PenFed Credit Union Ups All CD Rates


Deal Summary: 15-month Money Market Certificate, 0.75% APY, $1k minimum deposit

Availability: Easy membership requirement

It’s been a long 2½ years since I last wrote about Certificate rate increases at PenFed Credit Union (PenFed), so I was pleased to see across-the-board rate increases on PenFed’s Money Market Certificates (MMC). While the majority of the MMCs saw modest increases of 10 bps, the 15-month MMC rate increased from 0.45% APY to 0.75% APY, making it the most competitive MMC in PenFed’s product line. The minimum opening deposit for any MMC is $1k, with no stated balance cap.

1.10%$1k-PenFed Credit Union5 Year Money Market Certificate
1.10%$1k-PenFed Credit Union7 Year Money Market Certificate
0.85%$1k-PenFed Credit Union3 Year Money Market Certificate
0.75%$1k-PenFed Credit Union4 Year Money Market Certificate
0.65%$1k-PenFed Credit Union2 Year Money Market Certificate
0.60%$1k-PenFed Credit Union12 Month Money Market Certificate
0.60%$1k-PenFed Credit Union15 Month Money Market Certificate
0.60%$1k-PenFed Credit Union18 Month Money Market Certificate
0.40%$1k-PenFed Credit Union6 Month Money Market Certificate
Rates as of September 27, 2021.

All of the “Year” term-length MMCs are available as IRAs (Traditional, Roth, and CESA), but with APYs a uniform 5 bps lower.

PenFed has a long history of competitive MCC rates. Many DA readers took advantage of the promotional 10-year MMC (5.00% APY) offered by PenFed in late 2010 and early 2011. Other great deals occurred in late 2013 and early 2014 when PenFed offered 5-year and 7-year MCCs earning 3.04% APY. These fabled MMCs serve as the touchstone when discussing hot CD deals.

I think many of us hoped (believed) PenFed would offer something fantastically competitive in late 2020/early 2021 to keep the millions of dollars deposited in the 7-year and 10-year MMCs in-house following maturity. Unfortunately, our collective hopes were not met.

As stated on the done Money Market Certificate page, the Early Withdrawal Penalty (EWP) for terms greater than six months reads as follows:

Within 365 days from the open date of the certificate, the penalty will be the last 365 days of dividends earned.

After 365 days from the open date of the certificate have elapsed, the penalty will be 30% of gross amount of dividends that would have been earned if the certificate had reached maturity.

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 MCCs for members over the age of 59 1/2. The following is an excerpt from the IRA MCC 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 MCC rates bps lower than its standard MCCs.


Headquartered just outside the Beltway in McLean, Virginia, PenFed Credit Union’s field of membership (FOM) has been open to almost every U.S. citizen or resident alien for many years, with a laundry list of ways to qualify. For those who didn’t qualify through residency, employment, or military relationship, joining one of two charitable organizations provided a route to PenFed membership.

Qualifying for PenFed membership has become much simpler: according to CSR, the only requirement is depositing $5 in a Savings/Share account.

The online application still lists five membership requirements (residency, employment, and military relationship) but the sixth requirement reads,

None of the above apply, but I would like to join PenFed.

I expected to see a drop-down showing the qualifying organizations, but there is none. CSR explained the drop-down was removed when the FOM changed.

Joining PenFed and/or opening a Money Market Certificate can done online or at any of the 38 full-service branches located in California, the District of Columbia (3), Florida (3), Georgia (2), Hawaii (3), Maryland, North Carolina, Nebraska, New Jersey, New York (4), Pennsylvania (2), Texas (10), Virginia (5), and Wisconsin.

You will need to maintain a $5 Savings/Share Account as part of your PenFed membership.

Credit Union Overview

PenFed Credit Union has an overall health grade of "A+" at, with a Texas Ratio of 3.30% (excellent), based on March 31, 2021 data. In the past year, PenFed has increased its total non-brokered deposits by $2.22 billion, an excellent annual growth rate of 12.35%. Please refer to our financial overview of PenFed Credit Union (NCUA Charter # 227) for more details.

Established in 1935, PenFed Credit Union is currently the fourth largest credit union in the nation, with more than 2,230,000 members and assets in excess of $27 billion.

How the Money Market Certificate Compares

When compared to 143 similar length-of-term CDs tracked by that are nationally available and require a similar minimum deposit, PenFed Credit Union's 15-month Money Market Certificate APY currently shares the top spot with Evansville Teachers Federal Credit Union’s 18-month CD APY.

The above information and rates are accurate as of 7/3/2021.

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, 5-year CD rates, nationwide deals

  |     |   Comment #1
I am feeling like many others as I read the rates of Penfed and they should not be calling themselves a credit union ... Bank sounds more like it... They had a great yr. and they still are having rates that are not great at all. Time to leave
  |     |   Comment #2
I opened some 15 month cds with deposits from another other PenFed accounts. It is very difficult to add my wife as a co-owner to the new accounts even though she has been a co-owner on all other accounts for many years. A call to customer service was not any help.
  |     |   Comment #3
It's silly to consider such miniscule rate increases noteworthy, especially so since PenFed hasn't been relevant to depositors in many a year. Does Ken think one tenth of one percent rate increases are evidence of some sleeping giant now finally waking up? I see no likelihood of meaningful change. Forget about them.
  |     |   Comment #4
“ is an independent, advertising-supported deposit account comparison service. monitors over 10,000 banks and credit unions. does accept advertising compensation for featuring certain products from a very small percentage of these financial institutions. This advertising might influence where these products or financial institutions appear on the site. However, this advertising does not influence whether a product is included on the site, nor does it influence how the products or institutions are assessed within’s editorial coverage or its financial health rankings. While very comprehensive, does not include all deposit accounts available. The APYs (Annual Percentage Yields) displayed are as of 7/3/2021.”
  |     |   Comment #5
Your point being what?
  |     |   Comment #6
Does it answer your ?
  |     |   Comment #7
PenFed is paying DA for the storyline, you're suggesting?

Highly unlikely, as a storyline like this one is more humiliating to PenFed than exalting.

I think Ken just has a pre-occupation with PenFed because of long bygone days
when they were always a rate leader, and believing because of that he should keep them at the forefront with regular notice of their now consistently miserable offers. I'd call on him to move on.
  |     |   Comment #8
It's not like other news got bumped because he posted this story. It's a rate increase. That's all. He's not advising anybody to dash over there. If you don't like the story move on. Did his posting it damage your day? He could care less if PenFed stays relevant, but I'm sure he has an interest in keeping this site that way.
  |     |   Comment #9
Seems to me that rate increases, regardless of magnitude, are news in an environment where rate cuts have been the norm. It's a good potential data point for forecasting.
  |     |   Comment #10
Given innumerable headlines and stories that could be posted here and elaborated on (as relevant to depositors) of course other news got bumped.
  |     |   Comment #11
I think all of us savers have had it up to "here" with these ongoing low interest rates right across the board. The current rising inflation only adds to our justifiable frustration. But when it comes to Ken my attitude is:

Don't shoot the messenger

Ken is doing his job and keeping his promise to us savers, his readers. When (if ever) there is better interest rate news to report, I'm counting on Ken still to be here and doing such reporting.
  |     |   Comment #12
Perfectly stated Kaight.

I've profited significantly from Ken's diligent work over these past few years, and it's not his fault that deposit accounts are currently in a lopsided buyers' market. The blame belongs with government mismanagement and misdirected priorities, not with Ken. I think it's inappropriate to address the blame where it doesn't belong and it would be much more productive to redirect it to the source of the problem.

I'm extremely grateful for the expert resource that Ken provides and thankful to have access to it.
  |     |   Comment #13
savers are getting crushed. not since '74-'75 has the PCE inflation rate exceeded the 10 year Treasury for longer than one quarter. news of a small rise in deposit rates at the institutional level is noteworthy in current context.
  |     |   Comment #15
forgot to mention that this PCE inflation rate greater than 10 year Treasury relationship has been ongoing since 3rd quarter 2020
  |     |   Comment #14
What is unfortunate is that many who are not financially savvy with respect to savings rates think Pen Fed is wonderful because of their military affiliation or customer service; which, in my view, is what allows Pen Fed (and USAA) to continue their disrespectful practice of offering active and retired military and their families such uncompetitive rates. There is a similar dynamic with USAA, which has had even more abysmal rates than Pen Fed for many years. I remember reading USAA customer reviews for their CDs when USAA had some of the worst rates in the country (as they do now), and these non-financially savvy retired military were singing the praises of USAA's CD offerings. I hope that all active and retired military members; and their families who are members will take an objective, sober look at Pen Fed and USAA rate offerings and be willing to go elsewhere until if and when their rates become competitive once again.
  |     |   Comment #16
i'm a USAA member. i think one factor, at least for me in the past, was inertia. during my active duty days, i had direct deposit of military pay set up to USAA and would just let the money sit there if i didn't use it. it was quite a busy time, and i didn't think much about it. sites like this one are good for those who have the time and interest to seek better yields for 'safe' money.
  |     |   Comment #17
Hi Wood00W: I can understand the inertia factor/scenario that you mention. My concern though is those without financial savvy who are retired military who were actively seeking new CD accounts, and concluded--when top CD rates were at 3%--that USAA's 1% offerings were just wonderful, viz.
  |     |   Comment #18
Hi kcfield

Having several people in my family who served in the military, I understand your sentiment. We certainly don’t want to have any institution taking advantage of those who serve.

But I don’t think it’s quite as simple as it may seem.

A credit union is not a government entity, it is operated by its membership who elects a board of directors. No bank or credit union can set its rates arbitrarily, they have to take numerous factors into account including cash flow needs, reserve requirements, the weighted rate and quality of their loans and portfolio return, various risk factors, their operating expenses, various operating ratios, market factors and other metrics. The results are unique to the situation of each credit union and typically vary widely by locality where most of their assets are based. There are also other unique reasons why one credit union may be able to prudently offer a higher rate than another.

And credit unions don’t have legal authority to levy taxes like the government does. So unlike government which is so nobly generous with taxpayers’ money, they must make prudent economic decisions in order to survive.

I can’t say whether this CU is giving members the benefit of the best deals their financial situation allows, but I can say that it is possible that they are.
  |     |   Comment #19
NCUA has regulatory oversight and a CU cannot operate in an unsound manner and expect NCUA sit on the sidelines. Perhaps the cited spread was an isolated case and/or USAA didn’t need more deposits b/c of….or the other had a better loan development team!  Cost of funds for each was…and spread was…?  Education is always needed and most CUs have programs 
  |     |   Comment #21
PD: I hear what you are saying; but there is simply no way for a bank (USAA) or credit union
(Pen Fed) to justify rates that are so far below market. For example, USAA's 5 year CD rate is currently .06%. Asserting that a financial institution went through a thorough decision making process that took all factors into account does not justify such a final result. But let's say for a moment we take your comments at face value and for argument's sake let's say USAA had no other choice that to have rates that are more than 25 times lower than the best options out there. In such a case, USAA should send a letter to their members explaining why such a temporary measure is necessary given their financial circumstances. In my view, they should not remain silent on such a matter; nor should they try to distract attention from such a matter by sorting CD and savings customer reviews by highest rating rather than by latest comment, so that the negative reviews are not seen. In some instances, negative reviews are not posted. There is never an excuse for lack of transparency. I am incidentally, both a USAA and Pen Fed member, so I have the opportunity to receive correspondence.
  |     |   Comment #22
I’m reminded a few years ago on DA there was reference in a “buried” wsj note/article on penfed stating in effect that ncua issued a private regulatory letter to penfed…we never saw the substance of that. While recent “small” mergers with penfed…presumably with ncua blessing…have occurred…rates have not been competitive, in my view, for a couple of years…you figure!
  |     |   Comment #23
I agree with the notion of transparency. But I also believe in caveat emptor. And it applies to everyone service member or not. It is every consumer's obligation to assume responsibility for their own purchase and investing decisions. The rates are published, it's not hidden.

Just being theoretical here because I don't know the specifics for USAA.

Suppose USAA is offering below market loans to service members such as below market VA mortgages. They couldn't do that and also offer high deposit rates for very long. The spread between their borrowing and lending rate is probably the most critical metric on their financials. Lots of service people COULD be getting a great deal from them on the lending side if this is true. So you really have to look at the whole picture to determine how many people they are serving well. And also remember that depositors for the most part aren't the customers. They are more like suppliers. They supply the inventory. The main product is loans. So it is the CU's borrowers who are the customers (many of whom may also be depositors of course but it is still an important distinction).
  |     |   Comment #20
My 3% and 5% CDs all matured and no longer have any CDs with Penfed. Still have my 5% back on gas grandfathered credit card. Penfed use to be the rate leader on this site.
  |     |   Comment #24
I still have the 5% cash back Visa... I noticed their rates change right after they offered that 10 year 5% CD. Btw, at the time they offered it it was supposed to be for people who had CDs maturing at that specific time frame, instead they allowed anyone to buy it, big mistake.
  |     |   Comment #25
If you're interested in a 15-month time frame, you might as well ladder half the balance at Lafayette for 12 months and the other half at USAlliance for 18 months to get a yield of 0.80% on the total amount.
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