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 Virtually all certificates of deposit are required to charge penalties if the money is withdrawn within a very short period following deposit (e.g., 7 days). No-penalty certificates of deposit may be, in fact, money-market accounts advertised as no-penalty certificates of deposit.

No-penalty certificates of deposit are also known as liquid certificates of deposit.