A no-penalty CD (also called a liquid CD) is a certificate of deposit that allows early withdrawal without forfeiting earned interest. As of September 2026, the best no-penalty CD rates range from approximately 3.90% to 4.18% APY — somewhat lower than the top traditional CDs of comparable terms, but with the flexibility to exit early.
Key takeaway: If you’re debating between a CD and a high-yield savings account, a no-penalty CD can be a good middle ground — you get a locked-in rate with the ability to exit if your financial situation changes, at a modest rate discount versus a traditional CD.
Rates shown are as of September 2026, based on CNBC Select’s no-penalty CD survey published this month. Verify the current rate directly with the institution before opening.
No-Penalty CD Rates vs. Traditional CD Rates (September 2026)
| CD Type | Typical Top APY (Sept 2026) | Early Withdrawal Penalty |
|---|---|---|
| 6-month traditional CD | 4.15%–4.30% | 60–90 days of interest (varies by bank) |
| 12-month traditional CD | 4.30%–4.44% | 90–180 days of interest (varies by bank) |
| No-penalty CD (7–13 month) | 3.90%–4.18% | None (after 6–7 days) |
| High-yield savings account | ~4.00%–4.40% (verify current rate) | None |
The rate gap between the best no-penalty CDs and top traditional CDs is typically 0.25–0.40 percentage points as of this survey — modest compensation for the flexibility they give you, though the exact gap varies by institution and changes over time.
How No-Penalty CDs Work
- Open and fund — deposit your money (minimum deposits range from $0 to $1,000 at most online banks)
- Lock in your rate — the APY is fixed for the CD term (typically 7 to 13 months)
- Wait the minimum hold period — usually 6–7 days before you’re allowed to withdraw
- Withdraw anytime after that — principal plus accrued interest, no penalty
- At maturity — the CD typically auto-renews unless you instruct otherwise
Where to Find the Best No-Penalty CD Rates
No-penalty CDs are primarily offered by online banks and credit unions. Brick-and-mortar banks rarely offer them. As of September 2026, issuers to check include:
- Marcus by Goldman Sachs — offers 7-month, 11-month, and 13-month no-penalty CDs; withdrawals allowed 7 days after funding (full balance only)
- CIT Bank — offers a no-penalty CD with daily compounding interest
- Ally Bank — offers a no-penalty CD option
- Climate First Bank and other niche online banks — sometimes lead the no-penalty rate table; verify FDIC insurance status before opening with a less familiar name
Always verify current rates directly with the bank — CD rates change frequently as the Federal Reserve adjusts the federal funds rate. Note that Discover Bank, previously a competitive no-penalty CD issuer, merged into Capital One in May 2025 and no longer accepts new CD applications.
When to Use a No-Penalty CD
No-penalty CD is the right choice when:
- You want to lock in a rate above current HYSA rates
- You’re not 100% certain you won’t need the money before maturity
- You’re saving for a goal 6–15 months away (emergency fund, home down payment, vacation)
- You want to avoid the temptation of easy HYSA withdrawals but still have a safety valve
Stick with a traditional CD when:
- You’re certain you won’t need the money early (emergency fund already separate)
- The rate difference between traditional and no-penalty is significant for your goals
- You want a longer term (most no-penalty CDs top out around 13 months)
Example: You have $20,000 sitting in a HYSA earning 4.00% APY. A 12-month no-penalty CD offers 4.10% APY. Switching captures roughly $20 more in interest over the year (approximately $820 vs. $800) — a marginal improvement with little flexibility sacrificed, since the no-penalty CD can still be broken after the initial hold period.
No-Penalty CD vs. High-Yield Savings Account
| Feature | No-Penalty CD | HYSA |
|---|---|---|
| Rate | Fixed for term | Variable (can change anytime) |
| Flexibility | Withdraw after 6–7 days | Withdraw anytime |
| Rate protection | Yes — locked in | No — can drop |
| Deposit limits | One-time at opening | Deposit anytime |
| FDIC insured | Yes | Yes |
The key advantage of the no-penalty CD over a HYSA: rate protection. If the Fed cuts rates, your HYSA rate falls immediately. Your no-penalty CD rate stays fixed for the term — giving you downside protection in a declining rate environment.
Early Withdrawal: What to Know
No-penalty CDs typically require a minimum holding period of 6–7 days. After that:
- You can withdraw the full balance (principal + accrued interest)
- No penalty is charged
- The account closes (unlike a HYSA where you can make partial withdrawals)
Important: Most no-penalty CDs require full withdrawal — you can’t pull out a portion and leave the rest. If you need partial liquidity, a HYSA may serve you better.
Related Resources
- CD Rates and Guide — all CD types compared
- Best CD Rates — current top rates across all CD types
- High-Yield Savings vs. CD — full comparison
- CD Laddering Strategy — spread risk across multiple CDs
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy