July 2023 No-Penalty CDs (Up to 5.25%)

July 2023 No-Penalty CDs (Up to 5.25%)

The Best No-Penalty CDs: A Comprehensive Guide


Our experts at Personal Finance Insider are here to answer all your banking questions and provide unbiased product reviews. When it comes to Certificates of Deposit (CDs), we understand that early withdrawal penalties can be a hassle. To help you find the best options, we have compiled a list of no-penalty CDs that offer competitive rates and flexible terms.

The Benefits of No-Penalty CDs

Most CDs charge a fee if you need to withdraw money before the term ends. However, with a no-penalty CD, you can avoid these early withdrawal penalties. While these types of CDs are not very common, there are a few strong banks that offer them.

The best no-penalty CD rate currently available is an impressive 5.25% APY on a 9-month Blue Federal Credit Union No Penalty CD, powered by Raisin. If you’re open to considering other banks that charge penalties, be sure to check out our overall best CD rates guide.

These top picks for no-penalty CDs have low minimum opening deposits, competitive interest rates, and a variety of term options. Here are some of our top recommendations:

Bank Term Length APY
Blue Federal Credit Union 9 months 5.25%
mph.bank 6 months 5.20%
Mission Valley Bank 3 months 5.18%
USAlliance Financial 11 months 5.00%
America First Credit Union Flexible Certificate 5.00%
CIT Bank No Penalty 11-Month CD 4.90%
Ally No Penalty CD 4.55%
Marcus 13 Month No-Penalty CD 4.35%
Synchrony No-Penalty CD 4.25%

Please note that our top picks for CDs are protected by FDIC or NCUA insurance, ensuring the safety of your deposits.

Expert Advice on Choosing the Best No-Penalty CD

To help you make a well-informed decision when choosing a no-penalty CD, we reached out to four experts in the field. Here’s what they had to say:

Tania Brown, a certified financial planner at SaverLife, recommends considering your desired banking experience. If you prefer a local branch, ensure the bank or credit union is FDIC or NCUA insured. On the other hand, if you’re comfortable with an online-only bank, focus on interest rates and account fees.

Sophia Acevedo, a certified educator in personal finance and banking reporter, suggests creating a list of your priorities when it comes to a bank account. Pay attention to monthly service fees and interest rates, ensuring that the account offers a higher interest rate than the average bank account.

Roger Ma, a certified financial planner with lifelaidout® and author, advises considering when you will need the money and comparing it with current CD rates. Think about the financial perspective as well as your own personal timing.

Mykail James, an MBA and certified financial education instructor, emphasizes the importance of having a plan for your funds. If you have a specific goal, such as saving for a down payment on a house, plan the duration of your CD accordingly.

Is a No-Penalty CD Right for You?

According to Sophia Acevedo, you should pay attention to the interest rate offered by a no-penalty CD and compare it with other savings options. If the interest rate is similar to a high-yield savings account or money market account, you might prefer one of the latter since they allow for additional deposits. With a no-penalty CD, you can only deposit money when you open an account or when the term ends.

Why Trust Us: How We Chose the Best No-Penalty CDs

At Personal Finance Insider, our mission is to help smart people make the best decisions with their money. We understand that everyone’s definition of “best” may vary. Therefore, we not only highlight the benefits of a financial product but also outline any limitations.

We spent hours comparing and contrasting the features and fine print of various CDs so that you don’t have to. Our selection process involved reviewing CD offerings from national banks, considering factors such as minimum opening deposits, interest rates, customer support availability, mobile app ratings, and ethics.

Frequently Asked Questions about No-Penalty CDs

To provide a comprehensive guide, we have also compiled a list of frequently asked questions about no-penalty CDs. If you have any concerns or doubts, this section will address them.

Blue Federal Credit Union 9 Month No Penalty CD

This account, powered by Raisin, offers a high interest rate and requires just $1 to open. With a term length of 9 months, you can enjoy an APY of 5.25%. However, note that Raisin does not offer checking accounts, so if you prefer an all-in-one banking experience, you may want to consider other options.

mph.bank 6 Month No Penalty CD

With an APY of 5.20%, this CD from mph.bank, powered by Raisin, is another competitive choice. It requires a minimum deposit and offers a term of 6 months.

Mission Valley Bank 3 Month No Penalty CD

Another option powered by Raisin, this CD from Mission Valley Bank offers a term length of 3 months and an APY of 5.18%. Keep in mind that it is an online-only banking experience.

USAlliance Financial 11 Month No Penalty Certificate

If you are eligible to meet the membership requirements, USAlliance Financial offers a low minimum opening deposit of $500. With an APY of 5.00% and a term length of 11 months, it can be a great option for you.

America First Credit Union Flexible Certificate

America First Credit Union stands out by offering more flexibility with deposits and withdrawals than most banks. You can continue depositing money into your CD after opening it, with a monthly limit of $10,000. With a term length of 12 months and an APY of 5.00%, it is worth considering. However, keep in mind that interest is compounded monthly, which may limit your earnings over time.

CIT Bank No-Penalty 11-Month CD

CIT Bank offers a competitive APY of 4.90% on its 11-month no-penalty CD. While the minimum deposit may be slightly higher than other options, if you already have a relationship with CIT Bank, it can be a valuable choice.

Ally No Penalty CD

For those looking for flexibility, Ally No Penalty CD allows you to open an account with any amount, and it pays a competitive interest rate. With a term length of 11 months and an APY of 4.55%, it offers a good balance of ease and returns. However, if you prefer higher rates, consider Ally’s High Yield CD or Raise Your Rate CD.

Marcus No-Penalty CD

Marcus stands out by offering multiple term options, making it easier to find a CD that matches your needs. The most competitive option is the 13-month term with an APY of 4.35%. However, keep in mind that rates vary depending on the chosen term.

Synchrony No-Penalty CD

Synchrony offers a no-penalty CD with a term length of 11 months and an APY of 4.25%. You can open an account with $0. However, note that you must call Synchrony to cash out your CD.

Bank Trustworthiness and BBB Ratings

When considering a financial institution, it is essential to assess its trustworthiness. The Better Business Bureau (BBB) provides ratings based on customer complaints, honesty in advertising, and transparency. Here are the BBB scores for each institution mentioned:

  • Blue Federal Credit Union: A+ rating
  • mph.bank: A+ rating
  • Mission Valley Bank: A+ rating
  • USAlliance Financial: D- rating (due to unaddressed complaints)
  • America First Credit Union: A rating (with a few unresolved complaints)
  • CIT Bank: A- rating (due to an unaddressed complaint)
  • Ally: A rating (with a few unresolved complaints)
  • Marcus: A+ rating
  • Synchrony: A rating

It is worth noting that while some companies may have lower ratings, your money is safe at a federally insured financial institution. Federally insured accounts offer up to $250,000 per depositor in protection.

Finding the right no-penalty CD can be a great way to grow your savings without worrying about penalties for early withdrawals. By considering our expert advice and reviewing the recommended options, you’ll be well on your way to choosing the best no-penalty CD for your financial goals.