PenFed Increases Rates On All Certificates

POSTED ON BY

Deal Summary: Most competitive are the 18-month (1.76% APY) and 1-year (1.61%); $1k minimum deposit

Availability: Easy membership requirement

PenFed Credit Union (PenFed) increased the rates on all of its Money Market Certificates (CDs) today. PenFed typically changes rates at the start of each month, so this increase is a good sign that PenFed saw the need to do another rate hike so soon after its October 1st increase. The new rates aren’t exceptional, but they are competitive. The most competitive ones are the 18-month CD (1.76% APY) and the 12-month CD (1.61% APY). The long-term rates also went up, but they’re still not real competitive when compared to internet banks.

Below is a summary of the new CD rates and how they have changed.

  • 1.00% APY 6-month (was 0.85%)
  • 1.61% APY 1-year (was 1.46%)
  • 1.61% APY 15-month (was 1.46%)
  • 1.76% APY 18-month (was 1.51%)
  • 1.82% APY 2-year (was 1.66%)
  • 1.92% APY 3-year (was 1.76%)
  • 2.02% APY 4-year (was 1.87%)
  • 2.27% APY 5-year (was 2.12%)
  • 2.27% APY 7-year (was 2.22%)

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.

APYMINMAXINSTITUTIONPRODUCTDETAILS
2.27%$1k-PenFed Credit Union5 Year Money Market Certificate
2.27%$1k-PenFed Credit Union7 Year Money Market Certificate
2.02%$1k-PenFed Credit Union4 Year Money Market Certificate
1.92%$1k-PenFed Credit Union3 Year Money Market Certificate
1.82%$1k-PenFed Credit Union2 Year Money Market Certificate
1.76%$1k-PenFed Credit Union18 Month Money Market Certificate
1.61%$1k-PenFed Credit Union1 Year Money Market Certificate
1.61%$1k-PenFed Credit Union15 Month Money Market Certificate
1.00%$1k-PenFed Credit Union6 Month Money Market Certificate
Accounts mentioned in this post. Rates as of October 18, 2017.

Please refer to our PenFed's CD rates table for the full listing of CD and IRA CD rates.

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.

Another Winter CD Deal?

I’m hoping we’ll see a repeat of 2013 when PenFed came out with 3% 5-year CDs in December. I have no word of PenFed’s plans, but today’s rate increases are a step in the right direction. To give you an idea how competitive PenFed’s 2013 CD deal was, the top 5-year CD rate from an internet bank in December 2013 was 2.11% APY at EverBank. That was 93 bps under the 3.04% APY that PenFed was offering on its 5- and 7-year CDs.

Availability

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.

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 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 Certificates Compare

When compared to the 215 similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are nationally available, there are 10 banks and credit unions that offer higher rates than PenFed’s 1-year CD. Below is a sample of these:

Interest RateCD Length of TermCredit Union/Bank
1.75% APY14-Month CD ($200 min)INOVA Federal Credit Union
1.70% APY12-Month CD ($1k min)ableBanking
1.70% APY12-Month CD ($500 min)KS StateBank
1.61% APY12-Month Money Market Certificate PenFed Credit Union

When compared to the 153 similar length-of-term CDs tracked by DepositAccounts.com that require a similar minimum deposit and are nationally available, there are 3 credit unions that offer higher rates than PenFed’s 18-month CD. These are shown below:

Interest RateCD Length of TermCredit Union/Bank
2.07% APY18-month Promotional Share Certificate ($500 min)GTE Financial Credit Union
1.81% APY15-month Special CD ($1k min)Veridian Credit Union
1.78% APY20-month CD ($1k min)EBSB Direct
1.76% APY18-month Money Market Certificate PenFed Credit Union

The above rates are accurate as of 10/18/2017.

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.

Related Pages: 1-year CD rates, 5-year CD rates, nationwide deals

Comments
Chickenfoots
Chickenfoots   |     |   Comment #1
Not gonna lie, I almost bounced out of my seat when I saw PenFed being mentioned. Before reading the post, I quickly anticipated seeing the holy grail, the 3% CD making a comeback. That anticipation quickly came crashing down.
Att
Att   |     |   Comment #2
Earlier today I received an email from Penfed announcing the new rates and laughed . They are no longer rate leaders and haven't been for years. I doubt we will see a winter surprise from Penfed. I still have a 3% and a 5% CD with them but I doubt I will renew them upon maturity.
Bozo
Bozo   |     |   Comment #3
We oldsters like the no EWP on partial withdrawals from IRA CDs for folks over 59 1/2. I liken it to a savings account yielding 2%+. While not great, it's better than a poke in the eye.
Bozo
Bozo   |     |   Comment #4
Further to comment #3, I have no idea why PenFed keeps this perquisite. They don't really advertise it. You don't see billboards in retirement communities about it. It's just "there".

I suspect if one were to hazard a guess, this little wrinkle in PenFed's IRA CD terms and conditions would elicit a huge yawn. The amount of folks aware of the perquisite, divided by those who take advantage of it, might be an integer lower than 10. If you get my drift. Stated another way, it's not a huge issue.

Funny (but true) joke. StateFarmBank has a similar proviso. Some years back, I asked our local State Farm agent why her company did not market the perquisite in retirement communities, such as Rossmoor. Deer in the headlights, she had no idea what I was talking about.

It's a deep, dark, secret. Perhaps we should keep it thus.
decades
decades   |     |   Comment #7
Bozo, Say I did a partial withdrawal (over 59 1/2 IRA money) of all but 1000.00 or whatever the minimum you have to leave. Then could I request the remaining 1000.00 be taken out and pay the EWP on the 1000.00
Bogie
Bogie   |     |   Comment #5
Yep, I'm still hanging in with PenFed with several CDs including my I.R.A. CD @ 3%.
Kaight
Kaight   |     |   Comment #6
PenFed reminds me of Sears. Last time I was anywhere near a Sears mall store, which I almost never am, I went into the store for two reasons:

1. I needed to use the men's room

2. Nostalgia. I well remember when Sears was a "go to" store . . a player . . a big deal.

Heck, I even remember well when Montgomery Ward was that and more. That was then. This is now. There were no customers in the Sears store, or in the men's room. The store was very quiet. And the signage in Spanish REALLY ticked me off (there are scant few Hispanic people in the region served by that Sears store). Sears is dying. And so, it seems to me, is PenFed. It makes you sad.
ExPenFedder
ExPenFedder   |     |   Comment #8
I don't even consider PenFed seriously for CDs anymore, because of their extreme EWP. It's one of the worst around, and it makes it an automatic "no way" for me. Like a lot of people here, I'm sure, I'm not interested in short-term CDs (you can often get better rates as simple savings accounts elsewhere) and with the uncertainty in today's world, will absolutely not open a CD with them with their new EWP. I understand that most places have a penalty for early withdrawal, but why would ANYONE want to go to the place that has the harshest? When a 5yr CD has an acceptable 6mo EWP elsewhere, why would anyone consider a place that takes away 3x more than that? They also haven't been a rate leader in a LONG time, and I would take a 2.78% with 6mo EWP over 3.00% with 30% EWP any day (let alone that it's now only a meager 2.27%).

Thank you.. NEXT....
ExPenFedder
ExPenFedder   |     |   Comment #9
And PS, yes, I know the current 2.78 at GTE has a bad EWP as well, but there are plenty of places that offer reasonable EWPs. I know, I have CDs at some of them from over the past few years, good rates with mild EWPs.
PenFed Ups CD Rates with Competitive Mid-Term CD Rates

Deal Summary: Most competitive are the 15-month (1.46% APY) and 3-year (1.76%); $1k minimum deposit

Availability: Easy membership requirement

Many banks and credit unions having been coming out with higher rates today (see Forum). While it is common for credit unions like PenFed Credit Union (PenFed) to change rates on the first of the month, the number of institutions increasing rates seems a little higher than normal. Perhaps the last Fed rate hike is starting to have an effect.

Today’s rate increases at PenFed aren’t impressive, but it’s nice to see...

Continue Reading
PenFed Kicks Off New Year with Competitive Long-Term CD Rates
Availability: Easy membership requirement

Happy New Years! PenFed Credit Union (PenFed) has started the new year with higher long-term CD rates. PenFed has a history of offering top long-term CD deals in January, and it’s nice to see PenFed continuing this tradition. The new rates aren’t spectacular, but they are very competitive. Below is a summary of the new CD rates and how they have changed from last month.

  • 0.85% APY 6-month (no change)
  • 1.36% APY 1-year (no change)
  • 1.41% APY 15-month (no change)
  • 1.51% APY 2-year (no change)
  • 1.71% APY 3-year (was 1.51%)
  • 1.87% APY...
Continue Reading
PenFed Credit Union Raises Short-Term CD Rates - Top 1-Year Rate
Availability: Easy membership requirement

Three years ago PenFed Credit Union (PenFed) kicked off December with a hot 5-year CD rate. There are no hot deals to report, but PenFed is kicking off December with some higher CD rates. PenFed raised rates on four of its short-term Money Market Certificates (their version of CDs) with the 1-year term (1.36%) being the most competitive. Unfortunately, PenFed lowered rates on its longer-term CDs. All terms of 2 years and longer now have APYs of 1.51%. It’s disappointing to see PenFed with uncompetitive long-term...

Continue Reading
PenFed Credit Union Raises CD Rates
Availability: Easy membership requirement

Today is Veteran’s Day, and on behalf of DA’s staff, I would like to take this opportunity to thank the many veterans and active service members who are part of our readership.

While not noted as an official Veteran’s Day celebration, PenFed Credit Union (PenFed) chose yesterday to raise rates on many of its Money Market Certificates (their version of CDs). Of those, the 2-year (1.46% APY) and 3-year (1.61% APY) are the most competitive. The 4-year, 5-year and 7-year rates were also raised,...

Continue Reading
PenFed CU Raises Rate On Access America Checking
Availability: Easy membership

This past Sunday marked the official merger date of PenFed Credit Union (PenFed) and Belvoir Federal Credit Union. I had hoped PenFed might commemorate the occasion with some special deals or promotions, but so far I haven’t seen anything mentioned on PenFed’s website.

PenFed has, however, raised the rate on its Access America Checking account to 1.01% APY on qualifying balances between $20k and $50k; qualifying balances below $20k earn 0.50% APY.

Requirements

  • Minimum $1k Direct Deposit per cycle
  • $25 minimum opening deposit
  • $10 monthly service charge can...
Continue Reading

More Past Offers