Pentagon Federal Credit Union is the second-largest federal credit union in the U.S. Unlike some other exclusive institutions, membership is open to anyone. While U.S. government employees, members of the U.S. military and Uniformed Services and their families qualify automatically, you can also gain membership by joining one of two organizations (for a one-time cost of $14 to $15).

PenFed offers a wide range of products from checking and savings accounts to personal loans and mortgages. Its rates and terms tend to be competitive in the market, while its branch access is limited. Bankrate’s overall rating of the Pentagon Federal Credit Union is 4.3 out of 5.

Pentagon Federal Credit Union CD rates

Pentagon Federal Credit Union offers money market certificates, IRA certificates and Coverdell Education Savings certificates. According to PenFed’s website, banks use the term “certificate of deposit,” or CD, while credit unions use the term “certificate.” However, the accounts function in the same way.

Here are the rates on PenFed’s money market certificates.

Account Term APY Minimum balance
Money market certificate 6 months 0.30% $1,000
Money market certificate 12 months 0.50% $1,000
Money market certificate 15 months 0.50% $1,000
Money market certificate 18 months 0.50% $1,000
Money market certificate 2 years 0.55% $1,000
Money market certificate 3 years 0.60% $1,000
Money market certificate 4 years 0.65% $1,000
Money market certificate 5 years 0.75% $1,000
Money market certificate 7 years 0.80% $1,000

Note: The APY (annual percentage yield) shown is as of Jan. 5, 2021. The APY may vary in region.

Minimum deposits range from $500 to $1,000, depending on the certificate type and all certificates are backed by NCUA insurance up to $250,000. Additionally, all certificate dividends are compounded daily except for six-month money market certificates which earn dividends on a simple interest basis.

You’ll face penalties for withdrawing your Coverdell or money market certificates early while qualified distributions and partial withdrawals after the age of 59 1/2 are allowed on IRA certificates without penalties.

How Pentagon Federal Credit Union compares to top-yielding banks

When comparing the best CD interest rates, PenFed CD rates tend to fall in the middle of the pack. Its one-year money market certificate APY currently sits at 0.50 percent while top competitors earn up to 0.80 percent. The three-year APY is 0.60 percent while top competitors range from 0.81 percent to 1.15 percent, and the five-year APY is at 0.80 percent compared to top competitors coming in from 1.00 percent to 1.35 percent.

Where PenFed CDs stand out is in other CD terms like the minimum deposit amount. Across the board, PenFed only requires $1,000 to open a money market certificate. Competitors such as Amerant Bank and PurePoint Financial ask $10,000, Citizens Access requires $5,000 and Synchrony Bank requires $2,000. However, there are a few competitors with no minimum deposit amount including Capital OneAlly Bank and Barclays.

Other savings options at Pentagon Federal Credit Union

Pentagon Federal Credit Union ranks well when it comes to savings accounts due to its Premium Online Savings offering. You only need $5 to open the account, there is no monthly fee and the APY is competitive.

Additionally, FedPen offers a regular savings account; however, the APY is only a modest 0.05 percent. A money market savings account is also on offer with a 0.15 percent APY on balances over $100,000.

The Premium Online Savings account comes out a clear winner in PenFed’s lineup due to the low barrier of entry and high reward. Depending on how long you want to keep your money in a CD and how much you have to invest, the savings account may even be a better alternative to CDs.