Savings

Best No-Penalty CD Rates on SaveBetter in November 2022

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Benefits of a No-Penalty CD Account

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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

No-Penalty CDs
Rates are higher for longer term lengths, and generally exceed what high-yield savings accounts offer

VS

Fixed-Term CDs
Rates are higher for longer term lengths, and typically are more competitive than no-penalty CDs of the similar term length
No-Penalty CDs
Closing the account early is permitted without penalty. Earnings may be affected by early withdrawal. Partial withdrawals of funds are not permitted

VS

Fixed-Term CDs
Closing the account early may not be permitted, or may incur a penalty fee. Partial withdrawals of funds are not permitted
No-Penalty CDs
A one-time deposit opens the account. No deposits permitted thereafter

VS

Fixed-Term CDs
A one-time deposit opens the account. No deposits permitted thereafter
No-Penalty CDs
Rate is fixed for the duration of the account’s term

VS

Fixed-Term CDs
Rate is fixed for the duration of the account’s term

Tips for Using No-Penalty CDs

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Investing your money well is crucial for long-term financial well-being. No-penalty CDs are a mechanism through which you can earn a competitive return on your cash savings compared to termless deposit products (e.g., a savings account) while still being able to access your funds without any penalty.

No-penalty CDs can provide your savings portfolio with flexibility when the interest rate environment is expected to change. You are typically securing what is a highly competitive rate for the present moment when you acquire a no-penalty CD, so if the prevailing interest rate trend goes on to decline thereafter, you’ve managed to lock in a return that outperforms the market environment. However, if rates rise sharply after you purchase no-penalty CDs, you have the option to withdraw and reinvest your funds.

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. You also cannot make incremental, top-up 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:

Interest rate

Liquidity and yield.

No-penalty CDs provide more liquidity than traditional CDs while offering a higher rate than many saving accounts.

Security

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.

Deposit

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.

Fees

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.

Withdrawal penalties

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 SaveBetter?

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SaveBetter 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

Safety

Funds deposited into any of the savings products available through SaveBetter 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

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

Convenience

One account to hold all your deposit products. Simplified statements. Easy access to manage your funds – all through a streamlined digital platform.

How SaveBetter Protects Your Money and Personal Information

Federal Deposit Insurance Corporation

FDIC logo

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 insurance

National Credit Union Administration

NCUA logo

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 insurance

Cybersecurity is a top priority at SaveBetter

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We invest in a variety of technologies to protect our customer’s data, privacy and transactions. These include Multi-Factor authentication, encryption, and Cloudflare advanced internet protection and monitoring. 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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Why SaveBetter Is, Well, Better

With SaveBetter
One secure account guards your personal data and safely allows you to tap into yields from multiple savings products

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With traditional banking
Multiple signups, savings accounts, and products at different institutions each require you to provide sensitive personal information.
With SaveBetter
The platform brings together diverse and competitive federally insured savings products, including CDs with a range of terms, that increase your earnings potential.

VS

With traditional banking
There are fewer product options, possibly limiting your savings potential.
With SaveBetter
Only one account is required. You manage all your chosen savings products through the SaveBetter platform.

VS

With traditional banking
By opening new accounts at multiple institutions, you get more statements, must remember more passwords, and waste time.

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APY means Annual Percentage Yield. APY is accurate as of {todayDate}. Interest rate may change after initial deposit. Minimum opening deposit is $1.00.

Each customer authorizes the Custodian Bank to hold the customer’s funds in a custodial capacity in order to facilitate the customer’s deposits to and withdrawals from deposit accounts at various Product Banks that the customer requests through SaveBetter.com. The Custodian Bank does not establish the terms of the deposit accounts, or offer the deposit accounts to customers, and provides no advice to customers about deposit accounts. Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank. Custodian services are provided by Lewis & Clark Bank, Member FDIC.