PenFed did something unusual today. It increased the rate of its 1-year Money Market Certificate (CD) from 0.80% to 1.11% APY. PenFed rarely makes CD rate changes in the middle of the month. PenFed has raised rates during the last few days of December, but I don’t remember a rate hike this early. This rate change is nothing to get excited about, but it is a pleasant surprise after the last two rate cuts. It appears to be a small holiday special. I was told by PenFed member service that it should last through December. I wasn’t able to get any clues about January rates.
I was very disappointed with PenFed’s December CD rates. Rates were slashed to very uncompetitive levels. The highest CD rate for December is only 1.21% APY, and that’s for terms of 5 and 7 years. The 1-year CD now has the second highest rate of all of the CDs. Perhaps PenFed management felt guilty, and decided to offer something halfway decent for savers. After last December with 3.04% CDs, I’m sure members felt like PenFed had delivered a lump of coal this year.
The 1.11% APY applies to both regular CDs and IRA CDs. Minimum deposit is $1,000. The early withdrawal penalty is up to 180 days of dividends (the penalty doesn’t eat into the principal.) 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".
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 nation including Maryland, Virginia, Washington DC, New York, North Carolina, Hawaii, Puerto Rico and Texas.
Credit Union Overview
PenFed (NCUA Charter # 227) has an overall "A" health rating on DA, with a Texas ratio of 2.89% (excellent) based on September 30, 2014 data. In the past year, PenFed's total deposits have grown by $1.33 Billion, a growth rate of 10.58%. I’m sure last December’s CD special helped with this growth. 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 $18.5 Billion and a membership of 1.3+ million members.
How the 1-Year CD Rate Compares
PenFed’s 1-year CD doesn’t have the best rate that’s nationally available, but at least it’s in the ballpark.
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of DepositAccounts.com.