A certificate of deposit (CD) that allows its holder (the depositor) to early withdraw the funds, partially or wholly, before maturity of the CD without the bank charging any penalties. The holder can also deposit funds anytime with no restrictions on movement of funds. Virtually all CDs are required to charge penalties if the money is withdrawn within a very short period following deposit (e.g., 7 days). No-penalty CDs may be, in fact, money-market accounts advertised as no-penalty certificates of deposit.

No-penalty CDs are also known as liquid CDs.