Skip to content
Advertiser Disclosures

Best 1 Year CD Rates with No-Penalty for Early Withdrawal

Finding the Best 1-Year CD Rates can be a challenge if you’re looking for no-penalty certificates of deposit.

The fact that 1-year CD rates can provide a good return on your investment in a short amount of time is negated if it becomes necessary to withdraw early and penalties are incurred.

Early withdrawal penalties for certificates of deposit can range from 1 month up to 6 months of interest.

Typically, stocks offer better returns than CDs over time. But with stocks, you can lose every dollar invested with no recourse. Certificates of deposits make an attractive savings vehicle because you can pretty much predict your earnings and the interest rate is locked-in for the CD erm.

Your money is safe from market risk with 1-year CDs plus you also have the reassurance of FDIC-insured protection.

Best 1-Year CD Rates with No Early Withdrawal Penalty

Here are several online banks that offer the best 1-year cd rates with no penalties for early withdrawal.

1. CIT Bank No-Penalty 11 Month CD (1.40% APY)

With a CIT Bank No-Penalty CD, you get the security of an 11-month CD plus know you can withdraw the total balance and interest earned without penalty. The No-Penalty CD kicks into full effect 7 days after your deposit is made.

Here are the details:

  • A minimum deposit of $1,000.
  • You may withdraw the total balance and interest earned, without penalty, beginning seven days after funds have been received for your CD.
  • No account opening or maintenance fees.
  • Daily compounding interest to maximize your earning potential.
  • FDIC insured.

2. No Penalty Certificate of Deposit CD (1.00% APY)

There’s no minimum deposit required to open your account, and you can withdraw your full balance and interest any time after the first 6 days of funding your CD.

Here are the details:

  • No minimum deposit required.
  • No penalty for early withdrawal.
  • No account opening or maintenance fees.
  • FDIC insured.

3. Marcus by Goldman Sachs 13 Month No-Penalty CD (1.05% APY)

Earn a competitive fixed rate, plus the flexibility to withdraw your full balance if you need it beginning 7 days after funding.

Here are the details:

  • $500 minimum opening deposit.
  • No penalty for early withdrawal.
  • Keep all of the interest earned, even with early withdrawal.
  • FDIC insured.

How Annual Percentage Yield (APY) Works

Annual percentage yield (APY) is the amount of interest you earn on a savings deposit or investment in one year taking into account the effect of compounding interest.

APY includes your interest rate and the frequency of compounding interest, which is the interest you earn on your principal plus the interest on your earnings.

How CD Accounts can help you save money

Once you find the best 1-year cd rates and open an account you’ll learn quickly how cd accounts can help you save more money. You’ll discover that:

  • A 1-Year CD offers a nice incentive to leave your money alone. It’s long enough to generate good interest but not so long you’re tying up money indefinitely.
  • You have the necessary disciple to grow your money. With CD accounts, you just can’t open your banking app and make a quick, free transfer as you could with a regular savings account.
  • CD accounts allow your money to grow because you lack easy access to it.
  • Online banks generally pay higher interest rates compared to your local bank or big national bank. Higher rates equal more growth in savings.
  • If you open a new CD every year, you would be adding exponentially to growing your savings. Once you open a few certificates of deposits consecutively, the earned interest alone would fund new CDs.

What to look for in 1-Year CD Rates

Some of the most important factors to consider when looking for the best 1-year cd rates is:

  • The option of rolling over the CD to another CD for the same term or higher when the CD reaches maturity.
  • A CD early withdrawal penalty could cost you a good chunk of cash that will impact your earnings.
  • If you want liquidity open a No-Penalty CD where there is no fee for early withdrawal.

How CDs can help build credit

Certificates of deposits can help build or strengthen your credit history. Banks that offer secured loans may allow a CD account to be used as collateral. CD-secured personal loans let you retain your investment while you get cash.

Here is how your credit history can improve:

  • The bank reports your monthly payment activity to one or more of the three major credit bureaus (Experian, Equifax, Transunion).
  • By making monthly payments on the CD-secured loan your credit history will improve as long as the payments are timely.
  • Once the loan balance reaches zero, the bank unlocks the CD and returns the total money the borrower paid, minus any interest and administrative fees.

But what if you don’t have the money for a CD-secured loan? Consider the company called Self.


Self is a company that offers credit-builder loans without upfront money. The difference between CD-secured loans at banks and what Self offers is that the amount you borrow doesn’t come to you right away. Instead, Self allows you to make monthly payments on a predetermined loan amount, and those payments are reported to the credit bureaus.

After all payments are made, the money is released to you minus the finance charges (the administrative fee and the interest you are charged).

Here are the details:

  • Loan amounts range from $600 to $1,800.
  • $9 administrative fee; APR varies.
  • No credit check.
  • Reports to all three major credit bureaus.
  • Loan terms from 1 or 2 years.

You’ll have a solid history of 12-months of on-time payments once your credit builder loan is completed.

Ladder 1-year CDs to get higher rates

One-year CD rates are generally lower than longer-term CDs, such as three-year or five-year CDs.

However, if you use an investment strategy termed “CD Ladder” you may be able to get higher rates. Using the CD ladder method simply means you invest funds over a number of CDs with staggering maturity dates. For example:

  • Take small dollar amounts to open multiple CDs with different maturity dates.
  • Open a one-year CD, a two-year CD, and a three-year CD at the same time to build a three-year CD ladder.
  • The CD ladder strategy helps to ensure you get the highest rate offered every time the CD matures.
  • If interest rates increase, you’ll have the cash to open new CDs but if interest rates decrease, you don’t have to worry because you’ll still have money growing in your higher interest rate CD accounts.
  • There’s another plus to the CD ladder strategy, you get to have access to some of your funds without enduring an early withdrawal penalty.

Leave a Reply

Your email address will not be published.