Dedicated to Deposits: Deals, Data, and Discussion
DETAILSINSTITUTIONAPYMINMAXPRODUCT
Pentagon Federal Credit Union1.51%$1k-5 Year Money Market Cerificate
Pentagon Federal Credit Union1.51%$1k-7 Year Money Market Cerificate
Pentagon Federal Credit Union1.26%$1k-4 Year Money Market Cerificate
Pentagon Federal Credit Union1.00%$1k-3 Year Money Market Cerificate
Pentagon Federal Credit Union0.90%$1k-2 Year Money Market Cerificate
Pentagon Federal Credit Union0.80%$1k-1 Year Money Market Cerificate
Accounts mentioned in this post. Rates as of April 17, 2014

CD Rates Drop at PenFed, But They Remain Competitive

POSTED ON BY

Pentagon Federal Credit Union
Pentagon Federal Credit Union typically makes rate changes on its CDs at the start of each month. Unfortunately, those changes were rate cuts for March. Below is the list the new PenFed CD rates for terms of 1 to 7 years. I've also listed the old rates in parentheses. These new rates are listed in PenFed's Money Market Certificates page as of 3/2/2012.

  • 2.50% APY 7-year CD (was 2.76%)
  • 2.00% APY 5-year CD (was 2.25%)
  • 1.74% APY 4-year CD (was 2.00%)
  • 1.25% APY 3-year CD (was 1.50%)
  • 0.99% APY 2-year CD (was 1.25%)
  • 0.90% APY 1-year CD (was 1.16%)

PenFed calls their CDs "Money Market Certificates", but they are essentially certificates of deposit (CD) with fixed rates for specific terms.

Minimum deposit is $1,000. The rates are also available in an IRA. Even though PenFed typically maintains CD rates through the month, they no longer guarantee it. For more details about PenFed CDs, please refer to my PenFed CD review.

There's one thing that happened last year that has made PenFed's 5-year CD less competitive. Its 5-year CD early withdrawal penalty now matches the 7-year EWP: up to 365 days of interest. Note, the penalty doesn't eat into the principal so if you redeem the CD before 365 days from the issue date, you'll just lose all of the accrued interest. Please refer to PenFed's disclosure.

It should be noted that PenFed did the honorable thing in how it changed the EWP. The change applied only to new CDs or CDs that were rolled over. It did not apply to existing CDs. As we know, not all credit unions have done this.

PenFed Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (one-time $20 fee) or by joining the Voices for America's Troops (one-time $15 fee). Joining one of these organizations and joining PenFed can be done at the same time all online. Please refer to PenFed's How to Join Overview Page for details.

Branch Locations

Accounts can be opened online, but for those who prefer opening accounts in an office, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

Financial/NCUA Info

PenFed is the third largest credit union in the nation. It has $12 billion in deposits. PenFed has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 5.04% (excellent) based on September 2011 data. Please refer to our financial overview of Pentagon Federal Credit Union for more details. It's federally insured by the NCUA (Charter # 227).

How These CD Rates Compare

Navy Federal Credit Union kept its CD rates unchanged for March (at least as of this morning). Its 7-year CD for a $20K minimum deposit continues to have a 2.80% APY. Its 5-year CD rate is 2.30% APY for a $100K minimum and 2.20% APY for a $20K minimum. Navy Federal also has some special 3.00% CDs, but these have small maximum deposits. Unlike PenFed, not everyone can qualify for Navy Federal membership. Please refer to my last Navy Federal CD review for more details.

PenFed's 7-year CD rate is now very close to Discover Bank's 10-year CD rate of 2.45% APY (2.50% APY for AAA members). One advantage of Discover Bank is a smaller early withdrawal penalty (see review).

The best 5-year CD rate that's nationally available continues to be 2.27% APY at Melrose Credit Union.

Searching for the Best CD Rates

To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com:

  Tags: New York, North Carolina, Hawaii, Texas, Virginia, Pentagon Federal Credit Union, Colorado, CD rates, Maryland, Missouri, New Jersey, IRA rates

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Comments
16 comments.
Comment #1 by Anonymous posted on
Anonymous
Not happy that PENFED dropped the Charge Card rewards to .25% on everything and just 5% on gas.  Just got a card from BOA that is 3% gas, 2% supermarket and 1% on everything else. So will use my Penfed card just for gas now.

2
Comment #2 by bwk1954 posted on
bwk1954
#1:  Beware of the BOA card, it is not as great as it sounds.  BOA is very particular about what it codes as "gas" stations and supermarkets. 

2
Comment #3 by Anonymous posted on
Anonymous
I do go to a Supermarket that gets me the 2%.  The gas I will still use Penfed and get 5%.  I get 1% on everything.  1% is still better than .25%. BOA also gave me $50 incentive to get the card.

1
Comment #4 by Apache (anonymous) posted on
Apache
So glad to say I got in on the 7 year CD rate before it changed!  One just can't playing the waiting game when you see a decent (for this economy) rate.  Thanks Ken for making the PenFed CD available on your list!  Keep them coming!!

6
Comment #5 by Anonymous posted on
Anonymous
The 10 year 5% rate I got a while ago looks better and better :)

6
Comment #6 by Anonymous posted on
Anonymous
Their credit card approval process is a joke.  They must think that everybody out there is trying to **** them over.  Don't they go through the big three credit rating agencies to check a person's credit history. 

3
Comment #7 by Kevin (anonymous) posted on
Kevin
PenFed recently changes their credit card program and the Platinum Cash Rewards card can be converted free to the new progam called Platinum Rewards which pays 5% on gas. 3% on groceries and 1% elsewhere.  The difference is you don't earn a cash credit to your statement.  You earn points which can be converted to cash by buying a Visa prepaid card.  Currently they have a $250 bonus for the new card with $50 coming from your first purchase and $200 if you purchase $1,000 or more during the first 3 months.  You should check it out.

3
Comment #8 by Anonymous posted on
Anonymous
PenFed is wonderful in terms of their excellent customer service.  They certainly did hold onto the higher CD rates as long as possible.  I can't expect them to continue offering higher than market rates in our current environment.

4
Comment #9 by Anonymous posted on
Anonymous
The new Pen Fed Platinum Rewards Cards has several things that you should be aware of.  There is a "inactivity fee" on the awards cards if you don't use them in 12 months after issue.  Also, the points have a 5 year expiration policy after they are accrued and not used.  So, if you are close to being able to qualify for a gift card after having accrued the points more than 5 years ago, those points disappear off your account.  People with sporadic charging patterns may lose points if they don't garner enough points to use them within a 5 year period.

5
Comment #10 by Anonymous posted on
Anonymous
When you have earned $25 worth of rewards BOA sends the money to my registered money market account.  I do charge between $2000 - $3000 a month on my card and do not carry a balance.  I dislike Visa gift cards or any gift cards.  In some stores they are difficult to use too.  Too bad PenFed ruined a good thing.

2
Comment #11 by Kevin (anonymous) posted on
Kevin
I, too, would prefer cold/hard cash, but life is full of compromise.  I don't feel I will ever have a problem spending a $50 card within 12 months, even a $200 card; but will most likely only generate enought points in the future to purchase the lesser cards.  The five-year expiration is common on many cards and something I have never experienced. Plus, the points are posted to your account the day after the charges are making them immediately spendable so that will help just a bit to avoid a rare expiration.

Beauty is always in the eye of the beholder.  While the BOA card originally appealed to me, I spend more monthly on groceries than I do on gas and I won't mind "the extra work" of the debit cards for the added income.  Besides, I despise BOA and although I pay my balances off each month, refuse to generate income from the processing fees for them.

To each their own, and I respect each personal preference.  Just thought I would mention the benefits of the "replacement" card and the initial bonus which I earned the first day.  

1
Comment #12 by Anonymous posted on
Anonymous
To #1 -- I got a letter asking me to switch to a new PenFed 1% card, which I did



The PenFed Platinum Rewards Card[/H2] Introducing the new PenFed Platinum Rewards Card. This new Visa card delivers more ways to earn and use rewards than any other PenFed credit card†:

[/H2]

Enjoy Every Day Rewards[/H2][/H2]
  5 points
per dollar spent on gas purchases*
  3 points
per dollar spent on supermarket purchases*
  1 point
per dollar spent on all other purchases

The points you earn can easily be redeemed online for merchandise, travel, gift cards, or even Visa prepaid cards - which can be used like cash anywhere Visa is accepted

https://www.penfed.org/productsAndRates/creditCards/platinumrewards.asp

 [/H2]


1
Comment #13 by Anonymous posted on
Anonymous
I have a bunch of giftcards or cashcards with a few dollars on them.  I just find them to be a hassle to say the least.  I'll take the $50 cash bonus and automatic credits to my Money Market account.  I'm  no fan if BOA but PENFED pushed me to it.  I'll use the PENFED for gas purchases as I still get 5% on that. Again .. to each their own preference.

1
Comment #14 by Anonymous posted on
Anonymous
Also how many "points" does it take to earn a gift card?  "Points" may not  = actual $$

1
Comment #15 by Anonymous posted on
Anonymous
I took a look and you need 5000 points to earn a $50 giftcard.  They give you 5000 points on 1st purchase and then 20,000 if you charge $1000 in 3 months.   So the start looks good but after that ..

1
Comment #16 by pc95 (anonymous) posted on
pc95
I too received the PenFed letter, and in response, now only use the Penfed Plat for gas.  I was happy to order a Capital One Cash Rewards which gave essentially 1.5% on ALL purchases AND a $100 bonus if you reach I think it was $1000 balance in the first 3 months.  I've been very happy with this Capital One.  They give the options of having a check mail to you, crediting against your balance (what I always do), and gift cards.

1