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PenFed’s New November CD Rates


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
1 year 1.00% 1.21% -21
2 years 1.31% 1.31% no change
3 years 1.56% 1.36% +20
4 years 1.36% 1.41% -5
5 years 1.76% 2.12% -36
7 years 1.76% 2.32% -56

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 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 $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.

Branch Locations

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.

Related Pages: CD rates, IRA rates

Related Posts

Anonymous   |     |   Comment #1

gregk   |     |   Comment #2
Even if PenFed increases rates in Dec and/or Jan (no sure thing in my view) I think we can forget about anything close to the 3% 5 & 7 year yield of  a year ago  (though that would seem more sensible now than it did then), in which case I've got my 7 year 3% Toby "add on" CD in reserve that Jan might just be the right time to more fully fund. 
Anonymous   |     |   Comment #3
Or if you have IRA's at Navy credit union---They also have offered this option in the past.  I have been able to do this to get a higher rate by taking money from
Pen Fed accounts and transferring them to Navy. Will call in Jan to see if it still is being offered. 
Kaight   |     |   Comment #5
Nothing snarky intended here, just my opinion.  I believe it is FAR too early to begin going into Toby in a serious manner.  Many of us have the account, of course, and we are holding it in reserve.  In my view the very earliest one might reasonably decide to make a significant Toby commitment would be almost exactly two years from right now, following and depending upon the results of the 2016 Presidential election.

Off topic observation:

It stinks that Toby is changing its name.  I love referring to Toby as "Toby".  It's sort of fun.  :-) 
Anonymous   |     |   Comment #6
But, isn't the issue "where to park the money" until then?
henry (anonymous)   |     |   Comment #8
cd rates = nothing to do with presidential election? ugh
Kaight   |     |   Comment #11
So the direction of America's political leadership has nothing to do with our economy?  Did Bush's malfeasance not result in the disastrous economic events of 2008, with the resulting impact on interest rates?  Has Obama's low/no-growth policy not given us the current low interest rates.  Do you not remember Carter's "malaise".  Do you not recall Reagan's remarkable recovery, which increased demand for money and took interest rates north?

Political leadership has nothing to do with economic outcomes?  That's silly and is contrary to reality.
Anonymous   |     |   Comment #4
Ken, Once again I thank you for letting us know about that 3.04 last December
Anonymous   |     |   Comment #7
If penfed is going to come out with higher rates it will be Dec or Jan if not, good luck.
Anonymous   |     |   Comment #9
I'll be stunned beyond belief if PenFed raises rates in Dec or Jan to anything close to the 3% on the 5yr we saw last year.  Not gonna happen folks.
soukupri   |     |   Comment #10
I agree. Last year was a fiasco for them dealing with people closing and opening CD's at a higher rate. Also the internet communicates these offers to a large base and the institution s become overwhelmed. I still don't understand how last year they were giving such high rates compared to other CU's and banks. Of course I took advantage of the rate. I think this year they will be more conservative.
gregk   |     |   Comment #13
The thing is though, since many members have CD's maturing during those months, if their rates aren't competitive a big outflow of funds might result.
Anonymous   |     |   Comment #15
If they offer a rate that is at or near the top rates the money would probably not flow out.  The top 5 year is around 2.3%.  They could offer 2.5% and be the highest rate available.  They don't have to offer a rate over3%
Sarah H. Evans
Sarah H. Evans (anonymous)   |     |   Comment #16
Thank you #15.  I will recommend that highly to our rate committee here at the Credit Union.

Sara Evans
Pentagon Federal Credit Union
Anonymous   |     |   Comment #17
#15 had a typo...they could offer 3.5% be competitive and on the leaderboard
Anonymous   |     |   Comment #18
It was no typo. 
gregk   |     |   Comment #19
Forget it Sara if you think 2.5% will get anyone but #15's money.  The rest of us here have a 3% floor.  A likely imposter pulling our leg in any case.
soukupri   |     |   Comment #20
Where would they put their money? If they have 2.5% that would be one of the top rates. I doubt you will see 3%. Penfed probably got more than enough funds last year to take care of their operations for a while but was done at a higher cost than any other bank or CU.
SJ (anonymous)   |     |   Comment #21
Looking forward to a Christmas present from PenFed Rate Committee exceeding last years generosity. I disagree with #15. For 2.5% we could still sit on the sidelines. Happy Holidays. By the way, very easy to deal with PenFed long distance over the internet. I applaud you all at PenFed.
gregk   |     |   Comment #22
You apparently forget, #20, that PenFed is a credit union owned by its members, and not some profit-oriented entity aiming to squeeze out every drop of bottom-line performance for their external shareholders.  When PenFed has a good year they've traditionally rewarded their owners with very generous CD (and loan) rates, - cognizant of the economic environment, of course, but not solely in response to competitive forces.  Last year's 3.04% offer would have never happened if that weren't the case, and trustfully another successful performance for 2014 will be rewarded with similar good rates for all of us who have contributed to it in the coming months of Dec and Jan.  It's the way PenFed operates, and to see any change in the pattern would be a severe disappointment.
Anonymous   |     |   Comment #23
Disappointment, maybe.  But not to be totally unexpected in today's economic climate. 
Anonymous   |     |   Comment #24
The way an "enlightened" cu balances the ups/downs of lending rates and saving rates is to usually issue a year-end "bonus dividend" to the membership based upon a formula devised by the Board...it operates as incentive for members to not be merely a borrower OR a lender. Finally, being a non-profit organization is only for tax purposes...if a cu does not make a profit, the management and/or Board is "toast!"
soukupri   |     |   Comment #25
They reduced the perks my Penfed charge card. If they are sobconcerned about members please restore my credit card perks. I only use it for 5% off gas and my BOA card which gives better rewards on everything else. Last year was chaos with the 3.04 CD. I wonder how many of the CD's were from people taking ewp's and reopening CD's (I did)? What is the cost of processing these requests (I had to send a Fax).
gregk   |     |   Comment #26
The EWP windfall almost surely covered the costs of processing and much more besides.  Hope PenFed got the message last year that 3% CD's can create such a lucrative new profit center, and will want to revive it again in the coming months.  Then, with the arrival of 4% CD's in a couple of years all those 3% investors will do the very same thing again, and in effect reduce PenFed's aggregate yield actually paid to less than their much lower rate competitors at the time.  It's genius. 
Anonymous   |     |   Comment #27
Sarah or Sara?? She seems to be confused as to how to spell her own name....
paoli2   |     |   Comment #28
Where are you seeing it as "Sarah".  I see Sara only.  What difference does it make as long as she can get us higher rates?
Anonymous   |     |   Comment #29
I'll copy her post...

Comment #16 by Sarah H. Evans (anonymous) posted on Nov 5, 2014 at 4:31 pm

...Thank you #15.  I will recommend that highly to our rate committee here at the Credit Union.

Sara Evans
gregk   |     |   Comment #30
Sorry to disappoint, but Sarah (a.k.a. Sara) Evans won't be getting us higher rates, Paoli.  If you're curious give PenFed a ring and ask for Sr. CSR "Sarah Evans".  Let us know the result.
Anonymous   |     |   Comment #31
Why play games? If she's a phony, say so and ask that all relevant post(s) removed.
gregk   |     |   Comment #32
If you're talking to me #31 it's not my place to pronounce her a phony, though I did find her post rather curious if not highly suspicious.  I mean, consider, - some PenFed CSR reads a few throwaway comments on DA and declares an intention to recommend highly before the "rate committee" that our wishes be implemented?  BS.
Anonymous   |     |   Comment #33
In any event, a "normal" CU should post something to clarify or...?
gregk   |     |   Comment #34
No one at PenFed is monitoring how the wind is blowing here at DA I can almost assure you, - at least not in any "official" capacity.
Anonymous   |     |   Comment #35
Soooooooooo, you called PenFed!
gregk   |     |   Comment #36
Any advance news about PenFed's December CD rates?
gregk   |     |   Comment #37
I've only rarely moved  the funds of my maturing PenFed CD's to another FI over the last 15 years, but PenFed's new December rates now make certain that action unless there's a significant (and unlikely) change upwards in January.  Much reduced even from November's uncompetitive levels, the 3 year now pays a whopping 1%, and 5 years barely trumps that at 1.20%.  If PenFed has wished to ensure a peaceful holiday season for their service reps (unlike last year's 3% frenzy) they will eminently succeed, I believe.  It's unprecendented.  What's going on? 
cumulus   |     |   Comment #38
Wonder if this has anything to do with the resignation last spring
of the previous long term (13 years) CEO and president?  He was a
well-known consistent champion of PenFed members and consumers. :(
lou   |     |   Comment #39
You may be right, Cumulus, but I would also note that the successor was a longtime protege of this CEO and his handpicked candidate for the top job.
Anonymous   |     |   Comment #40
Wow. They really cut their rates. Guess they got enough funds last year. Maybe they will offer s special rate later in the year. Just have to see what happens. They cut their 5 year rate from 2.32% in October to 1.2% in December. The rate was almost cutbin half. You always have other options.
gregk   |     |   Comment #42
Um, we are "later in the year" (the next potential rate increase from PenFed is next year).

Anyone who didn't open the Toby 7 year 3% "add-on" CD when they had the chance wasn't thinking.  That will the "out" for my maturing PenFed CD's later this month and next it looks like.
Anonymous   |     |   Comment #44
Um    Quote from you "Hope PenFed got the message last year that 3% CD's can create such a lucrative new profit center, and will want to revive it again in the coming months.  Then, with the arrival of 4% CD's in a couple of years all those 3% investors will do the very same thing again, and in effect reduce PenFed's aggregate yield actually paid to less than their much lower rate competitors at the time.  It's genius."  Guess you and Penfed aren't such geniuses. 
gregk (anonymous)   |     |   Comment #47
Regarding my remarks you reproduce here without any context #44, they were intended as a tongue in cheek rejoinder to several other posters' contemplation of accepting EWP's to invest in higher yielding Certificates than what they currently held if any such were offered.  My point was that the FI typically comes out ahead in such a scenario rather than the Certificate holders, - unless the spread between old and new is significantly wide.
Anonymous   |     |   Comment #45
They have more than 3 weeks to make a change so it could happen.  You are just a troll
gregk   |     |   Comment #46
I'm a troll?  PenFed NEVER changes their rates in the middle of a month (and I've been doing business with them for over 2 decades).  Plus, just think about it, - apart from what's habitual in their case.  After lowering considerably in December what were already very low rates in November, what would the rationale be for reversing course and then upping them in the very same month?  I'm sorry to ruffle your feathers, but it's not going to happen.

Given the large number of PenFed investors with Certificates maturing in December (because their rates are typically high then) what PenFed seems to be doing here is not just discouraging new money from being invested with them, but positively Encouraging the withdrawal of funds they have no productive deployment options for.at present.   
Anonymous   |     |   Comment #48
I believe PenFed thought FED rates were going up last year and they reacted accordingly. They lost that bet as did many savers who kept money in low interest accounts waiting for higher rates to come along. Those 10-year brokered CD's at 3.3% look better with each passing year.  
Anonymous   |     |   Comment #41
Money is a commodity and, at the moment, they don't need any.
Inforay   |     |   Comment #43
I am so very disappointed with PenFed's December rates.  A while ago a CSR had mentioned to me that PenFed raises its rates in December and January and I was anxiously awaiting the rate announcement.  Now it looks like they have lowered the rate to 1.2% on their 5 and 7 year Certificates.  I guess they no longer need members' money.
Anonymous   |     |   Comment #49
Look at 30 year fixed rates (under 4%) and you'll see why CD rates are low. It's a market and there's nothing passive savers can do about it. Good news: the debt now exceeds $18,000,000,000,000.
Anonymous   |     |   Comment #50
Look at the financials...see any gov't loans whereby they are paying a higher interest rate? And they have a fiduciary to whom? Why pay for "your" money when they are "required" to take those loans AND pay higher rates to " them"?