Featured 1-Year CD Rates

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2.17%$1k-PenFed Credit Union7 Year Money Market Certificate
2.12%$1k-PenFed Credit Union5 Year Money Market Certificate
1.81%$1k-PenFed Credit Union4 Year Money Market Certificate
1.76%$1k-PenFed Credit Union3 Year Money Market Certificate
1.51%$1k-PenFed Credit Union2 Year Money Market Certificate
1.31%$1k-PenFed Credit Union1 Year Money Market Certificate
0.85%$1k-PenFed Credit Union6 Month Money Market Certificate
Accounts mentioned in this post. Rates as of August 18, 2017.

Higher CD Rates at Pentagon Federal Credit Union


The one-time CD rate leader, Pentagon Federal Credit Union (PenFed), made substantial rate increases on its long-term CD rates for September. However, the rates had been so low, the new CD rates are still far from the rate leaders. Nevertheless, it’s yet another sign that long-term CD rates are rising. Since so many DA readers are PenFed members, I thought it would be useful to review the rate increases even though the new rates are not exciting. Below are the new rates as listed in PenFed’s certificates page and IRAs page as of 9/2/2013:

  • 1.76% APY 7-year CD (was 1.25% APY)
  • 1.56% APY 5-year CD (was 1.15% APY)
  • 1.41% APY 4-year CD (was 1.10% APY)
  • 1.26% APY 3-year CD (was 0.94% APY)
  • 1.00% APY 2-year CD (was 0.74% APY)
  • 0.50% APY 1-year CD (no change)
  • 0.30% APY 6-month CD (no IRA) (no change)

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. The early withdrawal penalty is up to 180 days of interest for terms from 1 year to 4 years. The penalty is up to 365 days of interest for terms of 5 and 7 years. The penalty doesn’t eat into the principal. For example, if you withdraw principal before 1 year on a 5-year CD, you’ll lose all interest but none of the principal.

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.

Credit Union Overview

PenFed is the third largest credit union in the nation. It has $12.5 billion in deposits. PenFed has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 3.17% (excellent) based on June 2013 data. Please refer to our financial overview of PenFed for more details. It's federally insured by the NCUA (Charter # 227).

How These CD Rates Compare

These new PenFed CDs are still far from the rate leaders. Most of PenFed’s past CD promotions have took place around January. So perhaps they will again be leaders in a few months.

Internet bank CDs and brokered CDs currently offer the best long-term CD rates. The best 5-year CD rate is 2.05% APY at iGObanking.com as of 9/2/2013.

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

Shorebreak   |     |   Comment #1
It's a small start. PenFed has a long way to go to compete with long-term rates at  Randolph-Brooks Federal CU, for example. Their 7-year yield is 2.17%.
Anonymous   |     |   Comment #2
No way I would lock up money in a CD for 7 years around 2%.   Now I said the same thing when PenFed had the 10 year CD a few years ago ay 5%.  But that turned out to be a good thing.
lou   |     |   Comment #4
#2, why is it a good thing you didn't buy the 5% 10-year Penfed CDs? Not sure I follow your reasoning.
Anonymous   |     |   Comment #5
#4  At the time I thought it may have been a mistake.  Now with the way rates are it was a good decision
Anonymous   |     |   Comment #3
Well, PenFed's certainly taking no chances with stiff-penalty, long-term CD's that ensure negative real returns for anyone so risk-averse as to buy them.
moneysaver   |     |   Comment #6
When PenFed was offering the 5%, 10 year CDs, I had some other non PenFed CDs maturing in a few months, but it was going to be after the 5% offer expired.

So I short-term borrowed some money from family members (to cover me until my upcoming CDs matured), and I put all the available cash I had at the time for potential CD investments into the PFCU 5%, 10 year CDs.

And, I'm darned glad I did. They've been a blessing these past couple years, and will continue to be so for many years to come. It's likely to take a long time from now, if ever, until whatever future point long-term CD rates are going to rise above the 5% level again.

And even if they do exceed 5% at some point before my 10-year PFCU CDs mature, I won't sweat it, as I'll have other funds available for investment then. But at least I know, for my budgeting purposes, I've got a good chunk of money guaranteed to earn 5% for the long-term.

And I can sleep well at night knowing that, no matter what else happens with the markets and interest rates. The only thing I worry about is earning LESS than 5% on my funds... not that I'm earning 5% and might sometime be able to do better.
rosie43   |     |   Comment #7
I believe most of Pentagon Federal's CD's paying 6% or more APY's are starting to mature and all will be maturing in the next year or two. I am hoping for those that want some good paying CD's will be able to go back to Pentagon for those CD's.
Anonymous   |     |   Comment #8
It's about time the high CD rates are expiring for the lucky few that keep "bragging".  Then, they will know what it's like to live like the rest of us.
moneysaver   |     |   Comment #9
The 10-year, 5% PFCU CDs that they offered as a kind of special have another 8 years to run, I believe.

As for the notion of bragging, anyone who was lucky enough to grab those CDs for the short time they were offered still likely has other funds in other investments and cash these days that still need to be turned over, and face the same lousy market rates as everyone else faces.

I think all of us know perfectly well what it's like to have money that's not earning as much as we wish it were.

paoli2   |     |   Comment #10
Nope Rosie, I need to get another CD this week and Penfed is not where I am getting it.  Their rates are stinky low right now.  I am gasing up the car and heading quite a few miles tomorrow to get the CD.  Rates are pathetic right now.  So if you call Penfed you may be in for a big disappointment.
Anonymous   |     |   Comment #11
Paoli2:  Vanguard and Fidelity both have 3.25% 10yr.
paoli2   |     |   Comment #12
#11  I know about Fidelity and Vanguard's 10 year rates but unlike many on here, I use our interest for income and don't know if the brokerages would mail us monthly or quarterly interest checks like the banks do.  I have never tested them out on CDs except for the ones in the IRAs.  Under no circumstances would I want to tie into a 10 year CD from a brokerage.  No one knows what emergencies are awaiting us in the future and I would never want to have to try to sell any of their CDs on the secondary market.  It's not a done deal that this can be done and one can lose a good deal of the principal amount in order to make it worth while to a buyer.  I would rather pay a penalty and know I have all of my money back if the need arises.  The CD I am going after has a 6 months penalty for a 5 year CD and that is what my criteria is.  Thanks anyway for thinking about me but 10 year CDs are out of the ballpark for what I am willing to buy even if the rate is higher especially if they are with brokerages.
Anonymous   |     |   Comment #13
If we have emergencies that bad you'll have more to worry about than getting your money from your CDs, like the apocalypse.
Anonymous   |     |   Comment #14
#13  What you consider an emergency and what I do may be two entirely different scenarios.  My emergencies are usually to help family members and that is not exactly an apocalypse.  Getting your money back from a brokerage CD is not as quick as just paying an EWP and getting a check that same day.  No thank you.  When I need my money back, I have to know I can get it quick.  BTW, in all the years I have purchased CDs it is not very often I have had to cash any in early.  However, one never knows.
OldGuy   |     |   Comment #15
Paoli2:  I'm in the same position as you vis-a-vis withdrawing CD interest after it's paid.  This is simple on both Vanguard and Fidelity.  Your CD interest is paid automatically into your "sweep" account.  From there, you can electroically transfer it to your bank checking account via the brokerage's website.  I do it all the time, without hitch.

As for 10 year CDs, I'm staying away from them--at least until the rates go up to 4%, which may be never again.
paoli2   |     |   Comment #16
Old Guy:  Thanks for the education on our brokerages.  I thought that might be the way to do it but it would mean opening up a seperate account for the personal CDs.  I just never felt I needed to do that when CD rates were so good before.  I am now seriously thinking towards that end but I still would steer away from 10 year CDs.  I guess maybe instead of calling myself "Paoli" I should change it to "Old Gal". :) The older I get the more concerned I am about where I am putting the money in case I take part of this earth before I get to reach a ripe "old" age.  When I was much younger, you would not believe the places I sent it to.  I had more courage then and no DD to be concerned about.  Things changed.
Shorebreak   |     |   Comment #17
For the deposit account portion of your portfolio, ladder your individual accounts and forget about it. Either rates go up and you are happy or rates remain stagnant and you are glad you are getting around 2 percent on one of your longer term CDs.
OldGuy   |     |   Comment #18

There are a lot of things to dislike about brokered CDs, but they're becoming less important to me.

For example, I don't like most brokered CDs because the good ones rate-wise usually only pay interest semi-annually.  I prefer monthly or at least quarterly.  However, the spread that's developed at the same banks for 5-year maturities (e.g., Discover pays 2% for a brokered 5-year CD, only 1.50% for a direct 5-year CD) has got me buying more brokered CDs for my non-IRA portfolio.


And, if it's any comfort, the disclosures for brokered CDs on Fidelity and Vanguard say the CDs "generallY" have a "survivor option"--so, if you die, the bank is supposed to pay the CD off at par if your executor demands it.
Anonymous   |     |   Comment #19
Amazing that PenFed's 3-year rate was 1.85% just back in February.  And it fell all the way to 0.94% in less than 6 months.  Glad I loaded up on those 3-years earlier this year.  This rate environment continues to be atrocious.
Smokeboat   |     |   Comment #20
Sure be glad when the savings rates head northbound....this cheap beer is starting to taste good.  No problem sleeping at night so far but thanks for the concern.
Anonymous   |     |   Comment #21
!0 Yr UST bond at 2.85 today...roughly a 3.40 or so effective return in UST tax exempt states, which is the highest point in some time....false alarm again or on the rise for real?
mustsavemore   |     |   Comment #22
At least all you guys have enough money to buy CDs.  Some of us like me wish we had enough money to buy a CD.  I'm lucky to just get money in my bank account, let alone set aside money for a CD.  That sounds like a pipe dream to me.

paoli2   |     |   Comment #23
Must Save:  Is your savings problem that you just don't bring in enough money to save or you never disciplined yourself to save in your youth?  Those of us who seem to have funds to buy CDs with are probably ones who started many years ago "on their own" to find ways to save by living a very prudent life that maybe you weren't prepared to live.  If you happen to be one of those who "lives for today" then you can't complain if you wake up one morning and there is not much in your financial cabinet.  I just went over 100 miles today to get the 5 year 2% CD rate that no other bank any closer in my state would give me and I spent weeks finding the ONE bank that would.  Is this the way you are willing to live your life?  Before you think we are doing so great having all our CDs, think about what it may have taken to discipline our lives and families to be able to get to this point financially.  I am exhausted now but I got what I set out to get and I didn't have to go out 10 years or use a brokerage or internet bank.  We all have our preferences. 
Anonymous   |     |   Comment #24
paoli - How's the Bank of Hindman?

paoli2   |     |   Comment #25
#24  What is it with you and the Bank of Hindman?  That is not where I got my latest CD.  It is a bit out of my radius  and I found a bank closer.  Why don't you give them some business.  I think they might still be on Ken's list.
Anonymous   |     |   Comment #26
paoli - I was only asking you about the Bank of Hindman.  I don't care where you got your CD.
paoli2   |     |   Comment #27
#26  Why would you think I know anything about the Bank of Hindman?  Ken probably has info about it someplace with his bank reviews if you are interested in it.  I have never done business with it or I would be glad to share info with you.
AnnP   |     |   Comment #28
Yes, rates are lousy..I never got the offer of the long term CD since mine wasn't comming due.  (I have a card with them that I get 5% cash back on gas.)

Last month they said that they will start charging for paper statements.  This month I just got an

e-mail that says "unless I have an account ie: (a sucky rate CD, IRA, etc.) "I will be charged an annual fee of $25 and will also only get 3% at the pump."
Anonymous   |     |   Comment #29
This is one hell of a way for seniors to be living.  Instead of the so called "golden years" many are spending all their time searching web sites to find "acceptable" interest rates, while others are driving hundreds of miles to get a 2% rate.  The ones who DID NOT contribute to the crisis are being punished so the spenders can have low rates to feed their care free life styles.

The Feds have this idea that seniors have multi-trillion dollars saved in retirement accounts.  There we go again, pick on the seniors who worked for 45 years.  The government wants our retirement just as they are trying to take our social security.  BTW, the SS taxation started with the Regan administration.

Wake up Obama, our children are our future.  BUT they need to work for it.  No more silver (gold) spoons.  Let them live within their means.
Anonymous   |     |   Comment #30
A suggestion: ladder your CD's so that you eventually are renewing them at 5 year terms... averages out your return. Start out by spreading and investing equal amounts into 1,2,3,4,and 5 year maturities. Mine are laddered now such that each year, I invest the ones maturing and coming due for renewal into 5 year terms... not too far out, but far enough to kind of maximize whatever highest rates are available at the time. I agree 2% is nothing to rave about, but consider the beating people took in the the stock market during the "lost decade"... during the 2000 through 2010 years many people were taking losses in the 30 to 40% or more range, and that didn't even factor in inflation. Consider who was better off... the stock market investor or the CD holder with his 1 to 2% return? I'm glad I was in CD's... made going to sleep at night a lot eaiser.