The 5 best no-penalty CDs to open right now

There's no question that now is a great time for savers to reap the benefits of the high-rate environment. After all, the recent rate hikes by the Federal Reserve haven't just led to higher borrowing costs; they've also led many banks and financial institutions to offer hefty rates on deposit accounts, like certificates of deposit (CDs) and high-yield savings accounts.

By taking advantage of what those types of accounts offer currently, savers can rake in the returns on the money in their savings. And, opting for a CD over a high-yield savings account can be a particularly smart move, as this type of account lets you lock in the interest rate for the full CD term. That's not possible with high-yield savings accounts due to the variable nature of their interest rates.

But the potential downside to a CD is that you're agreeing to leave your money in the account until it reaches maturity. Otherwise, you'll typically pay a hefty penalty for early withdrawal. That said, you certainly don't have to. No-penalty CD options let you take advantage of today's high rates while having the option to access your funds when you need to — without paying a fee for doing so. If that interests you, there are some top no-penalty CD options to consider.

Find out more about the CD rates you can get today here.

The 5 best no-penalty CDs to open right now

If you're concerned about paying a penalty for early withdrawal but still want to earn a high rate on a CD, these options may be worth considering:

• America First Credit Union 12-month CD — 5.00% APY: The 12-month CD from America First Credit Union allows account holders to make one penalty-free withdrawal during the first five calendar days of each quarter, making it a solid option to consider if you think you'll need access to your money before the CD matures. It also comes with a very competitive APY of 5.00% and a low minimum opening deposit requirement of $500.
• CIT Bank 11-month CD — 4.90% APY: CIT Bank's 11-month CD comes with an APY of 4.90%, a low minimum opening deposit requirement of $1,000 and has no penalty for early withdrawal, making it a solid option to consider for most savers.  
• Marcus by Goldman Sachs 13-month CD — 4.60% APY: The 13-month CD from Marcus by Goldman Sachs offers a 4.60% APY, a minimum opening deposit requirement of $500 and there is no penalty for early withdrawal. The low opening requirement, coupled with the high rate and no penalty, makes it a choice worth weighing for nearly every type of saver.
• Ally Bank 11-month CD — 4.55% APY: The 11-month no-penalty CD from Ally Bank offers a 4.55% APY and has a $0 minimum opening deposit requirement. That makes it accessible to nearly anyone who wants to open a CD, and it has no early withdrawal penalty to contend with, either.
• Synchrony Bank 11-month CD — 4.50% APY: The 11-month no-penalty CD from Synchrony Bank comes with a competitive APY of 4.50% and there is no minimum opening deposit requirement. That low barrier to entry makes it worth considering for many savers, as does the lack of early withdrawal penalty for those who need to access their money before the CD has matured.

Don't miss out. Explore the top CD rates available to you here.

The benefits of opening a no-penalty CD

Not sure a no-penalty CD is the right move for you? Here are a few of the benefits to consider with this type of account: 

• Liquidity: A no-penalty CD provides liquidity. While most traditional CDs charge substantial penalties for early withdrawals from the account, a no-penalty CD lets you withdraw your funds before the maturity date without incurring penalties. This feature can be particularly attractive in case of a financial emergency or unforeseen need.
• Interest earnings: In general, the interest rates on no-penalty CDs are often lower than those offered with traditional CDs. However, these types of CDs still offer a higher yield compared to regular savings accounts — and right now, most no-penalty CDs offer very competitive rates. 
• Safety and security: As with other types of CDs, no-penalty CDs are typically safe, low-risk investments. They are insured by the FDIC or NCUA up to the maximum limit of $250,000 per depositor, per account, providing a level of security for your deposited funds.
• Flexible terms: No-penalty CDs often have shorter terms than traditional CDs, offering flexibility to investors who may not want to commit their funds for an extended period. This can be helpful if you expect changes in your financial situation or if you are unsure about locking your money into a long-term investment.
• No market risk: Unlike investment options that are tied to the stock market or other financial markets, CDs, including no-penalty CDs, are not impacted by stock market fluctuations. This makes them a more stable choice when you're seeking to preserve capital.

The bottom line

A no-penalty CD can be a smart compromise between the high rates you can earn with a traditional CD and the flexibility offered by a high-yield savings account. That said, it's essential to carefully review the terms and conditions of any no-penalty CD offer, including the specific withdrawal rules and interest rate details, before opening one. You should also be sure to compare rates and features across different financial institutions to help you find the best option for your financial goals and needs.