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2.12%$1k-PenFed Credit Union7 Year Money Market Certificate
2.07%$1k-PenFed Credit Union5 Year Money Market Certificate
1.76%$1k-PenFed Credit Union4 Year Money Market Certificate
1.61%$1k-PenFed Credit Union3 Year Money Market Certificate
1.46%$1k-PenFed Credit Union2 Year Money Market Certificate
1.26%$1k-PenFed Credit Union1 Year Money Market Certificate
Accounts mentioned in this post. Rates as of March 29, 2017.

Big Rate Increases For Some of PenFed CDs


I was pleasantly surprised to see the new certificate rates at Pentagon Federal Credit Union (PenFed) for November. Rates went up for terms of 1 to 4 years. In fact, the new 1-, 2- and 3-year CD rates are very competitive. This is different than past PenFed CD promotions in which the best deals have been for the longer terms. Below is the list of the new PenFed CD rates for terms of 1 to 7 years with the noteworthy rates highlighted. I've also listed the old rates in parentheses. These new rates are listed in PenFed's Money Market Certificates page as of 11/1/2012.

  • 2.02% APY 7-year CD (no change)
  • 1.71% APY 5-year CD (no change)
  • 1.61% APY 4-year CD (was 1.51%)
  • 1.61% APY 3-year CD (was 1.25%)
  • 1.36% APY 2-year CD (was 0.99%)
  • 1.26% APY 1-year CD (was 0.90%)

PenFed calls their CDs "Money Market Certificates", but they are essentially certificates of deposit (CD) with fixed rates for specific terms.

Minimum deposit is $1,000. The rates are also available in an IRA. Even though PenFed typically maintains CD rates through the month, they no longer guarantee it. For more details about PenFed CDs, please refer to my PenFed CD review.

One advantage of PenFed shorter-term CDs is a smaller early withdrawal penalty. CDs with terms from 1 to 4 years have an early withdrawal penalty of up to 180 days of dividends. CDs with terms of 5 or 7 years have a EWP of up to 365 days of dividends. Note, the penalty doesn't eat into the principal so if you redeem the 5-year CD before 365 days from the issue date, you'll just lose all of the accrued interest. Please refer to PenFed's disclosure for more details (bottom of PenFed's Money Market Certificate page).

PenFed Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (one-time $20 fee) or by joining the Voices for America's Troops (one-time $15 fee). Joining one of these organizations and joining PenFed can be done at the same time all online.

To join PenFed, click on the "Join PenFed" link at the top of any PenFed page. This will take you to the start of the online application. That first page asks about eligibility. If you don't qualify via any of the listed options, click "None of the above". A popup informs users that "We can establish your membership eligibility through either National Military Family Association or Voices for America's Troops." When you close the popup, you are then asked to select one of these two organizations.

Branch Locations

Accounts can be opened online, but for those who prefer opening accounts in an office, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New York, North Carolina, Hawaii, Puerto Rico and Texas.

Financial/NCUA Info

PenFed is the third largest credit union in the nation. It has $12 billion in deposits. PenFed has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 3.48% (excellent) based on June 2012 data. Please refer to our financial overview of PenFed for more details. It's federally insured by the NCUA (Charter # 227).

How These New CD Rates Compare

PenFed has a long history of being a rate leader for long-term CDs, but its short-term CDs have rarely been on top. With these new rates, PenFed is on top or near the top for 1-, 2- and 3-year terms.

PenFed's 1.26% APY 1-year CD is now the highest 1-year CD rate that's nationally available. The next highest is 1.12% APY at Airbanking.

For a 2-year term, Sandia Laboratory FCU has the highest CD yield of 1.51% APY, but this requires a $200K minimum. The yields for a $100K minimum is 1.41% and the yield for a $50K minimum is 1.31%.

For a 3-year term, PenFed is tied with Sandia Laboratory FCU with a 1.61% APY. The highest yield is 1.75% APY at Connexus Credit Union, but this requires an active checking account.

The above rates are accurate as of 11/1/2012.

Searching for the Best CD Rates

To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com:

Edit: Corrected branch locations.

Related Pages: CD rates, IRA rates

Related Posts

Anonymous   |     |   Comment #1
PenFed has been offering 1.49% 5 year auto loans. I would bet that with the certificate rate change that these will go up. They can't borrow money at 1.71% for 5 years and lend it out at 1.49%.

One other factual point, they no longer have a Colorado branch. It closed a couple of years ago.
ohpleez   |     |   Comment #2
minor point, similar to #1, they don't have a NJ branch
Anonymous   |     |   Comment #3
Wow, this is great! So on a 5 year CD at 1.71% one would only be losing around 2-3% per year in purchasing power to inflation..............or losing approximately 10-15% for the 5 year duration. Sign me up for this great deal! :)
Michelle   |     |   Comment #4
I agree with anonymous # 3 sarcastic commenet!

We savers are getting ****ed because of the deadbeats and the ponzi scheme going with the crooked federel reserve!
KenBDG   |     |   Comment #5
Thanks Anon #1 and #2. I've removed CO, NJ and MO as states where they have branches. It appears they have done quite a bit of branch consolidation over the last few years.
Anonymous   |     |   Comment #6
I have a bunch of old 7 years at 3.25% that will mature in 4 years or so.  Is this bank like ally now where they can dissalow an early withdrawal, or are they at least still honest unlike Ally?
KenBDG   |     |   Comment #7
PenFed did the honorable thing last year when it increased the early withdrawal penalty on the 5-year CD from 180 days to 365 days of interest. The change applied only to new CDs or CDs that were rolled over. It did not apply to existing CDs.
ChrisCD   |     |   Comment #8
Yes, savers are having to take it in the shorts, but at least PenFed is trying to lead the way with higher rates then their competitors.  It is nice to finally see a credit union with top rates in the lower tiers.  They love to claim they have lower loan rates and higher savings rates, but far too often they end up just looking like their bank counterparts.
Anonymous   |     |   Comment #9
pen fed is one of the best in the country, i have all of their credit cards no problems at  all , cust svc is the best
Anonymous   |     |   Comment #10
Actually Pentagon Federal Credit Union has had auto loans for .49% for on line applications.
Anonymous   |     |   Comment #11
#10 - the 0.49% is only if you use their car buying service for a new car.

1.49% is for all other loans INCLUDING used cars - which is pretty insane. 
Anonymous   |     |   Comment #12
Agree with #8. 

Today I opened the 1yr CD 1.25%.  It isn't great, but I have had these funds in Tiaa which also pays 1.25%, and could drop that rate at any time.  I have a large amount in FNBO paying 1.35% but only good until 12/31/12.

So, what the heck!  This CD will mature 11/2/13. 
Anonymous   |     |   Comment #13
I opened the one year at Pentagon yesterday, hard choice 1 year at 1.25% or a 7 year for 2%...hahaha
Anonymous   |     |   Comment #14
#13:  The way I look at it is if I am not of the makeup to purchase stocks, bonds or other investments then at least if I purchase the CDs I am getting "something" for the money.  I go for the longer term and anything I could get for 2% or more.  It may not be the best but it's better than getting no return on savings.
Anonymous   |     |   Comment #15
#14  I don't believe rates will be this low for that much longer so I will not open anything that long, I don't want to have to worry about closing my CDs early and the bank or credit union says no.... not worth it imo.
Anonymous   |     |   Comment #16
Btw, I remember when I was getting 6.5% from pentagon, doesn't seem that long ago. A lot of things can happen in a couple years.
Anonymous   |     |   Comment #17
#16, I also remember those high rates!

 I had to pull up an old account with PenFed and I had exactly $6.15 in it.  That made it easy to open the 1yr  1.25% CD.  Like an earlier comment, I think rates might start to rise.  (someday)
Anonymous   |     |   Comment #18
For my credit card the service is the worst (Penfed).  I sent a payment in for my credit card 12 days before it was do. I did make a mistake and did not sign the check.  I noticed a problem on the next statement.  I called and they said they had no idea what happened.  I called the company that wrote the check and they told me that PEnFed would not honor because was not signed.  Same day in the mail they (Penfed) sent me a copy of the check saying unsigned.  After going to a supervisor I was able to get the fees wavied (After 3 calls).  They also reduced the rewards program.  So I got another card that has the same benefits from another company except for gas,  I still use the PENFED for gas as I get 5% back. On the new card they send the cash to my TIAA CRef savings account.
Anonymous   |     |   Comment #19
I would maybe go for the 3 year.  That's the longest I'm doing now.  I did get a 30 month from Salem 5 for 1.5% a week ago.
Anonymous   |     |   Comment #20
Just a thanks Ken .. This site is great!