Deal Summary: Rate increases: 15-month (1.71% APY) and 2-year (1.87%); $1k minimum deposit
For those hoping for a repeat of 2013, it’s a disappointment. PenFed Credit Union (PenFed) did have a couple of certificate rate increases for the start of December, but the rate increases are not close to what we saw at PenFed in December 2013. PenFed continues the trend that we have seen all year: short-term and mid-term rates rise as long-term rates stay the same. The only two certificate rate increases today at PenFed were on its 15-month and 24-month terms. The 18-month certificate rate remains the same and is still competitive:
- 1.71% APY 15-month (was 1.61%)
- 1.77% APY 18-month (no change)
- 1.87% APY 2-year (was 1.82%)
PenFed long-term rates remain the same, and they continue to be below the rates that you can get at several internet banks. Please refer to our PenFed's CD rates table for the full listing of CD and IRA CD rates.
The minimum opening deposit is $1k, with no stated balance cap. PenFed calls these Money Market Certificates, but they are essentially CDs. All of the above terms except for the 6-, 15- and 18-months are available as IRAs (Traditional, Roth, and CESA) but with rates that are 5 bps lower.
Last year, PenFed’s Early Withdrawal Penalty (EWP) changed and now reads as follows:
Certificates Having a Term Greater Than Six Months:
If redeemed within the first year, all dividends will be forfeited.
If redeemed thereafter, but prior to the maturity date, the early withdrawal penalty will equal 30% of what would have been earned if the certificate had been held to maturity, not to exceed total dividends earned.
As you can see, the EWP is harsh. For a 5-year term, 30% of total dividends is 18 months’ interest.
On the positive side, PenFed continues to allow penalty-free partial withdrawals of IRA CDs for members over the age of 59 1/2. The following is an excerpt from the IRA CD disclosure:
Partial withdrawals for members over the age 59 1/2 (including Required Minimum Distributions) and qualified distributions regardless of age (including Disability) may be processed from IRA certificates without incurring an early redemption penalty.
This may be one reason PenFed now keeps its IRA CD rates 5 bps lower than its standard CDs.
Headquartered in Alexandria, Virginia, Pentagon Federal Credit Union offers membership to virtually all U.S. residents. PenFed’s online application lists the various ways in which individuals can qualify for membership.
If you meet any of the following requirements, you are eligible to join PenFed:
1. I am active/retired United States Military & Uniformed Services.
2. I am an employee of a qualifying organization.
3. I belong to the following association or organization.
4. I am an employee of the United State government.
5. I am a relative or housemate of someone who is eligible.
6. I live or work at an eligible location.
Selecting Option #7, "Other," provides information about joining PenFed through membership in either Voices for America’s Troops ($17, one-time only dues) or the National Military Family Association ($17, one-time only dues). Joining either of these associations and PenFed can be done simultaneously using PenFed’s online application.
Need another way to join? No problem!
Members of the National Military Family Association and Voices for America's Troops
are among those eligible for PenFed membership. We've made it easy for you to join
one of these associations, which makes you eligible to join PenFed.
Joining PenFed and/or opening a Money Market Certificate can also be done in person at any of branches located in the District of Columbia (6), Florida, Georgia (6), Hawaii (3), Maryland (4), North Carolina, Nebraska, New York (2), Tennessee, Texas (8), Virginia (9), and Puerto Rico (1).
Credit Union Overview
PenFed Credit Union (NCUA Charter # 227) has an overall health grade of "A" at DepositAccounts.com, with a Texas ratio of 3.57% (excellent), based on June 30, 2017 data. In the past year, PenFed has increased its total deposits by $1.73 billion, an excellent annual growth rate of 10.85%. Please refer to our financial overview of PenFed Credit Union for more details.
Established in 1935, PenFed Credit Union is one of the largest credit unions in the nation, with assets in excess of $22 billion.
How the Money Market Certificate Compares
I typically group 15-month CDs with 18-month CDs when doing comparisons. For this comparison, I’ll compare PenFed’s 15-month CD to 12-, 13- and 14-month CDs. Based on this comparison of 216 CDs tracked by DepositAccounts.com, there are 8 banks and credit unions that offer higher rates than PenFed’s 15-month CD. The highest is the 12-month Jumbo CD rate at Advancial (which just went up by 3 bps). Below is a sample of these:
|Interest Rate||CD Length of Term||Credit Union/Bank|
|1.90% APY||12-Month CD ($50k min)||Advancial Credit Union|
|1.80% APY||12-Month CD ($25k min)||Crestmark Bank|
|1.75% APY||13-Month CD - Cyber Week Special ($2k min)||Synchrony Bank|
|1.71% APY||15-Month Money Market Certificate ($1k min)||PenFed Credit Union|
The above rates are accurate as of 12/1/2017.
To search for the best CD rates, both nationwide and state specific, please refer to the CD rates section of DepositAccounts.com or our Rates Map page.