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PenFed Credit Union Review

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PenFed 6-Month Money Market Certificate
1.70% APY

According to the National Credit Union Administration’s (NCUA) most recent data, Pentagon Federal Credit Union (PenFed) has 1.8 million members and holds $25 billion in assets, making it one of the largest credit unions in the U.S. The credit union offers just a single checking account, but it also has a wide variety of savings, money market and IRA accounts.

While some of PenFed’s accounts come with an annual percentage yield (APY) between 0.05% and 0.50%, its savings accounts earn as high as a 2.00% APY. Its CDs feature high rates that range from 2.00% to 2.50%. PenFed also offers services like mortgages, auto loans, credit cards, personal loans, student loan refinancing and more.

Every deposit you make at PenFed is federally insured through the NCUA, which is the standard across the credit union landscape. You can find PenFed branches in 13 states and on three U.S. military bases, though their services are available to customers in all 50 states, Puerto Rico, Guam, and Japan. Customers will also have fee-free access to over 68,000 ATMs nationwide thanks to the credit union’s partnership with the Allpoint and CO-OP ATM networks.

Active duty military members and federal government employees are eligible for membership with PenFed credit union. However, there are other ways to qualify for membership, including by joining certain non-profit organizations.

Products Offered

Products Key Details
Access America Checking Account
  • No monthly service fee if you maintain a daily balance of $500 or receive a monthly direct deposit of $500
  • Earm daily compounded dividends
  • Decent APYs
  • Extensive mobile banking services
  • More than 68,000 fee-free ATMs
Premium Online Savings Account
  • Great APY
  • Low minimums
  • No monthly fees
  • Free transfers from your checking account
Regular Savings Account
  • Low APY
  • Earn daily compounded dividends
  • ATM access to funds
  • Low minimum
Money Market Savings Account
  • Average APYs
  • No monthly fees
  • $25 account minimum
  • Online and mobile banking access
CDs and IRAs
  • Good APYs
  • 6- to 84-month terms
  • $1,000 minimum deposit

PenFed Credit Union Overview

Pentagon Federal Credit Union was founded in 1935 and is headquartered in McLean, Virginia. While PenFed generally grants membership to those who have ties to the military and/or the federal government, membership is now open to everyone.

PenFed has around 50 branches across 13 U.S. states and at military bases in Guam, Japan and Puerto Rico. Even if there's no branch in your state, though, you also have access to your money through a large network of ATMs. It’s also affiliated with PenFed Wealth Management, PenFed Title and PenFed Realty.

Access America Checking Account

Key Features Key Details
Minimum Deposit $25
Access to Your Account Online, mobile, branches and ATMs
Security Federally insured by the NCUA
Fees $10 monthly service fee, waived if any of the following requirements are met:
  • $500 minumum daily balance
  • At least $500 in monthly direct deposits
Current Terms and Rates
  • 0.50% APY on balances $20,000 to $50,000
  • 0.20% APY on balances below $20,000

PenFed offers one dedicated checking option: the Access America Checking account. Checking accounts often don’t earn interest, so the rates for this account are especially appealing. You’ll receive a 0.50% APY with a daily balance between $20,000 and $50,000. For accounts with a daily balance beneath $20,000, the APY drops to 0.20%. There is a $10 per month service fee, which is waivable if your daily balances exceeds $500 or if you receive at least $500 in direct deposits in a month.

The Access America Checking account comes with several other notable features, such as free fraud protection. This means you won’t be liable for any unauthorized purchases made using your debit card. Accessibility to cash shouldn’t be an issue for PenFed customers either, as the credit union has over 68,000 no-fee U.S. ATMs through the Allpoint and CO-OP networks. iPhone, Android and Samsung users will also be able to add their debit cards to their respective digital wallets.

The overdraft line of credit is another helpful aspect of PenFed’s Access America Checking account. If you have consistent inflows and outflows to and from your checking account, you might end up overdrafting at some point. To avoid this, PenFed lets you apply for a line of credit so that any overdrafted amount goes straight to that rather than overdrafting your account and incurring a fee.

Compare PenFed to Other Competitive Offers

Premium Online Savings Account

Key Features Key Details
Minimum Deposit $5
Access to Your Account Online, mobile and branches
Security Federally insured by the NCUA
Fees No monthly fees
Current Terms and Rates 2.00% APY on all balances up to $250,000

Unlike its checking account options, PenFed has four different savings accounts to pick from. The Premium Online Savings account is its top option, offering a solid 2.00% APY on balances up to $250,000. You can deposit as much as $10,000 per day and $50,000 per month, but only six monthly withdrawals are allowed, as per federal law. It’s free to transfer money between your PenFed accounts within those guidelines.

A minuscule $5 deposit is all that’s needed to open your account. To save more, feel free to set up automatic transfers, but you can also transfer in money as you please. Regardless of how much or how little you choose to deposit on a month-to-month basis, you’ll hold on to the 2.00% APY, provided you don’t eclipse the $250,000 mark. As is usually the case with a savings account, it’s a little more difficult to access your money since you can’t withdraw from ATMs.

Regular Savings Account

Key Features Key Details
Minimum Deposit $5
Access to Your Account Online, mobile, branches and ATMs
Security Federally insured by the NCUA
Fees No monthly fees
Current Terms and Rates 0.05% APY on all balances

In terms of interest-earning potential, the PenFed Regular Savings account significantly lags behind the Premium Online Savings account. While you still won’t pay any fees and you’ll actually have access to your money via ATMs, the 0.05% APY earns you effectively zero interest (and won't keep pace with inflations). The Regular Savings account only makes sense for customers who aren't saving enough money to earn significant interest and who want ATM access to their savings.

Money Market Savings Account

Key Features Key Details
Minimum Deposit $25
Access to Your Account Online, mobile, branches and ATMs
Security Federally insured by the NCUA
Fees No monthly fees
Current Terms and Rates
  • 0.05% APY on account balances less than $10,000
  • 0.10% APY on account balances between $10,000 and $99,999
  • 0.15% APY on account balances more than $100,000

The PenFed Money Market Savings account is another solid option for saving that doesn’t give up ATM access. Although you won’t come close to matching the APY offered by the Premium Online Savings account, the variable APY offered by this money market account (MMA) is a great way to start saving.

You’ll need at least $25 to start your account, but you won’t be subject to any monthly fees. Plus, you’re incentivized to save as much as possible, since your APY grows along with your balance. You’ll be able to access your account online, and free checks are available upon request.

Money Market Certificates

Key Features Key Details
Minimum Deposit $1,000
Access to Your Account Online and mobile
Security Federally insured by the NCUA
Fees
  • No monthly fees
  • Fees imposed for early withdrawal
Current Terms and Rates
  • 6-month: 2.05% APY
  • 12-month: 2.10% APY
  • 15-month: 2.25% APY
  • 18-month: 2.25% APY
  • 2-year: 2.30% APY
  • 3-year: 2.35% APY
  • 4-year: 2.40% APY
  • 5-year: 2.45% APY
  • 7-year: 2.50% APY

Certificates of deposit (CDs), often referred to as “certificates” by credit unions, are savings products that offer high APYs in exchange for keeping your money deposited for a fixed period of time. At PenFed, you can invest in a Money Market Certificate for anywhere from six months to seven years. The longer the term of the certificate, the better your rate will be. The minimum deposit is $1,000, but if you elect to withdraw your money early, you’ll incur a significant penalty.

PenFed also offers Coverdell Educational Savings Certificates. You can invest in these certificates for anywhere from one to seven years, and the earnings are tax free. While their APYs are slightly lower than what you would get with a Money Market Certificate, the minimum deposit is only $500 and you’ll be able to easily use your money to fund elementary, secondary and higher education. The maximum contribution is $2,000 per year. 

IRA Certificates

Key Features Key Details
Minimum Deposit $1,000
Access to Your Account Online and mobile
Security Federally insured by the NCUA
Fees
  • No monthly fees
  • Varying early withdrawal fees, not on principal
Current Terms and Rates
  • 1-year: 2.00% APY
  • 2-year: 2.20% APY
  • 3-year: 2.25% APY
  • 4-year: 2.30% APY
  • 5-year: 2.35% APY
  • 7-year: 2.40% APY

PenFed offers individual retirement account (IRA) certificates to help customers save for retirement. These combine the major tax advantages of an IRA with the yield and safety of a CD. You’ll need a minimum balance of $1,000 to open an IRA certificate. Your money will also compound on a daily basis.

IRAs

Key Features Key Details
Minimum Deposit $25 - $10,000
Access to Your Account Online and mobile
Security Federally insured by the NCUA
Fees No monthly fees
Current Terms and Rates 0.05% APY

PenFed has several other IRAs, all with markedly different specifications. IRA Premier accounts require a sizable $10,000 minimum balance to open and only offer a 0.05% APY. On the other hand, assets kept in an IRA Premier account are fully liquid, so you can withdraw or deposit freely. 

You also have the option to open an IRA Savings account, which is nearly identical to an IRA Premier account. The only difference is that the minimum opening balance is just $25. You’ll still earn 0.05% APY and have the same access to your money. As is the case with all PenFed IRAs, you’ll be covered by NCUA insurance, earn daily compounding interest and be able to open your account as a Roth IRA, individual IRA or SEP IRA.

Saving for retirement on your own is easier said than done. If you want help readying your retirement assets via investing and other methods, it might be worth consulting with a financial advisor in your area.

How Can I Join PenFed Credit Union?

Unlike banks, which typically don’t have any preceding requirements for opening an account, you’ll need to apply and be approved for membership before you can make a deposit at PenFed. Members are usually connected to the military or government in some way, though PenFed recently removed this requirement. 

There's no guarantee you'll be accepted for membership at PenFed. If you are accepted, you’ll just need to deposit $5 into a Regular Savings account. Once you do this, you’ll be a PenFed member with access to all accounts and services.

Where Can I Find PenFed Credit Union?

PenFed has about 50 branches across 13 states and three military bases. Thanks to their partnership with Allpoint and CO-OP, there are now more than 68,000 ATMs nationwide that PenFed members can use for free. You can also access most of the features of your account online and on your mobile device.

What Can You Do Online With PenFed Credit Union?

Members of PenFed are automatically enrolled in online banking, and can access any online features at any time from a computer or mobile device. The PenFed mobile app scores an average rating of 4.3 stars out of 5 between the Apple and Android app stores. However, users on both platforms have reported some issues that can make the app difficult to use.

With PenFed’s online and mobile banking services, you’ll be able to check your account balances at any time, transfer money and view transaction histories. You can also track the status of any loans, as well as pay your bills.

How Do I Access My Money?

With PenFed’s debit card, you can withdraw money for free from any one of its 68,000 nationwide ATMs. If you can’t find an ATM that partners with PenFed, you’ll be charged $1.50 plus whatever fees are charged by that ATM for withdrawing cash. You also have the option of visiting a PenFed branch to obtain cash, checks or money orders.

Money transfers to and from your accounts are free with PenFed. But wire transfers cost between $12 and $20 depending on whether you’re sending or receiving one. 

How Can I Save More Money With a PenFed Credit Union Bank Account?

PenFed Credit Union offers several accounts with solid APYs. Even its lower APY accounts often beat out what’s offered by many major banks. Since interest returns are compounded daily and paid out monthly, you’ll start to see the fruits of your savings right away. Plus, with accounts like the Money Market Savings account, you’ll unlock a higher APY the more you save.

PenFed is also generous when it comes to fees, helping keep as much money in your pocket as possible. Most accounts don’t include monthly fees to begin with. On accounts with a monthly fee, though, waiver stipulations are normally relatively easy to meet.

What’s the Process For Opening an Account With PenFed Credit Union?

If you’re approved for membership with PenFed, opening a new account is quite simple through its online application system. Once your new account is active, you can link outside bank information and deposit or withdraw money online, over the phone or at any branch or ATM.

 

Bottom Line

PenFed is a solid banking option for anyone with ties to the government or the military. They offer solid APYs on most accounts and low fees and minimums. You’ll have a number of account options, and it’s easy to withdraw and deposit money into most accounts. On top of everything else, you’ll have free and easy access to cash with PenFed’s huge network of ATMs.

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