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Editor’s note, March 23, 2020: Many banks and credit unions are temporarily waiving early withdrawal penalties for CDs in response to widespread financial distress caused by the coronavirus situation. To find out if your bank or credit union is one of them, call its customer service line.
Certificates of deposit, unlike regular savings accounts, keep your funds under lock and key for a specified term. And banks give a good incentive not to tinker with the lock: Withdrawing before the CD term's end generally costs you.
What is an early withdrawal penalty?
A CD's early withdrawal penalty is trickier to figure out than other bank fees because you're not typically looking at a fixed dollar amount or percentage. Instead, the penalty is interest the CD earned (or would have earned) over a number of days or months.
This penalty varies by bank and even by the term of a CD at the same bank. A five-year CD might have a higher penalty than a one-year CD. And, if you withdraw early enough, a penalty might include part of the money you put in, meaning you can lose money on a CD.
See what an early withdrawal can cost using our calculator, with help from a list of penalties at some banks and credit unions below.
» Withdrawing early to find a better CD rate? See the best CD rates for this month
No-penalty CDs: the big exception
Early withdrawal penalties are standard, but some CDs let you withdraw virtually at any time for free. These no-penalty CDs don't have the highest rates, but you can find yields comparable to high-yield savings accounts. (Check out NerdWallet's best savings accounts.)
No-penalty CDs have a big plus over savings accounts: Your rate is locked in. (See more details about the best no-penalty CDs.)
Compare no-penalty CDs at online banks
Here's a look at some 11-month no-penalty CDs:
| Read review | Read review | Read review |
APY0.35% | APY0.30% | APY0.05% |
Minimum Deposit$500 Member FDIC | Minimum Deposit$1,000 Member FDIC | Minimum Deposit$5,000 Member FDIC |
CD early withdrawal penalties
Financial institution | Penalty | |
|---|---|---|
Alliant Credit Union* | For 12-month to 17-month CDs: Up to 90 days of interest For 18-month to 23-month CDs: Up to 120 days* of interest For 2-year to 5-year CDs: Up to 180* days of interest | |
For 3-month to 2-year CDs: 60 days of interest For 3-year CDs: 90 days of interest For 4-year CDs: 120 days of interest For 5-year CDs: 150 days of interest | ||
American Express Bank | For 6-month CDs: 90 days of interest For 1-year to 3-year CDs: 270 days of interest For 4-year CDs: 365 days of interest For 5-year CDs: 540 days of interest | |
Bank5 Connect | For 6-month CDs: 3 months of interest For 1-year to 3-year CDs: 6 months of interest | |
For 1-month to 2-month CDs: All interest or 7 days of interest, whichever is greater For 3-month to 11-month CDs: 90 days of interest For 1-year to 59-month CDs: 180 days of interest For 5-year to 10-year CDs: 365 days of interest | ||
Barclays | For 3-month to 2-year CDs: 90 days of interest For 3-year to 5-year CDs: 180 days of interest | |
For 6-month to 1-year CDs: 3 months of interest For 18-month to 5-year CDs: 6 months of interest | ||
For 1-month to 5-month CDs: 90 days of interest For 6-month to 23-month CDs: 180 days of interest For 2-year to 10-year CDs: 365 days of interest | ||
CIT | For 6-month to 1-year CDs: 3 months of interest For 13-month to 3-year CDs: 6 months of interest For 3-year to 5-year CDs: 12 months of interest | |
Citibank | For 3-month to 1-year CDs: 90 days of interest For 1-year to 3-year CDs: 6 months of interest For 3-year to 5-year CDs: 180 days of interest | |
Citizens Access | For 6-month to 1-year CDs: 90 days of interest For 18-month to 5-year CDs: 180 days of interest | |
Connexus Credit Union | For 1-year CDs: 90 days of interest (also called dividends) For 2-year to 3-year CDs: 180 days of interest For 5-year CDs: 365 days of interest | |
For 3-month to 9-month CDs: 3 months of interest For 1-year to 3-year CDs: 6 months of interest For 4-year CDs: 9 months of interest For 5-year CDs: 18 months of interest For 7-year to 10-year CDs: 24 months of interest | ||
For 6-month to 9-month CDs: 90 days of interest For 1-year to 5-year CDs: 270 days of interest For 6-year CDs: 1 year of interest | ||
Navy Federal Credit Union* | For 3-month to 1-year CDs: Up to 90 days of interest (also called dividends) For 1-year to 5-year CDs: Up to 180 days of interest For 6-year to 7-year CDs: Up to 1 year of interest | |
Pentagon Federal Credit Union** | For 6-month CDs: Most recent 90 days of interest (also called dividends) For 1-year to 7-year CDs: If withdrawn before the first year ends, the penalty is one year of expected interest. If withdrawn after the first year, the penalty is 30% of total expected interest for the full term of the CD | |
Popular Direct | For 3-month CDs: 89 days of interest For 6-month CDs: 120 days of interest For 1-year to 2-year CDs: 270 days of interest For 3-year to 4-year CDs: 1 year of interest For 5-year CDs: 730 days of interest | |
PurePoint | For all CDs: 181 days of interest | |
Synchrony | For 3-month to 1-year CDs: 90 days of interest For 13-month to 3-year CDs: 180 days of interest For 4-year to 5-year CDs: 1 year of interest | |
TIAA Bank | For 3-month CDs: 22 days of interest For 6-month CDs: 45 days of interest For 9-month CDs: 68 days of interest For 1-year CDs: 91 days of interest For 18-month CDs: 136 days of interest For 2-year CDs: 182 days of interest For 30-month CDs: 228 days of interest For 3-year CDs: 273 days of interest For 4-year CDs: 1 year of interest For 5-year CDs: 456 days of interest | |
For 3-month to 1-year CDs: 3 months of interest For 2-year CDs: 6 months of interest For CDs longer than 2 years: 1 year of interest | ||
Calculator assumptions
The CD early withdrawal penalty calculator assumes three things:
The penalty is in terms of simple interest. This means that the penalty doesn’t factor in compounding, which aligns with how many banks compute a penalty.
CD interest, outside the penalty, is compounded daily, which is typical for online high-yield CDs. If your CD is compounded monthly, results may differ slightly. For example, the result may be off by several dollars for six-figure deposits.
There are no partial withdrawals for CDs. Although some banks allow this, many don’t, so our calculator follows suit. If your bank lets you withdraw part of your CD early, the penalty tends to be for the withdrawn amount instead of the full CD balance at the time of withdrawal.
