Pentagon Federal Credit Union Review 2021

Published December 2020 by Brian Beers

AT A GLANCE
4.3

Bankrate Score

bank-logo

Low Minimum Balance

Low Minimum Deposit

PenFed is good for savers that qualify for membership and are interested in getting both a competitive rate as well as the option to choose from a wide variety of banking products. If you prefer in-person banking, you may want to consider institutions with a larger branch network.

  • Savings
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    5.0
  • CDs
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    4.2
  • Checking
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    4.2
  • MMAs
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    3.0
  • MORE HIGH-YIELD OPTIONS
    MORE HIGH-YIELD OPTIONS
    LendingClub

    Member FDIC

    Savings account

    0.60 % APY

    $ 2,500

    Min. balance for APY

    Goldman Sachs Bank USA

    Member FDIC

    Savings account

    0.50 % APY

    $ 0

    Min. balance for APY

    Goldman Sachs Bank USA

    Member FDIC

    CD

    0.55 % APY

    1yr

    Term

    $ 500

    Min. deposit

    Overall

    4.3

    Bankrate Score

    Pentagon Federal Credit Union is the second-largest federal credit union. It has a rich history in serving members of the military and those who are affiliated with the military. PenFed has members in all 50 states and the District of Columbia, and it is insured by the National Credit Union Administration (NCUA).

    What we like

    • You can get a highly competitive APY on the Premium Online Savings account.

    • The checking account is interest-bearing and provides a highly competitive rate.

    • There’s a low minimum deposit to open a checking or savings account.

    • You’ll have access to tens of thousands of free ATMs.

    What we don't

    • The basic savings account has a much less attractive yield.

    • The number of branches isn’t particularly extensive with less than 50 locations total.

    Savings accounts

    5.0

    Bankrate Score

    OTHER SAVINGS OFFERS YOU MAY LIKE
    LendingClub

    Member FDIC

    Savings account

    0.60 % APY

    $ 2,500

    Min. balance for APY

    The Premium Online Savings account offers an excellent dividend rate on all balances and you only need to deposit $5 to open an account. On top of that, there’s no monthly fee either.

    PenFed’s Regular Savings account doesn't offer an impressive APY, but it can be opened at a branch and provides easy ATM access.

    What we like

    • You’ll get a highly competitive APY with the Online Savings account.

    • There won’t be any monthly service fees to worry about.

    • You can set up free online recurring transfers.

    What we don't

    • The Regular Savings account doesn’t deliver the same bang for the buck as the online account.

    • You won’t get ATM access with the Online Savings account.

    CD rates

    4.2

    Bankrate Score

    OTHER CD OFFERS YOU MAY LIKE
    Goldman Sachs Bank USA

    Member FDIC

    CD

    0.55 % APY

    1yr

    Term

    $ 500

    Min. deposit

    PenFed offers several different types of certificates (or CDs provided by credit unions). Money market certificates are available with terms ranging from six months to seven years. IRA certificates and Coverdell Education savings certificates are also options. The latter is worth considering if you’re setting aside money for a child.

    With each of these products, the barrier to entry is fairly low. But early withdrawal penalties are rather harsh.

    What we like

    • There are a wide selection of terms available.

    • You can start small with a minimum balance requirement of only $1,000.

    • Rates are generally above average.

    What we don't

    • Early withdrawal penalties on terms over a year in length are pretty substantial.

    • There aren’t any options for a flexible or no-penalty certificate.

    Checking accounts

    4.2

    Bankrate Score

    OTHER CHECKING OFFERS YOU MAY LIKE
    Quontic Bank

    Member FDIC

    Checking account

    1.01 % APY

    $ 100

    To open

    $ 0

    To avoid fees

    The Access America Checking account from PenFed can be opened with as little as $25. The account has tiered interest rates that most reward those with balances of $20,000 or more. PenFed will waive its $10 monthly fee on the account for those who set up a monthly direct deposit of $500 or more, or maintain a balance of at least $500.

    What we like

    • You’ll get a great yield for a checking account, especially if you build up your balance to the top tier.

    • Bill pay and mobile deposit are free and can save you precious time.

    • You can opt for an overdraft line of credit for added protection.

    What we don't

    • Other financial institutions make it easier to avoid monthly maintenance fees.

    • It will cost you $30 for an overdraft with no daily limit on number of occurrences.

    • Physical branches are largely limited to the Mid-Atlantic region.

    Money market accounts

    3.0

    Bankrate Score

    The Money Market Savings account offers a tiered APY. Balances more than $100,000 earn the highest yield, but you can still find higher yields at other banks and some credit unions.

    The account doesn’t have any monthly service fees, and you’re able to order free checks for your Money Market Savings account. You need to deposit at least $5 to meet the minimum requirements to open this account.

    What we like

    • There’s no monthly service fee.

    • You can request free checks for the account.

    • Unlike the Online Savings account, you’ll have easy access to ATMs.

    • You can open a money market account with very little money to start.

    What we don't

    • You can find better yields elsewhere.

    • It takes at least $100,000 to get the highest APYs.

    Bank experience

    In choosing PenFed, you will have access to around 45 branches. Luckily, the credit union offers a number of great digital features so you can do the bulk of your banking online.

    The mobile app is highly rated in both Apple’s App Store and the Google Play Store. You can use it to do things like set travel notifications on your cards, deposit checks and pay bills.

    You will also have ample access to free ATMs; PenFed makes tens of thousands of free ATMs available to members, including those in the Allpoint and CO-OP networks.

    About Pentagon Federal Credit Union (PenFed)

    Pentagon Federal Credit Union was established in Washington, D.C., as the War Department Federal Credit Union in 1935. Now, PenFed is based in McLean, Virginia, and serves more than 2 million members worldwide.

    PenFed offers a variety of banking products, including checking accounts, savings accounts, different types of certificates (or CDs provided by credit unions) and money market accounts.

    There are several ways to become a member. You can join the credit union if you serve in the United States military, for instance. You can also join PenFed’s field of membership by signing up for one of dozens of organizations, such as the Marine Corps League or the Air Force Association.

    Brian Beers Twitter Created with Sketch. @BRIAN_BEERS

    Brian Beers Twitter Created with Sketch. @BRIAN_BEERS

    About the author Brian Beers is the senior wealth editor at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Previously, he was the director of editorial production for CNBC Digital where he received an Emmy-nomination for the long-form digital feature "Boom, Bust and Blame: The Inside Story of America's Economic Crisis." Brian is driven to help people learn more about their money and investments knowing that it could end up positively impacting them in a real-life financial decision someday. His work has been published on CNBC, Investopedia, MagnifyMoney, NBC Sports, The Drive and Yahoo. He also spent a number of years as the lead digital producer of SportsBiz with Darren Rovell. Brian holds a B.S. in finance from Syracuse University and lives in New York with his family.