PenFed lowered most of its CD and IRA CD rates for the start of November. It’s a disappointment, but we still have December and January. I don’t know if PenFed will offer higher rates then, but it has been more common for PenFed to offer very competitive CD rates in those months rather than in November. For example, last year PenFed came out with several top rates including a 3.04% 5-year CD on December 1st. These rates remained in effect through January. Not all PenFed CD specials began in December. They have often began in January. Remember those 6.25% CDs? PenFed launched those right before the 2007 New Year.
Regarding the new November CD rates, the only CD rate that increased was the 3-year term. That went up 20 basis points to 1.56% APY. Below is a table showing how the CD and IRA CD rates changed for November: Thanks to DA member Shorebreak who first posted on these new rates in the DA forum.
|Term Length||November 2014 APYs||October 2014 APYs||Change (bps)|
|6 month||0.30%||0.30%||no change|
|2 years||1.31%||1.31%||no change|
The above November rates are based on the rates listed at the PenFed Certificates Overview page as of 11/3/2014. Note, when PenFed first posted its November rates on Saturday, the CD rates were slightly different than the IRA CD rates. That appears to have been a mistake. Today the CD rates were changed to match the IRA CD rates which are listed above.
PenFed calls their CDs "Money Market Certificates", but they are essentially certificates of deposit (CD) with fixed rates for specific terms. Likewise, PenFed calls IRA CDs "IRA Certificates".
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 and the early withdrawal penalty, please refer to my October 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 $15 fee) or by joining the Voices for America's Troops (one-time $14 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.
Accounts can be opened online as I described above, 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
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 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 3-Year CD Rate Compares
Since PenFed’s 3-year CD rate is the only one that’s strongly competitive, I’ll just compare that one to other top nationally available CDs.
|APY||CD Type||Minimum Deposit||Institution|
|1.66% APY||3-year CD||$5,000||Melrose Credit Union|
|1.60% APY||3-year CD||$500||First Tech Federal Credit Union|
|1.56% APY||3-year Money Market Certificate||$1,000||Pentagon Federal Credit Union|
|1.55% APY||3-year CD||$100,000||Nationwide Bank|
The above rates are accurate as of 11/3/2014.
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.