After two months of special CD rates, I was worried Pentagon Federal Credit Union (PenFed) would not extend the specials into January. So I was pleasantly surprised to see the new January CD rates at PenFed this morning. The 1-year CD rate had the biggest increase. It went up from 1.00% to 1.25% APY. The CD rates from terms of 2 to 5 years went up 10 basis points. The 7-year CD rate remains the same. This now makes PenFed's 1-, 2- and 3-year CD rates the clear nationwide leaders. It's interesting to see PenFed putting more emphasis on its short- and mid-term CDs rather than its long-term CDs. The 7-year and 5-year CD rates are still competitive, but there are other credit unions that offer similar rates. In past years, PenFed's long-term CD rates had been the most competitive ones.
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 1/2/2013.
- 2.00% APY 7-year (no change)
- 1.90% APY 5-year (was 1.80%)
- 1.85% APY 4-year (was 1.75%)
- 1.85% APY 3-year (was 1.75%)
- 1.60% APY 2-year (was 1.50%)
- 1.25% APY 1-year (was 1.00%)
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.
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.
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.
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 3.55% (excellent) based on September 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
For CDs nationally available, PenFed is now the rate leader for CD terms from 1 to 4 years. The best 1-year CD rate at an internet-capable bank is 1.05% APY at CIT Bank and at a few other banks. The best 2-, 3-, 4- and 5-year CD rates at an internet-capable bank is at Citizens State Bank in Florida. Its rates include a 1.36% APY 2-year CD, a 1.50% APY 3-year CD, a 1.77% APY 4-year CD and a 2.00% APY 5-year CD. Most of these are Jumbo CDs. For all-access credit unions, Pen Air Credit Union still has the best deal for 5-year CDs. It has a 2.20% APY for a Jumbo CD and a 2.00% APY for a regular CD.
The above rates are accurate as of 1/2/2013.
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: