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CD Rate Hikes at PenFed, 1-Year CD Now Competitive


PenFed finally had some CD rate hikes. It’s nothing to get excited about, but it’s nice to see CD rate hikes at PenFed. PenFed had some super competitive CD rates early this year, but since that time, the rates have gone way down. The most noteworthy rate hike was on PenFed’s 1-year term. The yield increased 26 basis points to 1.06% APY which makes the 1-year CD competitive as compared to top 1-year CDs at internet banks. The other new CD rates aren’t as noteworthy since you can get much higher rates at several internet banks. Below is a summary of the new September rates and how they changed from August. I’ve included the early withdrawal penalty for each term:

  • 1.06% APY 1-yr (was 0.80%) EWP: up to 180 days
  • 1.05% APY 2-yr (was 0.90%) EWP: up to 180 days
  • 1.05% APY 3-yr (was 1.00%) EWP: up to 180 days
  • 1.05% APY 4-yr (was 1.00%) EWP: up to 180 days
  • 1.21% APY 5-yr and 7-yr (no change) EWP: up to 365 days

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

1.21%$1k-PenFed Credit Union1 Year Money Market Certificate
Accounts mentioned in this post. Rates as of October 27, 2016.

Minimum deposit is $1,000. The rates are also available in an IRA and a Coverdell Education Savings Account. 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 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. Our PenFed overview section has more details on PenFed’s membership qualifications.

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 "Other". Text will appear which informs users that "Members of the National Military Family Association and Voices for America's Troops are among those eligible for PenFed membership. We've made it easy for you to join one of these associations, which makes you eligible to join PenFed." Below the text you can 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 $13.9 billion in deposits. PenFed has an overall health grade at DepositAccounts.com of A with a Texas Ratio of 2.89% (excellent) based on June 2014 data. Please refer to our financial overview of PenFed for more details. It's federally insured by the NCUA (Charter # 227).

How The 1-year CD Rate Compares

You can get slightly higher 1-year CD rates at a couple of credit unions and internet banks, but those rates aren’t that much higher.

Interest Rate CD Length Institution
1.15% APY (w/active chk) 12 Month CD Melrose CU (nationally available)
1.10% APY 12 Month CD ableBanking (nationally available)
1.06% APY 12-Month CD PenFed (nationally available)

The above rates are accurate as of 9/2/2014.

To look for the best nationwide rates and the best rates in your state, please refer to our CD rates table and IRA CD rates table .

Related Pages: CD rates, IRA rates

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DCGuy (anonymous)   |     |   Comment #1
My 1 year CDat Pen Fed is due to mature in a few weeks.  Maybe a coincidence?
Anonymous   |     |   Comment #2
I fully expect mediocre rates at PenFed until they once again need additional deposits to fund  new loan programs.
Anonymous   |     |   Comment #3
Meh. I used to love PenFed, but now their rates are horrible, their credit card de-valued its points, they are adding fees for things that are hard to avoid. Sad to see them slump like this.  But, the slight increase in CD rates is a good thing, although I will not make use of it (until it's much higher than this).  Thanks!
hoho (anonymous)   |     |   Comment #4
Have to wait till year end to see if they offer any high rate CD's.  
LW (anonymous)   |     |   Comment #5
Ken, Once again thanks for the heads up on the 3% five year back in December