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 CDs. Below is a summary of the new CD rates and how they have changed from last month.

  • 0.85% APY 6-month (was 0.60%)
  • 1.36% APY 1-year (was 1.21%)
  • 1.41% APY 15-month (was 1.31%)
  • 1.51% APY 2-year (was 1.46%)
  • 1.51% APY 3-, 4-, 5- and 7-year (was 1.61%)

The minimum opening deposit is $1k, with no stated balance cap. All of the terms except for the 6-month and 15-month are available as IRAs (Traditional, Roth, and CESA) but with rates that are 5 basis points lower.

1.51%$1k-PenFed Credit Union2 Year Money Market Certificate
1.41%$1k-PenFed Credit Union15 Month Money Market Certificate
1.36%$1k-PenFed Credit Union1 Year Money Market Certificate
Accounts mentioned in this post. Rates as of December 10, 2016.

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

As I noted in a January blog post, PenFed’s Early Withdrawal Penalty (detailed on the Money Market Certificate Application) has 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.


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 in the 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

Clicking on Option #7, "Other," provides information about joining PenFed through membership in either Voices for America’s Troops ($14, one-time only dues) or the National Military Family Association ($15, 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 38 branches located in the District of Columbia (6), Florida, Georgia (2), Hawaii (3), Maryland (2), North Carolina, Nebraska, New York (2), Oregon, Tennessee, Texas (4), Virginia (10), Guam (2), and Puerto Rico (2).

Credit Union Overview

PenFed Credit Union (NCUA Charter # 227) has an overall health grade of "A" at, with a Texas ratio of 2.72% (excellent), based on June 30, 2016 data. In the past year, PenFed has increased its total deposits by $1.75 billion, an excellent annual growth rate of 12.3%. 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 over 1.46 million members and assets in excess of $20 billion.

How the Money Market Certificates Compare

When compared to the 219 similar length-of-term CDs tracked by that require a similar minimum deposit and are nationally available, PenFed Credit Union's 1-year Money Market Certificate APY currently ranks first.

Interest RateCD Length of TermCredit Union/Bank
1.36% APY1-Year Money Market Certificate PenFed Credit Union
1.31% APY12-Month eCDVirtual Bank
1.31% APY1 Year Yield Pledge CDEverBank

When compared to the 157 similar length-of-term CDs tracked by that require a similar minimum deposit and are nationally available, only five institutions have higher rates than PenFed Credit Union's 15-month Money Market Certificate rate. A sample of these are shown below:

Interest RateCD Length of TermCredit Union/Bank
1.81% APY18 Month Holiday Certificate SpecialAndrews FCU
1.60% APY16-Month CDConsumers Credit Union
1.41% APY15-Month Money Market Certificate PenFed Credit Union

The above rates are accurate as of 12/1/2016.

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.

Shorebreak   |     |   Comment #1
As of 11/30/2016 PenFed's long-term Money Market Certificates were even uncompetitive with U.S. Treasury Notes of equivalent maturities.

PenFed  5-year MM Certificate 1.51%
Treasury 5-year Note 1.83%

PenFed  7-year MM certificate 1.51%
Treasury 7-year Note 2.18%
Anonymous   |     |   Comment #2
This is very disappointing and really makes one wonder what is going on over at Andrews.  I have no clue what is moving the DC region CD marketplace right now but I surely wish I DID understand.
Anonymous   |     |   Comment #3
i dont know either but talking heads on finance channel say DC and Iowa are the hot areas.
i an only believe it politics and ethanol.
Anonymous   |     |   Comment #11
I certainly agree with that.  I have been writing here for several months that the DC region, along with Iowa, are hot spots.  This is problematic for us in Iowa because too often entry for us there is restricted.  I surely hope more hot spots begin to appear;  maybe it will happen after January twentieth.  It cannot happen too soon.
Anonymust (anonymous)   |     |   Comment #4
CD yields are poor right now.  I've been replacing matured CD's with Muni bonds.  If you live in a high-tax state, a high-quality muni (AA+ rated) can get you about 3% tax equivalent yield going out about 3-4 years.  For 5 years, about 3.5% equivalent (depending on your tax bracket).
Just Me
Just Me (anonymous)   |     |   Comment #17
Where do you buy the muni bonds?
Anonymous   |     |   Comment #5
I think Penfed was swamped the last time they had a rate that was much higher than the others and won't be a leader again. Andrew's is overwhelmed witj their current offers.
Anonymous   |     |   Comment #6
Penfed is unable to loan the money it continues to run newspaper ads about loan money being available throughout the country.  It probably lost all their high performer loan originators with the new CEO, i.e. "they knew the old days were gone and that their compensation arrangement is toast."  The "new" Penfed needs to decide if it is going to be part of the rebuilding of America by expanding their loan activity or remain on the sidelines!
mrvirgo   |     |   Comment #7
I gave up on Penfed and went with Andrew's 3% certificates.  I'm glad I didn't wait for Penfed to step up to the plate.
Anonymous   |     |   Comment #8
I believe  comment #5 hit it.  PenFed is awash with cash.  Also they are probably still stinging from the extremely high long term rates they offered several years back.  PenFed still remains my primary CU.  I don't rate chase with CUs, but I don't hesitate with banks.  Although worthwhile opportunities have been far and few for several years now.    
Bozo   |     |   Comment #9
To: Anonymous (Comment #8).

Awash in cash is probably correct. Another issue is the sub-prime auto loan market (the New York Times had an excellent article today). Defaults are increasing. PenFed marketed its auto loans aggressively (remember all those ads in the newspapers?).  Might this be coming back to bite PenFed in the tushy? Suffice it to say, when my two IRA CDs with PenFed mature next year, I will no doubt find new homes for them both.
Anonymous   |     |   Comment #14
Yes, Penfed and nearly all CUs and banks are awash in cash.  Believe me, if we are waiting for the Fed to raise rates, the banks and CUs are also.  They are not making money on these ultra-low rates.  Credit card interest rates are keeping them alive.  These "offers" of higher than market rates are not because they "need" the cash; they want to turn us--depositors--into "customers" who purchase their product--the only one they sell--money.   Since getting CDs with the the Northwest CU and USAlliance deals I found here they have not failed to offer me car loans, credit cards, personal loans, etc.  Unfortunately for them, I have no need to borrow money. 
Bozo   |     |   Comment #15
To: Anonymous (Comment #14).

I've always wondered about the efficacy of cross-marketing. OK, let's assume I open a CD with XYZ credit union at 2% for five years. That suggests I have disposable income to lend to others. Does it suggest I need to borrow?
Anonymous   |     |   Comment #16
XYZ would prefer to loan to current "savers" for several reasons, e.g. They know you, good borrowers are savers, and most importantly their perceived right of set off...latter is a powerful tool...thus more than the amount borrowed is at risk.  If purchase mortgage loan is the exception for set off if anti-deficiency legislation states...about 10 of them
Anonymous   |     |   Comment #10
Andrews is overwhelmed?  Not really sure what that means.  But if it means they have too much money incoming, why then did they extend their deals for another month?
Anonymous   |     |   Comment #12
By overwhelmed is that their Rep's can't handle the workload and customer service suffers. You have to wait a long time to get through and many people have posted this. When Penfed offered high rates they couldn't handle it and the customerservice suffered. Ask Paoli about Penfed. The institution that offers the highest rate gets my money. I avoid the CDs with low maximum deposits. I remember someone posting that Penfed was smart offering high rates because intrest rates were going to climb.
Anonymous   |     |   Comment #13
Thanks, Ken. You do a wonderful job with your website.
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.


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