Lock In Penalty-Free CD Rates of 4.00% or More With These 5 Banks Right Now

Certificate of deposit (CD) rates have been sky high these last few months, and though they're starting to drop, there are still plenty of great options available. The trouble is that most lock your money away for months or even years. And if you need to withdraw your cash unexpectedly, you'll pay an early withdrawal penalty.

However, there is one type of CD that bucks this trend and still offers competitive rates. Here's what you need to know about them and where you can find them now.

What is a no-penalty CD?

A no-penalty CD is a CD that doesn't charge early withdrawal penalties. It permits you to take your money out even before the maturity date without charges. But there are some caveats.

First, you generally can't withdraw your cash within the first week or so after opening the CD. But that's a much shorter lockup period than traditional CDs have.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Second, when you withdraw no-penalty CD funds, you usually have to withdraw all of the cash at once. You cannot take out just a portion of the cash. And while there may not be penalties, you will still miss out on the opportunity to earn interest for the remainder of the CD's term.

Finally, because traditional CDs lock your money away for longer than no-penalty CDs, they generally offer higher interest rates. However, it's still possible to find some great deals on no-penalty CDs.

Five banks offering no-penalty CDs with APYs of 4.00% or higher

Here are five banks offering competitive no-penalty CDs right now.

All CD rates listed here are accurate as of July 17, 2024.

1. Marcus by Goldman Sachs (4.70% APY)

The Marcus by Goldman Sachs no-penalty CD comes with a choice of a seven-, 11-, and 13-month term and a 4.70% APY. It has a $500 minimum deposit requirement. This is pretty reasonable, though there are CDs out there that don't have any minimum deposit requirement.

2. Ally Bank (4.00% APY)

Ally Bank has a single no-penalty CD with an 11-month term. Its APY is a little lower than Marcus', but it has no minimum deposit requirement. This could make it a better choice for those with smaller sums to deposit.

If you choose to renew your no-penalty CD after the term is up, you'll earn a 0.05% APY Loyalty Reward above and beyond the current Ally no-penalty CD rate at the time.

3. Bank of America (4.50% APY)

Bank of America's no-penalty CD is known as its Flexible CD. It has a 12-month term and a 4.50% APY. Its minimum deposit is $1,000, which is higher than the other options listed here. But it could still be a viable option for those looking to deposit larger sums.

4. Climate First Bank (up to 5.34% APY)

Climate First Bank has two no-penalty CDs. Its 12-month CD has a 5.00% APY and its 6-month CD has a 5.34% APY. Both have $500 minimum deposit requirements. The bank also has a unique flex CD account that enables customers to make additional deposits to the CD over time.

5. America First Credit Union (4.90% APY)

The America First Credit Union Flexible Certificate has a 4.90% APY and a 12-month term. It has a minimum deposit of $500 and permits additional deposits of up to $10,000 per month (max $100,000 in any Flexible Certificate account). But rather than being able to withdraw your money whenever you want, you're limited to one penalty-free withdrawal per quarter.

The above CDs can be a great compromise if you want to lock in a high rate on your cash but still want the option to tap your savings if you need to. But if you're really confident that you won't need the money in the next year or two, you might have better luck with a traditional CD. And if you want to keep your money really accessible, a high-yield savings account is a better bet. It won't guarantee your rate, but it also won't limit you from withdrawing your funds when you need to.