APYLearn more

Best No-Penalty CD Rates

Below are some of the best banks currently offering the highest no-penalty CD rates.

All rate quotes and terms are accurate as of the publishing date but are subject to change, so confirm on the bank’s website.

Ponce Bank and Sallie Mae offer these high rates through the SaveBetter platform. With SaveBetter, you open an account with SaveBetter and get the higher rate through them. Your account is managed through SaveBetter but the funds are still at the bank and get FDIC insurance. You don’t get an account number at the bank though, it’s all grouped together with other SaveBetter customers, but it’s still insured and protected. The benefit is that you get higher rates and can easily move it between partner banks to get even higher rates. SaveBetter negotiates these higher rates because they can get deposits for the bank much cheaper than their own marketing efforts.

Click here to learn more about how SaveBetter works.

Ponce Bank – 1-Month, 4.50% APY

Ponce Bank offers several CDs worth knowing about.

– 1-Month, 4.50% APY CD

First, there is a 1-Month CD with an interest rate of 4.50% APY.

⚠️ This is NOT a no-penalty CD, it’s just a CD with a super short maturity and high rate, which makes it very similar to a no-penalty CD. That’s why we listed it. With a rate of 4.50% APY, it trumps the field.

– 4-Month, 4.41% APY No Penalty CD

Alternatively, if you prefer to stick with no penalty CDs, you can get the 4-Month CD with an interest rate of 4.41% APY.

You can open a CD with a minimum deposit of just $1 and no maintenance fees.

New York City-based Ponce Bank began operating in 1960. As a Community Development Financial Institution (CDFI), the Bank works as an investor in the future of underserved and under-banked communities. But they make their savings products available to consumers nationwide. 

Ponce Bank also offers checking, savings, and retirement accounts, complete with access to online banking. They also provide business banking, residential mortgages, home equity lines of credit, and consumer loans.

👉 Learn more about this offer

Sallie Mae – 14-Month, 4.40% APY

Sallie Mae also offers banking services, including a 14-Month No Penalty CD with an outstanding 4.40% APY. You can open a certificate with as little as $1, and interest is compounded daily and credited monthly.

You can make a one-time full withdrawal of the CD with no penalty, you just have to wait until 7 days after opening.

They also have a 10-Month No Penalty CD with a yield of 4.25% APY but I don’t know why you’d pick that over the higher rate.

Sallie Mae also offers term CDs ranging from six months to 60 months, paying interest as high as 3.25% APY. Each of these CDs requires a minimum deposit of $2,500. Their High-Yield Savings Account pays 1.95% APY on all balances with no maintenance fees. They also offer a Money Market Account with no minimum balance and maintenance fees.

👉 Learn more about this offer

CIT Bank – 11-Month, 4.10% APY

CIT Bank’s No-Penalty, 11-Month CD is paying 4.10% APY, compounded daily, and requires a minimum deposit of $1,000. There is no penalty if you access funds before the CD matures.

CIT Bank also offers their interest-bearing eChecking account, currently paying from 0.10% APY to 0.25% APY and a High-Yield Money Market account paying 1.55% APY. They also offer term CDs, which top off at 0.50% APY on a 60-month certificate.

👉 Learn more about this offer

USAlliance Financial – 11-Month, 4.00% APY

USAlliance Financial is a not-for-profit financial institution providing a full range of banking services. Since it is a credit union, customers have access to over 6,000 branch facilities and 30,000 surcharge-free ATMs across the US.

USAlliance currently offers their 11-month No Penalty CD, paying 4.00% APY, with a minimum balance requirement of $500.

The credit union has other CDs, ranging from three months to as long as 60 months. Current yields range from 3.75% on the 12-month term CD to as high as 4.50% on the 24-month term CD.

USAlliance also offers its High Dividend Savings account, paying 3.50% APY with a minimum balance of $500, and several money market accounts. The credit union also provides personal loans, credit cards, credit builder loans, auto loans, signature loans, and home loans. 

Ally Bank – 11-Month, 3.85% APY

Ally Bank offers has an 11-Month No Penalty Certificate of Deposit. The CD pays 3.85% APY, with no minimum deposit required to open a certificate. You can withdraw your entire balance, including interest, after the first six days of funding the CD.

Just as important, Ally Bank offers their Ten Day Best Rate Guarantee. You’ll get a better rate if rates rise within ten days of opening your CD.

Ally Bank offers interest checking, online savings, a money market, and their high-yield CD. But perhaps the most exciting CD product is their Raise Your Rate CD. They offer it in terms of two years and four years, but you’ll have an opportunity to raise the rate once during the two-year term or twice during the four-year term. 

Ally is also a fully diversified financial firm, offering mortgages, personal loans, and some of the best auto loans in the business. But you can also benefit from self-directed or managed investments through Ally Invest.

Citi – 12-Month, 3.40% APY

Citi offers their no-penalty CD for a full 12 months. The certificate currently pays 3.40% APY, and the minimum initial investment is just $500.

Citi is one of the largest banks in the US and provides full-service banking, including a full range of loan products and deposit accounts. 

Their fixed-rate CDs have terms ranging between three months and five years. Rates vary based on maturities, but the best deal is on the 12-month CD, which currently pays 4.15% APY on all balance ranges.

Citi also offers their Accelerate Savings account, currently paying 3.40% APY, and is available as long as you open a Citi checking account.

Synchrony Bank – 11-Month, 3.50% APY

Synchrony Bank might have the widest selection of high-yield CDs in the banking industry. Their 11-Month, No-Penalty CD is currently paying 3.50% APY with no minimum deposit required and no maintenance fees. You can withdraw funds without penalty after the first six days following funding your certificate.

Synchrony Bank’s CDs range from 3 to 36 months and pay interest of up to 4.30% APY. Their Bump-Up CD has a 24-month term, no minimum balance, and yields a bit less. It provides one-time flexibility to request a higher rate during the term.

Synchrony Bank also offers High-Yield savings, money market, IRAs, and credit cards.

Marcus by Goldman Sachs – 13-month, 3.85% APY

Marcus by Goldman Sachs offers their 13-month No-Penalty CD, currently paying 3.85% APY. The minimum deposit is $500, and there is no early withdrawal penalty beginning seven days after funding your certificate.

The No-Penalty CD is available in shorter durations but at lower rates. For example, the 7-month CD currently pays 0.45% APY, while the 11-month CD pays 0.35% APY.

Marcus by Goldman Sachs is another well-diversified financial service provider. Their Online Savings Account currently pays 3.30% APY, while they also offer a High-Yield CD paying 4.40% APY for a 12-month term.

Marcus by Goldman Sachs also offers self-directed and managed investment accounts, IRAs, credit cards, and personal and home improvement loans.

Important Facts about No Penalty CDs

Before you open a no penalty CD from a bank, it’s important to know these details about them before you open an account:

  • Withdrawal terms – Each CD’s withdrawal terms are different. Some CDs will let you withdraw some of your balance without closing the entire CD. Others will only allow you to withdraw the whole balance – know the difference.
  • Minimum deposit – Many online banks will let you open a CD with just $1 but some will require at least $1,000. This is important because you can open multiple CDs at a single bank – so if the minimum is low, you can open multiple no penalty CDs at once.
  • Maximum deposit – Some CDs have a maximum deposit amount because they want to limit how much you can earn at the higher interest rate. This is rarer but still possible.

These features are important because let’s say you have a bank that offers a no penalty CD where you can only withdrawal the entire balance. If the minimum is low, say $1, then you could divided your savings across several no penalty CDs.

Then, if you need access to your money, you simply withdraw from one CD and leave the rest.

For example, you have $5,000 you want to put in a no penalty CD. Split it up into five separate $1,000 CDs. If you need your cash, just close one and get access to your $1,000 while the remaining $4,000 accrue interest.

No Penalty CD Frequently Asked Questions

What exactly is the cost of the early withdrawal penalties on CDs?

The fee structure varies somewhat from bank to bank, but most use a tiered rates structure. That means how much you will pay for the penalty will depend on when you make a withdrawal against the CD.

For example, a typical arrangement is to charge a penalty equal to 90 days of interest on a CD with a term of one year or less. The bank may charge a penalty equal to 180 days’ interest on a CD with a term greater than one year.

Are no penalty CDs worth buying?

There is no definitive answer to this question because it depends on the future direction of interest rates. If you are pretty certain rates have peaked, you’ll be better off with a regular-term CD. The rate will be higher than on a no-penalty CD, and you’ll want to lock in that rate for as long as possible.

But a no-penalty CD is the better choice if there’s a reasonable chance you’ll be liquidating the certificate early. That might be the case in a rising-rate environment, where you may want to cash in the CD to free up the funds for a higher-paying CD in the future.

Do no penalty CDs have FDIC insurance?

Yes. Like other CDs and bank deposit products, FDIC insurance covers no-penalty CDs. That will protect your savings for up to $250,000 in total funds per financial institution, per depositor.

Are partial liquidations of a no-penalty CD subject to the early withdrawal penalty?

That depends on the terms of the CD and the bank issuing it. Many permit only a one-time penalty-free withdrawal, while others may accommodate partial liquidations. You should check with the issuing institution to ensure this is the case.

Final Thoughts on No Penalty CDs

There you have it, our list of the best no-penalty CD rates. Your number one consideration for purchasing a no-penalty CD should be liquidity. If there’s a possibility that you may require access to your funds before the maturity date, you’ll appreciate the peace of mind and flexibility no-penalty CDs offer.

I don’t recommend buying a cashable CD for the sole purpose of re-investing if rates increase. As with the stock market, no one can predict when interest rates will rise or how high. If you’re ready to buy a no-penalty CD, there’s no better time than the present.

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About Jim Wang

Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard's Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.

Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology - Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.

One of his favorite tools (here's my treasure chest of tools,, everything I use) is Personal Capital, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you're on track to retire when you want. It's free.

He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a few commercial properties and farms in Illinois, Louisiana, and California through AcreTrader.

Recently, he's invested in a few pieces of art on Masterworks too.

>> Read more articles by Jim

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

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  1. Thomas W says

    Kevin:
    Thanks for the info – my question is about savebetter? How sure are you in this company? How much do you trust it? If my money is pooled with everyone else how protected would I be in the event the company goes chapter 11? I recently was burned by celsius crypto earn…

    • Jim Wang says

      Thomas – fantastic question – your money is pooled but it’s in an account at the bank. It’s similar to how fintech companies do it now, like what SoFi did before they became a bank and what Betterment and others do. Your account is with SaveBetter but the funds themselves are FDIC insured with the bank.

      It’s completely different than crypto, which is never FDIC insured and no one thinks is FDIC insured (so it’s not a case of misunderstanding).

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