No Penalty CD

No Penalty CD Meaning:
A no penalty CD or NP CD is a certificate of deposit product offered by banks and credit unions that allows you to withdraw all your money deposited at any time after an agreed period of time that you have funded the acount. This type of product allows you to keep interest earned without penalty

While a bank can offer a no penalty CD product that allows you to keep the principal and interest after a set period, it will likely result in lower interest than its highest CD yield offering. Some banks for example allow you to obtain the no penalty benefit after the first six or seven days after funding the deposit.