PenFed Increases Rates On All Certificates


Deal Summary: Most competitive are the 18-month (1.77% 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 (1.77% 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%)
  • 1.77% 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.

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
1.77%$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 November 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.


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, 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 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:

When compared to the 153 similar length-of-term CDs tracked by 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:

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 or our Rates Map page.

Edit 10/30/17: PenFed corrected the 18mo APY from 1.76% to 1.77%. Updates made to reflect this correction.

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

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   |     |   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   |     |   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   |     |   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   |     |   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
Bozo   |     |   Comment #22
Decades, re comment #7, that is my understanding.
Nothing   |     |   Comment #23
Two distributions to you in one year?
Anonymous   |     |   Comment #18
Hi Bozo, I was under impression that MOST IRA CDs allow partial no-ewp withdrawals after 59.5. That's been my experience in all (admittedly just few) banks without me looking specifically for this feature. I thought / assumed banks must allow no-ewp withdrawals for RMDs at least and at that point, they just say they allow partial withdrawals without penalty...
Bozo   |     |   Comment #24
Anonymous (re comment # 18) RMDs are quite different. RMDs kick in at the year you turn 70 1/2.

It's complicated. While many financial institutions will allow penalty-free withdrawals from IRA CDs for a RMD, the institution might limit the penalty-free withdrawal to your RMD percentage times your account therein.
Bozo   |     |   Comment #26
Further to my comment #24, if you intend to take a RMD from an IRA CD, it is best to call ahead. If you get my drift.
paul   |     |   Comment #32
So,if I am 60 and want to start withdrawing from an ira cd, might a bank say no since it is not a rmd?
Bozo   |     |   Comment #43
Paul (re comment #32), that's correct. RMDs commence in the year you turn 70 1/2. If you have a account with, say PenFed or StateFarmBank, you can take "normal distributions" at 59 1/2 irrespective of RMD status. Normal distributions from IRA CDs count towards your RMD.
a true soldier of....
a true soldier of....   |     |   Comment #42
your pontification and infallibility is never a secret.
Bogie   |     |   Comment #5
Yep, I'm still hanging in with PenFed with several CDs including my I.R.A. CD @ 3%.
#6 - This comment has been removed for violating our comment policy.
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   |     |   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.
ExPenFedder   |     |   Comment #25
You're right, my mistake, didn't look carefully at the GTE one because I still have 3% ones so don't currently need anything. You're right -- the GTE is a good one if you're looking for a CD now, which just puts PenFed to shame even more.
alan1   |     |   Comment #29
re #25 -- I'm no financial adviser, but you might wish to open a GTE promotional add-on CD. It might be a place to put money when your 3% CDs mature. Only $500 to open (plus $5 savings account).
klink   |     |   Comment #35
I did and I have 5 maturing shortly. Works well with my plan for the 3% to take effect at some point in 2018. One can only hope.
Att   |     |   Comment #12
When Penfed offered a 5% CD for 10 years around 2010 I closed a CD I had with them to fund the 10 year CD. At the time their EWP penalty was low.

I still have this 5 year CD and a 3% account that matures next year. As per Ken's post one of their last 3% 5 year rates was 2013. I wonder how many people are going to close these CDs and move their funds to another institution next year?
Nam   |     |   Comment #13
I will.
DOA   |     |   Comment #14
Just have to wonder if the burden of acquiring the problem Valor Credit Union may have something to do with Penfed keeping their offers on their cd rates too low.
Att   |     |   Comment #15
They have been low for years. The last high rate I saw was in 2013. I'm sure the Valor marriage makes it more unlikely they will raise rates next year.
Bogie   |     |   Comment #30
PenFed's long term rates are still in the basement but their short term CD rates have been creeping up recently.
Att   |     |   Comment #31
When my Penfed CD comes due next year I will compare rates within the time frames I'm willing to accept. I will choose the bank or CU with the highest rate but also take into account restrictions and/ or limitations a bank or CU imposes. If Penfed has the best offer, they will have my funds. I doubt they will be offering a top rate.
Att   |     |   Comment #16
I think when they had that 5% CD in 2010 or so they had a lot of people who took early withdrawals to take advantage of the rate. Wait times and customer service suffered during the time the rate was available.
Bogie   |     |   Comment #17
I don't blame banks or CUs that institute extreme EWPs. Far to many people gaming the CD system as indicated on this site.

I don't consider EWPs a negative when determining where to invest in my CDs. I just search for the highest rate available to me at the time. Then I'm done with that one and move on the next CD when it matures.
Cat C
Cat C   |     |   Comment #11
I predict NavyFed will give us a 3% CD special this December... length around two years. Just a (hopeful) prediction based on previous years...
Sylvia   |     |   Comment #19
NavyFed has a habit of imposing low maximums (e.g., $10K), nonetheless I'll be 1st in line for any 3%, 2 year deal. Also hoping to see Andrews come through with another good Black Friday promo.
Bogie   |     |   Comment #20
I'll be right behind you, or maybe in front of you...............same for Andrews.
Sylvia   |     |   Comment #21
Realistically, Andrews may still be awash in cash from their generous 2016 Good Friday promo which was extended to year end. They were surprisingly silent during Military Appreciation Month this year. I agree Santa will likely be a military related CU, not PenFed though. Probably like you, I'm not picky about the branch, just show us the money.
DOA   |     |   Comment #33
When you mentioned military related, I then thought of USAA Bank. Their extreme low rates are another mystery. The highest rate available is 1.06% on a 7 year cd. Like Penfed, USAA use to offer competitive cd rates.
Sylvia   |     |   Comment #34
Organizations change strategies and focus all the time, keeping us rate chasers on our toes. Alliant, non-military related and popular with DA readers, also used to be a rate leader. Has not been one for years now. It stays respectable -- no 1.06% on a long-term CD -- but nothing that would generate more than a handful of comments here. I think PenFed's current strategy for growth is through acquisition. It picks up smaller CUs that don't have the scale to compete, then markets PenFed products to those members. Can't speak to USAA as I've got no experience with them.
Bozo   |     |   Comment #44
DOA, USAA member here since I was a boot Ensign in 1970 (re comment #33). Over the past couple of years, I've walked out of after-tax and IRA CDs to the tune of over $600K. They won't negotiate. It's their rate, take it or leave it.

Upping the irony, their e-mail back to me suggested their rates were "competitive". I noted I could make more on a totally-liquid savings account at Alliant than I could on USAA's seven-year CD. Silence.
ExPenFedder   |     |   Comment #27
Two things to note:

(1) If you have an IRA, consider NavyFed as well, for NavyFed is one of the few institutions that allow you to ADD to an existing IRA CD every year up to your maximum amount (so if you don't have to open a new IRA CD every year). Note this applies ONLY to IRA CDs.

(2) EWPs are more important than you think. At the time Andrews came out with their 3% CD, I had Navy's 2.5%/2.5 year CD. I was thinking of closing it out and moving everything over to Andrews, but even with Navy's gentle 6mo EWP, I did the math; I would have lost a lot in the move, even with just the gentle 6mo EWP, and while it could have gone either way, I decided to keep it where it was. Imagine if that had been a PenFed CD with a 30% penalty. At any rate, I now no longer even bother looking at PenFed's rates or considering them with that EWP.
ExPenFedder   |     |   Comment #28
PS: What I did was take out my accrued dividends from NavyFed (what they'll let you do for free) and opened a smaller Andrews 3% CD with that instead (plus some extra money I had around), to keep a bit of a CD ladder. But again I don't do anything with PenFed anymore. I still have $5 in there, and auto-ACH a couple pennies every couple months so I don't get dinged any account fees, but truthfully, I may just close my account there in time, for there's little reason for me to bother with them anymore.
klink   |     |   Comment #36
Agreed, a few pennies every month and the 5% cash back gas card.
gregk   |     |   Comment #37
Still an also-ran in my view, - but what matters is where they are in a little more than a year. Will PenFed stand by and watch maturing 5 year Certificate holders evacuate the Credit Union en masse or pony up with a top rate replacement to keep the money "at home"? I'm guessing they'll be there with something attractive.
DaveJ   |     |   Comment #38
I've been with PenFed long enough to remember the old IRA Certificate withdrawal terms. NO penalty whatsoever. I can't remember if you had to be over 59 1/2 to take advantage of it, but you could open a 5 year CD, and if rates went up, just call up , close and reopen at higher rate, zero penalty. They changed that policy a couple years before I turned 59 1/2.
gregk   |     |   Comment #39
The sea change with PenFed begain shortly after the retirement of its longtime CEO Mr. Flynn in mid-2014 (subsequent therefore to its late 2013/early 2014 3% CD's). I suspect a different direction was inaugurated at that time that turned away from any commitment to be a rate leader for deposit accounts to henceforth just middle-of-the-pack status and not at all distinctive. Flynn was generous to a fault during his tenure, always passing along the benefits of good-performance outcomes at PenFed immediately to its members in the form of high CD and low loan rates, and in the process enormously increasing PenFed's asset base to behemoth level size. The new regime apparently has a much altered vision and strategy, stingier and more circumspect from our perspective, - an unfortunate development. Still, late 2018 will be a telling time frame for discerning just where PenFed's leaders' collective mindset locates itself. They took in massive deposits from that 3% CD offer of 4 years ago, and without a commitment to retain those assets of members at its maturity will likely slip further into the "also-ran" status I currently relegate them to.
Sylvia   |     |   Comment #40
With PenFed's acquisition spree has come added branch locations -- Valor alone had 4 -- which makes them less reliant on internet depositors such as ourselves who largely represent hot money. With a more diversified base of customers, they may no longer feel as pressed to be rate leaders.
Att   |     |   Comment #41
Branches no longer matter. It is easier to open a CD over the internet than drive to a bank and wait for someone to help you. Also, opening up a CD at a branch is more costly for the institution. You have to have staff at the bank to open the CD and the costs of operating a building.

Looks like Penfed won't be a CD rate leader in the future so people will look at sites like this and find better rates elsewhere. Some oldtimers with IRAs may want to stay so they can take their RMDs. I'm with them till 2020 when my 10 year 5% CD matures. I also was grandfathered into a 5% gas rebate card so maybe I will stay with them.

Also, I'm sure many of the former members of Valor are rate chasers and took advantage of 3% add on CD.. They will leave Penfed if they don't offer high rates. Let's see what plays out in 2018.
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...

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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...

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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...

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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,...

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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.


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