Dedicated to Deposits: Deals, Data, and Discussion
Pentagon Federal Credit Union1.00%$1k-3 Year Money Market Cerificate
Pentagon Federal Credit Union1.00%$1k-4 Year Money Market Cerificate
Accounts mentioned in this post. Rates as of August 1, 2014

PenFed Raises 3-Year and 4-Year CD Rates


Pentagon Federal Credit Union

Pentagon Federal Credit Union (PenFed) CD rates are getting better each month. Last month PenFed raised its 5-year and 7-year CD yields to 2.02%. Today PenFed raised its 3-year and 4-year CD rates to this same 2.02% APY. This is the first nationally available 3-year CD with a yield above 2% that we’ve seen in a long time. Thanks to DA member Shorebreak who posted on this news in the forum. Below is a list of these new CD and IRA CD rates in effect as of November 1, 2013:

  • 2.02% APY 7-year CD (no change)
  • 2.02% APY 5-year CD (no change)
  • 2.02% APY 4-year CD (was 1.76%)
  • 2.02% APY 3-year CD (was 1.51%)
  • 1.26% APY 2-year CD (no change)
  • 0.75% APY 1-year CD (no change)

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. The early withdrawal penalty is up to 180 days of interest for terms from 1 year to 4 years. The penalty is up to 365 days of interest for terms of 5 and 7 years. The penalty doesn’t eat into the principal. For example, if you withdraw principal before 1 year on a 5-year CD, you’ll lose all interest but none of the principal.

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.

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. Our PenFed overview section has more details on PenFed’s membership qualifications.

To join PenFed, click on the "Join PenFed" link at the top of any PenFed page. This will take you to the start of the online application. That first page asks about eligibility. If you don't qualify via any of the listed options, click "None of the above". A popup informs users that "We can establish your membership eligibility through either National Military Family Association or Voices for America's Troops." When you close the popup, you are then asked to select one of these two organizations.

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 York, North Carolina, Hawaii, Puerto Rico and Texas.

Credit Union Overview

PenFed is the third largest credit union in the nation. It has $12.5 billion in deposits. PenFed has an overall health grade at of A+ with a Texas Ratio of 3.17% (excellent) based on June 2013 data. Please refer to our financial overview of PenFed for more details. It's federally insured by the NCUA (Charter # 227).

Is a 3 Year Term Too Long?

Many savers have been worried about opening a 5-year CD to get a 2% rate. They don’t want to be locked into a CD if rates start shooting up. PenFed’s 3-year CD makes the decision a little easier. Will we see significantly higher interest rates in the next 3 years? Even if rates start to rise in 2016, this 3-year CD may still be a better deal than if you kept your money in a savings account. Of course, if rates shoot up in 2014, you’ll regret this CD. However, if rates don’t go up fast, you may appreciate this CD.

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

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

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