If you request an early withdrawal before your CD matures, you will incur a penalty. The proportion of the penalty will depend on the withdrawal time relative to the maturity date. Though the penalty varies depending on the terms, most institutions calculate it from the interest the CD will make till maturity. Meaning, if you withdraw early, you’ll receive a higher penalty. The vice versa holds. Also, shorter-term CDs attract a lower penalty compared to longer-term CDs. Besides, a big penalty could eat into your principal amount. You can still opt into a no-penalty CD that does not eat into your principal, but has a low APY.