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2.17%$1k-PenFed Credit Union7 Year Money Market Certificate
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Accounts mentioned in this post. Rates as of August 22, 2017.

PenFed Increases CD Rates Again - Top 1-, 2- & 3-Year CD Rates


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 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 3.55% (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:

Related Pages: CD rates, IRA rates

Related Posts

Paoli2   |     |   Comment #1
Penfed's 3 year CD seems to be the best, imo, for those not wanting to tie up funds longer.  The fact that Penfed is raising rates gives me hope that maybe it will be followed by other banks and/or cus doing the same before long.  Sure hope so!
Shorebreak   |     |   Comment #3
PenFed still has it's excellent auto loan rate when purchasing an Enterprise used vehicle:

  • Online only  0.00% APR* for 48 months  
  • Online only 0.49% APR* for 60 months 
  • Available for purchase of used vehicles 
  • When you finance an Enterprise Car Sales vehicle with PenFed 
  • 12 to 60 months financing for up to $70,000
The online only new auto loan rate of .49%, when utlizing the PenFed buying service, unfortunately went away Jan 1st.
scottj   |     |   Comment #6
Was easy for me to look like a genius on the CDs i locked in over the last 5 years since rates were always going down, now comes the tough part of picking ones as rates start to rise 
shucks   |     |   Comment #8
Family just opened up 2-yr @ 1.5% last week w/large sum (almost $90k). How do the penalties work @ PenFed? I'm wondering if it's worth it to close after 1 week and take any penalties for the extra .10% over 2 years at $90k. ?
Anonymous   |     |   Comment #9
Well, Pen Air FCU was the 5 year leader, they just lowered their 5-year regular CD rate to 1.85% APY from 2.0% APY. Not sure what the 5-year Jumbo rate would be now but adding a presumed .20% would equate to a 2.05% APY for 5 years. 
decades   |     |   Comment #10
shucks...penaltys are not usually more than interest earned so far
Anonymous   |     |   Comment #11
Wow! So on a new $1 million CD...............you're able to get an extra grand a year from this raise. How thrilling! A real life changer, I'm sure. :)
Shorebreak   |     |   Comment #12
RE: shucks (anonymous) - #8, Wednesday, January 2, 2013 - 12:12 PM

Figure out the penalty and see if it's really worth it to you. If redeemed within 180 days of the issue date or any renewal date, all dividends will be forfeited. If redeemed thereafter, but before the maturity date, dividends for the most recent 180 days will be forfeited. The difference in compounded yield at the end of two years would amount to $185.66 between the rate difference. That's a tremendous $7.74 per month (about the price of a 6-pack) on a $90k certificate.
shucks   |     |   Comment #13
Actually, we decided to close the CDs and reopen them. Since we just opened them a couple days ago, at most we lost under a dollar in interest, but will get, as someone pointed out, about $180 or so more. PenFed was great. They let us close the CDs that we just opened (forfeiting only the 3 days of interest, nothing else) and reopen them at the higher rate. Because these are special Money Market CDs, you CANNOT take money out later with a penalty and still keep the CD open -- if you need any money from the CDs, you must completely CLOSE the CDs, so what we did was instead of opening up one large CD, we split them into two CDs for the same term (one pretty large, and one with just a little bit). That way if there's an emergency and we need just a little bit, we can close (as we'd be foreced to do) the small CD and still keep the large one in place. At any rate, kudos to PenFed. And to Ken here for this site!
Shorebreak   |     |   Comment #14
RE: shucks (anonymous) - #13, Wednesday, January 2, 2013 - 8:40 PM

You had only one cerificate to deal with. If one had opened a laddered portfolio last month, consisting of equal amounts of funds maturing in a range from 1-year through 5-years and a 7-year certificate, it would have been a bit more of a headache for both the customer and customer service representative.
Anonymous   |     |   Comment #15
   The comments here show this blog at its best and its worst.  They started out with one poster (whose post was removed) attacking another, but eventually got around to one poster helping another--and the rest of us as well--and conveying important insight into PenFed in the process.  I'm in much the same position as shucks, having opened 3-year CDs on 12/31/12 at 1.75%.  I may try the closing and reopening technique today--then maybe I won't.  At least I got some valuable information out of the exchange.  We need more of that here.
Anonymous   |     |   Comment #16
Seems like the 1 year CD is the only one that makes sense.  Realistically savings rates are pretty much nil now anyway so why put your money into a CD for more than a year.  The 25 basis points jump for the 1 year is much more attractive than the 10 basis point jump for the other options.
Anonymous   |     |   Comment #17
I usually put my money in CDs that pay the amount of interest "I" need for my finances.  If I have to go out 5 to 7 years for the amount, I will.  This may not be the best direction for others but it's what has always worked for me.  I just don't see interest rates going up much in the next few years so I am sticking with my methods and staying away from these paltry rates the 1 years are offering.  We all should know what works best for us and that is what we should do, imo.