PenFed CDs Make Small Gains

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Deal Summary: Rate increases on most Money Market Certificates/IRAs, with the 12-month (2.71% APY) having the most competitive rate.

Availability: Easy membership requirement

For the second month in a row, PenFed Credit Union (PenFed) has started the month by raising its Money Market Certificate (MMC) rates. Like October’s rates, the new rates aren’t that great. Of the nine MMCs in the product line, only the 12-month (2.71% APY) has a rate worth highlighting.

APYMINMAXINSTITUTIONPRODUCTDETAILS
3.30%$1k-PenFed Credit Union5 Year Money Market Certificate
2.90%$1k-PenFed Credit Union4 Year Money Market Certificate
2.85%$1k-PenFed Credit Union3 Year Money Market Certificate
2.80%$1k-PenFed Credit Union2 Year Money Market Certificate
2.75%$1k-PenFed Credit Union18 Month Money Market Certificate
2.71%$1k-PenFed Credit Union12 Month Money Market Certificate
2.71%$1k-PenFed Credit Union15 Month Money Market Certificate
2.30%$1k-PenFed Credit Union6 Month Money Market Certificate
Rates as of November 18, 2018.

I’m hoping that we’ll see some very competitive rates at PenFed in December. This December will be the 5-year anniversary of PenFed’s hot CD deals. In December 2013 and January 2014, PenFed was offering 3.04% APY on its 5-year MMC. At that time, the highest 5-year CD APY at an internet bank was only 2.11%. That PenFed 2013 CD deal would be like a 4.50% APY 5-year CD today. I haven’t heard anything about the chance of a similar hot deal, but PenFed does have a history of offering very competitive rates when they have a lot of MMCs about to mature. I know PenFed has many millions of dollars in 5-year MMCs that will be maturing this December and January, so they may offer something compelling to keep those deposits.

Any MMC can be opened with a minimum $1k deposit, and there are no stated balance caps. All of the above terms, with the exception of the 6-, 15- and 18-months, are available as IRAs (Traditional, Roth, and CESA) but with APYs 10 bps lower.

The following table illustrates the flattening yield curve PenFed’s MMCs have experienced in the last six months, as the short-term rates gain on long-term rates.

Rate Comparison Chart

PenFed’s Early Withdrawal Penalty (EWP) changed in 2016 and now reads as follows:

Certificates Having a Term Greater Than Six Months.

    a) If redeemed within the first year, all dividends will be forfeited.

    b) 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 the 12-month term, no matter when a withdrawal occurs, it is loss of all earned interest.

On the other hand, 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 10 bps lower than its standard CDs.

Thanks to DA reader, SYC, for posting PenFed's new rates in the Forum.

Premium Online Savings

PenFed introduced its new Premium Online Savings account about two months ago, earning 1.65% APY on balances up to $100k. That rate has been raised to 1.85% APY. The minimum opening deposit is $5. While the 1.85% APY is basically a mediocre rate when compared to online savings accounts, the Premium Online Savings is a convenient place to park maturing CD funds.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.85%$5$100kPenFed Credit UnionPremium Online Savings
Rates as of November 18, 2018.

The Premium Online Savings page lists a few FAQs, including,

What is the maximum amount I can transfer?

    There is an incoming and outgoing transfer limit of $5,000 per day and $50,000 per rolling 30 day period for transfers you initiate at PenFed.

    If you would like to deposit more funds into your account please contact your other bank and send us a Wire or initiate a transfer at your other bank.

    To withdraw more funds please initiate a transfer at your other bank, or call us to send a Wire.

Can I access my Premium Online Savings Account at an ATM?

    Your Premium Online Savings Account is not accessible from an ATM. To access your savings from an ATM open a Regular Savings Account or a Money Market Savings Account.

Availability

Headquartered in Tysons Corner, Virginia, PenFed Credit Union offers membership to almost every 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.

7. Other

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 the 47 full-service branches located in California, the District of Columbia (5), Florida, Georgia (6), Hawaii (3), Kentucky, Maryland (3), North Carolina, Nebraska, New Mexico (2), New York (1), Pennsylvania (4), Tennessee, Texas (8), and Virginia (9).

Credit Union Overview

PenFed Credit Union has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 5.00% (excellent), based on June 30, 2018 data. In the past year, PenFed has increased its total deposits by $319.83 million, an above average annual growth rate of 1.81%. Please refer to our financial overview of PenFed Credit Union (NCUA Charter # 227) for more details.

Established in 1935, PenFed Credit Union is the third largest credit union in the nation, with more than 1,662,000 members and assets in excess of $23.6 billion.

How the Money Market Certificate Compares

When compared to 206 similar length-of-term CDs tracked by DepositAccounts.com that are nationally available and require a similar minimum deposit, PenFed Credit Union's 12-month Money Market Certificate APY currently ranks third.

Interest RateCD Length of TermCredit Union/Bank
2.75% APY14-Month CD Special Fort Knox Federal Credit Union
2.74% APY12-Month CD SpecialNASB
2.71% APY12-Month Money Market Certificate PenFed Credit Union

The above rates are accurate as of 11/5/2018.

To searching for the best CD rates, both nationwide and in your state? Please refer to CD Rates Table page.

Related Pages: 1-year CD rates, nationwide deals

Comments
Att
Att   |     |   Comment #1
As Ken mentioned, it will be interesting what they will do with rates in December. I have a large 5 year CD coming due in December. This CD was opened when Penfed was by far the rate leader. Just wait and see.
Nothing
Nothing   |     |   Comment #2
To paraphrase an earlier post...the wsj reported a private letter from ncua that seemingly constrains that potential
Att
Att   |     |   Comment #3
I agree .. I doubt Penfed will be a rate leader again. As Ken noted they haven't offered a superior rate for 5 years.
Anonymous
Anonymous   |     |   Comment #4
I'm seriously fed up with PenFed as well as Navy Federal. They used to offer better deals than the other credit unions. I was just on Fidelity's website and again saw how US Treasury instruments -- which one does not have to pay state income tax on -- at very good rates --- 3 mos. 2.34%,
6 mos. at 2.51%, 9 mos. at 2.65%, 1 yr. at 2.74%, 2 yr at 2.90%, 3 yr. at 2.97%. Also Treasury zeros 2 yr at 2.92%. I'm staying liquid for a bit longer. The CD rates offered by banks and credit unions are poor.
#5 - This comment has been removed for violating our comment policy.
CapitalClimate
CapitalClimate   |     |   Comment #6
To further emphasize the point about Treasury bills/notes, that 1 yr 2.74% is the equivalent after taxes to a CD at 2.93% for a federal tax rate of 22% and state 5%. Raise the state rate to 8%, and we're talking 3.05%. Also, none of that interest will be taxable in 2018.
#9 - This comment has been removed for violating our comment policy.
Going, Going, GONE!
Going, Going, GONE!   |     |   Comment #7
I am actually looking forward to my CD's maturing in January so I can get out of PenFed. They used to be pretty good and competitive, but with their EWP being as harsh as it is, it seems that they don't really want more customers. (I definitely don't want to be their customer any more, unless they publish a much higher rate than I can get somewhere else.) I'm opened to suggestions as to where I should move my money come January. But I have a hunch between now and then there will be a multitude of choices.
outtathere
outtathere   |     |   Comment #10
I agree. I have one remaining CD with them (under older terms) and as soon as that one matures, I am OUTTA there. I've opened up major CDs elsewhere over the last couple years, NONE at PenFed since they instituted their terrible EWP. Guess many people aren't taking loans out with them either, otherwise they'd have to raise rates or revert back to a normal EWP. It's bye-bye for me as well.
DCGuy
DCGuy   |     |   Comment #11
I have a PenFed VISA credit card that has a bonus promotion every year for charging at least $500 in October. The card program requires that I have some kind of linked checking or savings account with the credit union. So I keep a CD account with them open. It is one of the few CD accounts that are still open now. So the bonus from the credit card usage just pads on the CD earnings from them.
SvyT
SvyT   |     |   Comment #15
@DCGuy which card has this promo?
Att
Att   |     |   Comment #17
I was grandfathered into the Penfed card with 5% off gas purchases and have a 10 year 5% CD that matures around 2020. So I'll keep my membership account open just for the credit card. Will be closing CD coming due in December unless a miricle happens. Just got the renewal letter the other day.
SirBonesALot
SirBonesALot   |     |   Comment #16
Totally agree. EWP is a real bone job. They used to be great but what made them great basically is done now.
Decency
Decency   |     |   Comment #18
I'll be leaving them as well when my current CD matures, and will instead go to other places that offers a fair EWP. For a year or two I might leave $5 in my account and automatically ACH 1c once a year to keep my account active in case they change, but I'm not counting on it, and honestly, like Wells Fargo or BofA, I see no reason to even consider them anymore. I've already opened CDs elsewhere with my CD ladder so you could say I've already left them.
MAGA
MAGA   |     |   Comment #12
Will be moving 250 k shortly as I am PenFed-up too.
john
john   |     |   Comment #13
I LOVE PEN FED THEIR PEOPLE ARE THE BESTTHANK YOU
Russian Troll
Russian Troll   |     |   Comment #14
Absolutely not! Running from PenFed ASAP!
Ratesaver
Ratesaver   |     |   Comment #19
I can't imagine the posted 3.30% 5yr cd as not a good choice as maybe a bottom of a large amount of cd;s.. I have many coming due for 2019 and just opened 2 of the above mentioned cds. at penfed. I have mostly all in 3%as of now and hope to build higher... I don't believe the rates are going up up fast so build slowly with what is out there. Here we go I hope
Att
Att   |     |   Comment #20
Connexus CU just came out with a 4% 60 month.
#21 - This comment has been removed for violating our comment policy.
Att
Att   |     |   Comment #22
With 2 banks with 4% rate for 4 or 5 years Penfed will be losing a lot of funds next month.
gregk
gregk   |     |   Comment #25
As a small CU (like Garden State) the Connexus offer isn't likely to last very long. By next month these two 4% offers will be history, and PenFed's renewal rate looking not so competitively challenged as it does now, - I expect them to probably jack it up to 3.50% or thereabouts come December. Still won't be enough for me, but more than likely they'll largely retain much of the funds raised five years ago given the conservative and inertial natures of most CD investors.
Nothing
Nothing   |     |   Comment #26
The feds won’t allow it!
gregk
gregk   |     |   Comment #27
Won't allow what?
JimDavis
JimDavis   |     |   Comment #23
Need a reminder, what other banks/cu's offer a no penalty partial withdrawal for 59 1/2 +
gregk
gregk   |     |   Comment #24
A new CEO took charge at PenFed in April of 2014 and initiated a sea change in the former policies and practices of his longtime predecessor Mr. Flynn (whose parting gift was the 3% CD's offered in late 2013 & early 2014). I think we should all forget about any return to those days when PenFed had class, and its good performance was shared by the owners (as it should be) in the form of market leading CD and loan rates. The new guy doesn't at all share that mindset (for whatever reason) and has positioned PenFed as an organization that serves its management class first and foremost and gains its business through high-cost marketing campaigns rather than the great products it used to be distinguished by. I've given up on them myself, and will be drawing all funds out of there as the share certificates I've habitually renewed for over two decades mature.
New CD Rates Offered by PenFed Credit Union
Deal Summary: Rate increases on all Money Market Certificates/IRAs. Most noteworthy are the 5-year (3.30% APY) and 12-month (2.60% APY).

Availability: Easy membership requirement

Good news – PenFed Credit Union (PenFed) has started the month by raising the rates on most of its Money Market Certificates. Unfortunately, the new rates aren’t that exceptional. (FYI – a Money Market Certificate (MMC) is essentially a CDs.) Of the nine MMCs in the product line, the 5-year (3.30% APY) and 12-month (2.60% APY) are the most competitive.

Continue Reading
PenFed Credit Union Begins June With New CD Rates
Deal Summary: Rate increases on all Money Market Certificates/IRAs. Most noteworthy are the 12-month (2.25% APY) and 5-year (3.00% APY).

Availability: Easy membership requirement

PenFed Credit Union (PenFed) announced new rates on its Money Market Certificate (MMC) but they are not exceptional. (Don’t be confused by the “Money Market Certificate” moniker – they’re essentially CDs.) While the 5- and 7-year MMCs have broken the 3.00% APY ceiling, none of the new APYs are rate leaders, as internet banks (and a few credit unions) continue to be the front-runners...

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First Of The Month CD Rate Increases At PenFed
Deal Summary: Rate increases on all Money Market Certificates/IRAs. Most noteworthy are the 12-month (2.07% APY), 18-month (2.22% APY), and 5-year (2.68% APY).

Availability: Easy membership requirement

It’s the first of the month, which means PenFed Credit Union (PenFed) will probably have raised its Money Market Certificate (MMC) rates. While several of the new APYs are competitive, none of them are rate leaders, as internet banks continue to be the front-runners in the CD rates race. Ever the optimist, I look forward to hot MMC deals at PenFed –...

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CD Rates Up at PenFed But There Are No Rate Leaders
Deal Summary: Rate increases on all CDs and IRA CDs. Most noteworthy include 18-month (1.97% APY) and 7-year (2.48% APY).

Availability: Easy membership requirement

The start of a new month often brings rate changes at credit unions, and that is the case at PenFed Credit Union (PenFed). All of its certificate and IRA certificate rates increased today. Unfortunately, the rates for all of the terms are less than the rates at several internet banks. Hopefully, one of these days, we’ll see the return of some hot CD deals like many...

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Two Small CD Rate Increases at PenFed

Deal Summary: Rate increases: 15-month (1.71% APY) and 2-year (1.87%); $1k minimum deposit

Availability: Easy membership requirement

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...

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