Technology

Pentagon Federal Credit Union Review: High APY on Savings

Pentagon Federal Credit Union Review: High APY on Savings

Contents

Pentagon Federal Credit Union Review: High APY on Savings

Overall credit union rating

Pros and cons


Annual Percentage Yield (APY)


1% APY


Minimum Deposit Amount


$5


Annual Percentage Yield (APY)


1% APY


Minimum Deposit Amount


$5

More Information

  • Many ways to join PenFed, the easiest being to open a savings account with $5
  • Branches in US and on military bases in Guam, Puerto Rico, and Japan
  • Interest compounded monthly, paid monthly
  • Federally insured by the NCUA

The PenFed Premium Online Savings account pays a competitive interest rate — you can find slightly higher rates elsewhere, but it’s definitely up there. PenFed only requires $5 to open a savings account, and the credit union doesn’t charge monthly fees.

The main downside is that your money will compound monthly, whereas many institutions’ savings accounts compound your interest daily and pay monthly.


Annual Percentage Yield (APY)


0.15% to 0.35% APY


Minimum Deposit Amount


$25


Annual Percentage Yield (APY)


0.15% to 0.35% APY


Minimum Deposit Amount


$25

Pros

  • Ability to earn interest on your checking balance
  • Over 68,000 ATMs

Cons

  • $25 opening deposit
  • $10 monthly service fee
  • $1.50 fee for using out-of-network ATM
  • Interest is compounded monthly, not daily
  • Overdraft protection is a line of credit, not a transfer from your other bank accounts

More Information

  • Many ways to join PenFed, the easiest being to open a savings account with $5
  • Branches in US and on military bases in Guam, Puerto Rico, and Japan
  • Federally insured by the NCUA
  • Interest is compounded and paid monthly
  • Waive $10 monthly fee by maintaining $500 daily balance, or setting up monthly direct deposits of $500
  • Earn interest if you receive monthly direct deposits of $500
  • Earn 0.15% APY on balances less than 20k, and 0.35% APY on balances with $20k to $50k

Not all


checking accounts

pay interest, so it’s nice that you can earn interest with PenFed Access America Checking — but you must receive monthly direct deposits of $500 or more to earn it. 

You can definitely find a checking account with lower fees than this one. PenFed charges a $10 monthly fee, although you can waive the fee if you maintain a $500 daily balance or receive monthly direct deposits of $500 or more. 


Annual Percentage Yield (APY)


0.95% to 3.10% APY


Minimum Deposit Amount


$1,000


Annual Percentage Yield (APY)


0.95% to 3.10% APY


Minimum Deposit Amount


$1,000

Pros

  • Competitive APY
  • Terms up to 7 years

Cons

  • $1,000 opening deposit
  • High early withdrawal penalties
  • 6-month certificates earn simple interest, not compounded interest

More Information

  • Many ways to join PenFed, the easiest being to open a savings account with $5
  • Branches in US and on military bases in Guam, Puerto Rico, and Japan
  • Terms ranging from 6 months to 7 years
  • Limited-time CD rate: Earn 2.75% APY on a 3-year CD if you open a CD before May 31, 2022
  • 90 days interest early withdrawal penalty for 6-month CDs
  • For longer terms, you’ll lose all interest earned if you make an early withdrawal within 1 year of opening the certificate
  • If you make an early withdrawal after the 1-year mark, the penalty is 30% of the gross dividends you would have earned if the certificate had matured
  • Federally insured by the NCUA

Don’t be thrown off by the term “money market certificate.” A PenFed Money Market Certificate serves basically the same purpose as a CD: You open an account for a set amount of time, lock in a rate, and can either access the money when the term ends or pay a fee to access funds early.

Beware that early withdrawal penalties are high for the shorter-term certificates. PenFed charges 365 days interest for an early withdrawal for certificates of 12 months or more. That’s not so bad for a seven-year term, but it’s steep for a one-year term.


Annual Percentage Yield (APY)


0.05% to 0.15% APY


Minimum Deposit Amount


$25


Annual Percentage Yield (APY)


0.05% to 0.15% APY


Minimum Deposit Amount


$25

Pros

  • $25 opening deposit
  • No monthly service fees
  • Paper checks

More Information

  • Many ways to join PenFed, the easiest being to open a savings account with $5
  • Branches in US and on military bases in Guam, Puerto Rico, and Japan
  • Earn 0.05% on balances under $10k; 0.10% on balances between $10k and $99,999; 0.15% on $100k or more
  • Federally insured by the NCUA
  • Interest is compounded and paid monthly

The PenFed Money Market Savings account will send you paper checks, but the account doesn’t come with a debit card. You can also find a higher APY elsewhere, especially if your balance is under $10,000. All in all, the money market account is a weak link for PenFed.

How Pentagon Federal Credit Union works 

PenFed has 68,000 free ATMs nationwide. It has around 50 branch locations in Washington DC and the following US states:

  • California
  • Florida
  • Georgia
  • Hawaii
  • Maryland
  • Nebraska
  • New Jersey
  • New Mexico
  • New York
  • North Carolina
  • Pennsylvania
  • Texas
  • Virginia

The credit union also has branches on military bases in Guam, Puerto Rico, and Japan.

You’re eligible if you have served in the military or work at qualifying associations or organizations. But the easiest way to join is to simply open a savings account with a $5 minimum deposit.

To contact customer service with questions, call Monday through Friday, 7 a.m. to 11 p.m. ET. Or call Saturdays from 8 a.m. to 11 p.m. ET, or Sundays from 9 a.m. to 5:30 p.m. ET.

You can also contact customer service via email, snail mail, or fax, but there is no live online chat option.

Your PenFed accounts are federally insured by the NCUA for $250,000, or $500,000 for joint accounts.

PenFed trustworthiness and BBB score

The Better Business Bureau gives Pentagon Federal Credit Union an A+ rating. A good BBB rating signifies a company responds effectively to customer complaints, has honest advertising practices, and is transparent in how it handles business.

The credit union doesn’t have any public scandals. 

PenFed vs. Navy Federal Credit Union

We’ve compared PenFed to Navy Federal below.

Your choice between the two financial institutions may likely come down to two main factors: membership eligibility and branch locations.

At Navy Federal, you must be tied to the armed forces or have a family member who is already a member of the credit union. You can also be a Department of Defense civilian employee, veteran, or extended family member. However, you may have access to more branches. Navy Federal has a branch network with 247 locations around the world, including ones on some military bases. 

Meanwhile, PenFed Union makes it easy for anyone to join — simply donate $5 to a foundation. However, it only has 50 branches in the US and on military bases. 

PenFed vs. Alliant Credit Union

See how PenFed compares to another online credit union: Alliant.

Both Alliant Credit Union and Pentagon Federal Credit Union offer an easy way to become a member. Simply donate $5 to a foundation and you’ll be eligible to become a member.

If you need to regularly visit a branch location to manage your account, PenFed will be a better option for you than Alliant. Alliant is an online-only institution so you’ll have to be comfortable with online and


mobile banking

Frequently asked questions

Can anyone use Pentagon Federal Credit Union?

Yes, anyone can use Pentagon Federal Credit Union.


Credit unions

usually require membership to open an account, and PenFed allows you to become a member if you open a savings account with at least $5. 

Is Pentagon Federal Credit Union insured?

Pentagon Federal Credit is federally insured by the NCUA. Credit unions that are federally insured keep your money safe regardless of what happens to the financial institution. Individual bank accounts are insured for up to $250,000.

Is PenFed a good credit union?

PenFed is a good option if you want to earn competitive interest rates on savings accounts or certificates.

You’ll want to take note of the early withdrawal penalties for CD terms, though. The penalty may be high depending on which term you choose.

Where can I deposit cash into my PenFed account?

Your options will depend on where you live. PenFed has branches in California, Florida, Georgia, Hawaii, Maryland, Nebraska, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Texas, Virginia, and Washington, DC. It has branches on military bases in Guam, Puerto Rico, and Japan.

If you don’t live by a nearby branch, PenFed has over 85,000 fee-free ATMs throughout the US.

Share this post

Similar Posts