Benefits of a No-Penalty CD Account
No-penalty CDs occupy the middle ground between the liquidity of a high-yield savings account (HYSA) and the steady, locked-in return offered by a fixed-term CD account. (“CD” stands for certificate of deposit, which is the most common term banks use for the product. Comparable savings products offered by credit unions may be called certificates or share certificates.)
Here’s the key benefit: You can secure a competitive rate (usually above what a HYSA offers) for the duration of the term of a no-penalty CD — similar to how a fixed-term CD works — however you won’t face any penalty fees in the event you close the account and withdraw funds prior to the account’s maturity date. The reason doesn’t matter; you could need the cash for an emergency expense, or you may want to move it into a harder-working savings product that became available. With a no-penalty CD, you get predictable earnings on your investment through a set, competitive rate, and you don’t forgo access to your cash. For many savers this is a winning combination.
No-Penalty CDs vs. Fixed-Term CDs
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More About No-Penalty CDs
What is a No-Penalty CD?
Think of a no-penalty CD as a twist on a traditional certificate of deposit. No-penalty CDs are similar to traditional CDs except for one key difference. The terms of a traditional CD often impose limitations or penalties or even full restrictions on withdrawals before the account reaches maturity. When does a CD reach maturity? At the conclusion of its term length following the purchase date.
Like its name suggests, a no-penalty CD does not impose early withdrawal penalties if you need to tap your savings before the term is complete. No-penalty CDs are also sometimes known as liquid CDs, as they offer considerable liquidity by allowing you access to your deposited funds. While no-penalty CDs typically offer lower rates than fixed-term CDs, they still provide a higher rate than most regular savings accounts.
If you do need to access funds invested in a no-penalty CD before the term is over, don’t expect to make a partial withdrawal as that’s typically not allowed; you’ll have to extract its full value, closing the account. However, you won't lose any accrued interest. You also cannot make incremental deposits after the first purchase; this is true of both fixed-term and no-penalty CDs.
Considerations with No-Penalty CDs
No-penalty CDs offer similar advantages as a regular CD while also providing the benefits of a savings account:
Liquidity and yield.
No-penalty CDs provide more liquidity than traditional CDs while offering a higher rate than many saving accounts.
Federal deposit insurance.
CDs and certificates are types of deposit accounts, which means they are eligible for FDIC or NCUA insurance through financial institutions. FDIC insurance (covering banks) and NCUA insurance (covering credit unions) offers government-backed protection on your money, up to $250,000 per depositor, per insured institution. Ensure your funds will be covered by choosing a federally insured account. Visit fdic.gov and ncua.gov for more information.
Better planning.
Increased liquidity gives you more flexibility in your financial planning. For example, in case of an emergency, you always have the option to withdraw funds from your no-penalty CD. Hence, this category of savings product is a potential way to put an emergency fund to work. Additionally, you can use a no-penalty CD to save for a big purchase. If your purchase time is flexible or undetermined, no-penalty CDs are a great mechanism to earn interest while also having access to funds.
Lower yield than comparable fixed-term CDs.
No-penalty CDs may offer a lower annual percentage yield (APY) than traditional CDs, as there is a trade-off between liquidity and yield. Compare rates of different account types before making a decision.
Some limitations on withdrawals.
The terms and conditions for a no-penalty CD may vary from bank to bank. You might have to wait for a fixed amount of time before you can make a withdrawal. And it’s likely that partial withdrawals — meaning some, not all, of the account balance — are not permitted. This is a key distinction between a no-penalty CD and a savings account, which allows for in- and outflows of funds on an ongoing basis.
What Is Raisin?
Raisin brings together high-yielding savings products offered by a network of U.S. financial institutions. It’s your destination to discover competitive savings products and start saving wisely. Select and fund multiple savings products from different institutions and manage them all from one account.
Safety
Funds deposited into any of the savings products available through Raisin are always held by a federally insured financial institution. A very easy and safe way to diversify your deposit portfolio. We use a host of cybersecurity measures to protect your funds and sensitive information.
Choice
Savings products from our network of financial institutions offer flexible terms and some of the most competitive interest rates. You can easily find the right product or mix of products for you.
Convenience
One account to hold all your deposit products. Simplified statements. Easy access to manage your funds – all through a streamlined digital platform.
How Raisin Protects Your Money and Personal Information
Federal Deposit Insurance Corporation
All participating banks are members of the FDIC. Deposits in participating banks are insured by the FDIC up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured bank, for each deposit account ownership category.
Click to learn more about FDIC insuranceNational Credit Union Administration
All participating credit unions are insured by the NCUA through its Share Insurance Fund. Deposits in participating credit unions are insured by the NCUA up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured credit union, for each deposit account ownership category.
Click to learn more about NCUA insuranceCybersecurity is a top priority at Raisin
We invest in a variety of technologies to protect our customer’s data, privacy and transactions. These include multi-factor authentication, encryption, and web application firewall advanced internet protection technologies. We are a SOC 2 certified organization, which means we have met the requirements outlined by the American Institute of Certified Public Accountants (AICPA) to ensure that we have the controls in place to keep customers' data secure and private.
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FAQs
Raisin is a digital platform that gives savers unparalleled access to a variety of deposit products through the convenience of a single account, helping you unlock the growth potential of your cash savings.
Raisin customers use the platform to fund Federal Deposit Insurance Corp. (FDIC) insured deposit products offered by numerous U.S. banks with a wide range of maturities and interest rates, allowing you to build a savings strategy to suit your earning and liquidity needs.
Raisin is not a bank. It’s a New York-based financial technology company (“Fintech” for short) that provides the digital “storefront” where banks can promote their deposit products.
Raisin.com is operated by Raisin LLC, a 100% subsidiary of Deposit Solutions LLC (Deposit Solutions). Headquartered in New York, Deposit Solutions provides a proprietary open architecture platform for deposits products. Deposit Solutions helps banks improve their deposit funding by offering national reach for their retail deposit products, and provides savers with better access, more choice and higher convenience when evaluating savings products from FDIC insured banks.
Deposit Solutions LLC is a 100% subsidiary of Raisin GmbH, a trailblazer for open banking in the deposits and investments space.
Your Raisin account gives you access to savings accounts and Certificates of Deposit (CDs) offered by a variety of banks with the security of FDIC insurance. These products include:
High-yield Savings Account (HYSA). As its name indicates, this account type functions like a traditional savings account—with typically no restrictions on depositing and withdrawing funds—but earns interest at rates that are higher than the national average for standard savings accounts.
Money Market Deposit Account (MMDA). Also known as a money market account or MMA, this type of savings account offers a varying rate that allows you to earn interest on your funds with maximum flexibility for withdrawals. Like a HYSA, an MMDA offers features of a traditional savings account with typically higher returns.
No Penalty CD. Through the flexibility of a No Penalty CD, you can lock in a competitive rate for a fixed term with the option to make a full withdrawal without having to pay a penalty for the early termination. Terms and conditions may vary by product. Please see specific product terms for more details.
Fixed Term CD. With this longstanding savings vehicle, funds are held for a fixed term, and a competitive interest rate provides safe, predictable earnings. In contrast to No Penalty CDs, typically you are charged a fee if you do not complete the full term of the Fixed Term CD.
Interest is compounded daily and posted to your account monthly.
Yes! A depositor’s savings are insured by the FDIC up to the maximum amount in accordance with and as permitted by law at each bank holding their funds.
The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per account ownership category. Ownership categories as defined by the FDIC include single bank accounts (owned by one person/depositor) and joint bank accounts (owned by two or more persons/depositors). Revocable trust accounts and some types of retirement accounts (e.g., IRAs) are among the other ownership categories covered by FDIC insurance.
Deposits held in different ownership categories are separately insured, even if held at the same bank.
All deposits you have at a bank — whether made through Raisin or otherwise — count toward the deposit insurance limit. If funds held at a bank in a certain ownership category exceed the coverage limit, then the amount in excess of the limit will not be insured.
At Raisin, cybersecurity is our priority. Raisin is a SOC 2 certified platform, meaning it has been validated by outside auditors across five (5) key information security principles. We also use a variety of measures to protect our customers' data, privacy and transactions, including:
• User authentication. The Raisin platform uses multi-factor authentication combined with leading authentication technology to validate our customers’ identities.
• Data encryption. Your personal information is encrypted in-transit and at rest using advanced cryptographic security algorithms.
• Site protection. Web application firewall advanced internet protection technologies are implemented to protect Raisin.com from malicious actors, botnets and denial of service attacks (DDOS).
• Monitoring. An always-on information security monitoring platform detects and alerts us to information security events.
• Assessments. Our platform undergoes vigorous security assessments and testing throughout the lifecycle of application development, from architecture planning to production phases.
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A. Check out our savings marketplace and choose a product in which you would like to deposit money.
B. Create your username and password.
C. Complete an application and, after successful identity verification, link a bank account from which to fund your first savings product.
D. Start earning interest as soon as your money is received by the bank.
Any questions or concerns? Email us at support.us@raisin.com.
All deposits and withdrawals are completed within one to three (1-3) business days. After the initial deposit a withdrawals limitation for the first few business days may exist.
Business days are Monday through Friday excluding U.S. bank holidays.
No. All necessary registration is handled when you become a Raisin customer. One of the many benefits of our platform is that you can open a single account and earn competitive interest rates from banks in the Raisin network.
The current APY for your savings products can always be viewed on the Account Overview page when you are logged in to Raisin. This information also appears on monthly statements.
You cannot currently link your Raisin account to a third-party app, but we may offer this feature in the future. For now, you will not be able to link your selected savings product to a third-party app even if the bank offering that product does so outside of the Raisin platform.
Email: support.us@raisin.com
|Call: 844-994-EARN (3276) (Monday to Friday from 9:00 a.m. - 4:00 p.m. ET)
The Raisin name and logo are trademarks of Raisin GmbH. All other trademarks, logos, marks, and brand names are the property of their respective owners — used with permission.
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*APY means Annual Percentage Yield. APY is accurate as of {todayDate}. Interest rate and APY may change after initial deposit. Minimum opening deposit is $1.00.
Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodial Bank to hold the customer’s funds in such accounts, in a custodial capacity, in order to effectuate the customer’s deposits to and withdrawals from the various bank and credit union products that the customer requests through Raisin.com. The Custodial Bank does not establish the terms of the bank or credit union products and provides no advice to customers about bank or credit union products offered through Raisin.com. Central Bank of Kansas City (CBKC), Member FDIC, d.b.a. Central Payments is the Service Bank. CBKC, Lewis & Clark Bank and Starion Bank, each Member FDIC, are the Custodial Banks.