What's a 'No-Penalty' CD?

Great Rate. No Early Withdrawal Penalty. Open Yours at Ally Bank Today.

September 2012

With a traditional certificate of deposit (CD), you deposit a certain amount for a fixed amount of time, anywhere from a few days to a few years. Assuming you don't make a withdrawal before it matures, you get your money back at the end of that time period, along with the interest it has earned. However, if you take your money out before that time period is up — that is, before the CD matures — you often will have to pay an early withdrawal penalty.

With a "no-penalty" CD, on the other hand, that may not be the case, depending on when you make the withdrawal. "This type of CD allows you to withdraw funds prior to its maturity date and not incur the penalty for early withdrawal," Andy Tilp, president of Trillium Valley Financial Planning in Sherwood, Oregon, told Ally Bank. It should be noted, however, that there is a waiting period of six days after funding the account to avoid a penalty, as required by law.

An advantage of the no-penalty CD: You can easily access your money in case of an emergency.

A no-penalty CD provides the same security and predictability found in traditional CDs in that you know ahead of time precisely what you will earn at maturity.

With Ally Bank's No Penalty 11-Month CD, you get a rate that's among the most competitive in the country based on the rates published at Bankrate.com. And, if you decide to withdraw all of your money, you can do so anytime after the first six days following the date you fund your account, with no penalties, and keep all the interest earned. Plus, each Ally Bank depositor is FDIC-insured to the maximum amount allowed by law.

Learn more and open yours at Allybank.com or call live customer care at 877-247-ALLY (2559) (available 24/7).

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