- I recently heard that under federal law, you are allowed to withdraw the interest from your CD at any time without penalty. Only if you withdraw the prinicipal is the bank allowed to charge you a penalty. Can anyone confirm or refute?I've seen banks which do not allow you to withdraw interest. Some examples:http://www.homefederal.com/homefederal/tis_28mo.htmlhttp://netbank.com/terms_truthinsavings.htm#5
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