In the past nine months, the rates on Pentagon Federal Credit Union’s (PenFed) CDs have been on the move, both up and down. I summarized an across-the-board CD rate increase in a September 2014 posting, noting that at the time, the 1-year CD had the most competitive rate of all the PenFed CDs.
(Note: the official PenFed title is "Money Market Certificate," but they are essentially Certificates of Deposit (CDs), with fixed rates for specific terms. For ease of understanding, I have opted to use the term "CD.")
PenFed began October with another rate increase on all CDs, with the 1-year CD, once again, the most competitive. The minimum deposit on all of PenFed’s CDs is $1K and there are no maximum balance caps. The CDs are also available as IRAs (Traditional, Roth and CESA) with the same rates, but while the Traditional and CESA both require a $1K opening deposit, the Roth can be opened with $25.
Below is a summary of the rates on PedFed’s CDs for the last three months.
|Term Length||August 2014 Rate||September 2014 Rate||October 2014 Rate|
|1-year CD||0.80% APY||1.06% APY||1.21% APY|
|2-year CD||0.90% APY||1.05% APY||1.31% APY|
|3-year CD||1.00% APY||1.05% APY||1.36% APY|
|4-year CD||1.00% APY||1.05% APY||1.41% APY|
|5-year CD||1.21% APY||1.21% APY||2.12% APY|
|7-year CD||1.21% APY||1.21% APY||2.32% APY|
According to PenFed’s Savings Account Overview, the Early Withdrawal Penalties are as follows:
Certificates having a term of 1 year up to and including 4 years
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.
Certificates with a term of 5 years or greater (applies only to certificates issued or rolled over on 3/15/11 or later)
If redeemed within 365 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 365 days will be forfeited.
Thanks to DA Member vjrampello for a Forum posting on PenFed’s rate change.
While the name "Pentagon Federal Credit Union" would suggest a field of membership limited to those in the military, PedFed membership is actually quite wide and varied, allowing for almost anyone to join. PenFed’s Membership Eligibility page lists the following options to qualify for membership:
I am in the United States Military and Uniformed Services.
I am an employee of a qualifying organization (151 listed).
I belong to the following association or organization (54 listed).
I am an employee of the United State government.
I am a relative or housemate of someone who is eligible.
I live or work at an eligible location (20 military bases).
Other (joining Voices for America’s Troops or National Military Family Association)
Membership application and/or opening a CD can be done online, or in person at any of 31 branch offices located in the District of Columbia, Florida, Hawaii, Maryland, Nebraska, New York, North Carolina, Oregon, Tennessee, Texas, Virginia, Guam, and Puerto Rico. I have not included a link to PenFed’s Membership Application page because it is time sensitive and closes after 3 minutes of inactivity; instead, please use PenFed’s home page as a starting point.
Credit Union Overview
Pentagon Federal Credit Union (NCUA Charter # 227) has an overall "A" health rating on DA, with a Texas ratio of 2.89% (excellent) based on June 30, 2014 data. In the past year, PenFed's total deposits have grown by $1.46 Billion, an excellent growth rate of 11.65%. Please refer to our financial overview of PenFed for more details.
Established in 1935, PenFed is the nation’s 3rd largest credit union, with assets in excess of $18.3 Billion and a membership of 1.3+ million members.
How the Rates Compare
When compared to other similar length of terms CDs tracked by DepositAccounts.com, with a $1K minimum deposit and available nationally, Pentagon Federal Credit Union’s 1-year and 2-year CDs are competitive:
|Interest Rate||Account Type||Institution|
|1.25% APY||12-month CD||Citizens State Bank (FL)|
|1.21% APY||1-year Money Market Certificate||Pentagon Federal Credit Union|
|1.10% APY||12-month CD||Nationwide Bank|
|Interest Rate||Account Type||Institution|
|1.55% APY||24-month CD||Citizens State Bank (FL)|
|1.31% APY||2-year Money Market Certificate||Pentagon Federal Credit Union|
|1.27% APY||2-year CD||ableBanking|
The above rates are accurate as of 10/3/2014.
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.