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This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.

PenFed Credit Union

Andrew Omalley Andrew Omalley Last update:

Overview

PenFed is a credit union that has been around since 1935, previously being called the Pentagon Federal Credit Union. The Virginia-based credit union previously only catered to people who had links to the federal government or the military. However, these days it caters to any and all people.

It currently has over two million members, as well as $25 billion worth of assets. There are over 50 physical branches dotted across the United States, as well as on numerous global military bases.

PenFed has an online banking offering and one of its main strengths is that it has very strong rates, low minimum opening deposits, and generally follows a low-cost model. This PenFed bank review will look at all of the different aspects of this credit union’s online offering.

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  • Very good Annual Percentage Yields (APYs) available
  • Low-cost structure
  • Access to 85,000+ no-fee ATMs for checking account holders

PenFed Account Types

PenFed has a number of different types of online banking accounts available to its users, including checking accounts, savings accounts, and certificates of deposits. Each of these options will have its own distinct perks that have been detailed below.

Free Checking

The Free Checking account at PenFed Credit Union is a checking account that carries no monthly fees and no minimum balance requirements. You will have access to your funds 24/7 thanks to the online banking platform and the mobile app. You have the option to set up direct deposits that allow you to get your paycheck up to one day earlier. With your debit card, you will be able to use more than 85,000 ATMs across the country without having to pay a fee.

New Free Checking accounts can be opened with as little as $25. There is the availability of an overdraft line of credit, while you will get 50 checks sent to you for free after opening your account. As a Free Checking account holder, you can earn 2% cash back on everything you purchase with a PenFed Power Cash Rewards Visa Signature® card.

Account Type Key Features
Free Checking No monthly fee.
No minimum balance requirements.
Access to 85,000+ fee-free ATMs

Premium Online Savings

This account option allows you to earn 0.55% APY on your savings, which is a much better rate than many competitors. All you need to deposit in order to open an account is $5. There is no monthly service fee in place for this type of account. You can also set up free online transfers and your funds are insured federally up to $250,000.

Account Type Key Features
Premium Online Savings Minimum opening deposit of $5
Earn 0.60% APY
No monthly service fee

Certificates of Deposit (CD)

The money market certificates of deposit (CD) options at PenFed Credit Union allow you to get access to some great rates that are better than a lot of other online banking options. The term lengths start at six months and can go as long as seven years.

The APY rates will start at 0.50% (for a half-year term) and rise to 1.85% in the case of a 7-year term. The minimum balance you need for this type of option is $1,000. There are penalties in place if you try to withdraw your funds before the maturity date.

Account Type Key Features
Certificates of Deposit Six-month to seven-year terms
1.10%-1.80% APYs available
The minimum balance needed is $1,000

PenFed Credit Union APY

PenFed Credit Union has some of the best APY rates around today in the market when compared to others in the space. This goes for all of its major accounts, with some very strong rates being available to you. Here is a breakdown of what APYs you can expect with the main types of PenFed Credit Union’s accounts:

Account 6 Months 1 Year 2 Years 3 Years 4 Years 5 Years 7 Years
Premium Online Savings 0.60% 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
Certificates of Deposit 0.50% 0.90% 1.35% 1.40% 1.45% 1.80% 1.85%

 

What is a PenFed Credit Union Account Best For?

PenFed Credit Union has a lot going for it. All bases are covered with this offering, from checking to savings and CD accounts. It has focused on making each of its account options a quality choice for people. There are little to no monthly service fees that you need to pay for the various account options. Its Free Checking account option also does not have any minimum balance requirements.

This low-cost model will be suitable for a lot of people. It also has some of the best APYs around the space today. You will be hard-pressed to find higher rates than what are available at PenFed Credit Union. It is also a very reputable offering, so you know that your funds are safe when entrusted with this credit union.

Overdraft Fees

There are no overdraft fees charged by PenFed. However, if you try to make a transaction and you have insufficient funds, you will be hit with a $30 charge. This can be charged to you multiple times in the same day. There is a no-fee line of credit that certain qualified members can sign up to.

Opening An Account at PenFed Credit Union

The process of opening an account with PenFed Credit Union is very simple and straightforward. You can complete this process in person or online. First of all, you will need to select the type of account that you want to open. You will then need to provide key information to PenFed Credit Union, such as your social security number, full name, and home address.

Once you have entered this info, you will be able to open the account and be able to add funds as you please. The entire process is very streamlined and straightforward, so there is not much downtime to consider.

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Pros and Cons

There is a lot to like about the PenFed Credit Union offering. You will find some of the best APYs in the space right now across the various account options. While there are not too many different account types to check out, each of the available options is of high quality.

You also have access to more than 85,000 ATMs across the country without having to pay any fees (an Access America or a new free checking account is required to get no fees at these ATMs). There are low minimum account balance requirements, as well as little to no fees that you have to pay.

There are not too many cons associated with the PenFed Credit Union offering. If you try to withdraw before maturity from a certificate account, you can face stiff penalties. The $1,000 minimum required balance for certificate accounts is also a tad higher than most competitors.

Pros Cons
Great APYs High minimum for CDs
Low-cost structure
Access to 85,000+ no-fee ATMs

Comparison to similar bank accounts

PenFed Credit Union

APY: 0.60% (Premium Online Savings)

Minimum opening deposit: $5

3 main benefits: Great APYs, lost-cost approach, low minimum innitial deposit

Website:  https://www.penfed.org/

Review: https://lendstart.com/online-banking/reviews/penfed-credit-union/

Bank of America

APY: Up to 0.05% (Bank of America Advantage Savings)

Minimum Balance: $100

3 main benefits: Thousands of branches, easily avoided monthly fees, low minimum required opening deposits

Website: https://www.bankofamerica.com/

Review: https://lendstart.com/online-bankings/reviews/bank-of-america

TD Bank

APY: Up to 0.15% (TD Beyond Savings)

Minimum Balance: $0

3 main benefits: No minimum required account balance, option for in-person banking, good selection of accounts

Website: https://www.td.com/us/en/personal-banking/

Review: https://lendstart.com/online-bankings/reviews/td-bank

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Disclaimer

This credit union is federally insured by the National Credit Union Administration. To receive any advertised product you must become a member of PenFed Credit Union. 

Disclosure
This website is an informative comparison site that aims to offer its users find helpful information regarding the products and offers that will be suitable for their needs. We are able to maintain a free, high-quality service by receiving advertising fees from the brands and service providers we review on this website (though we may also review brands we are not engaged with). These advertising fees, combined with our criteria and methodology, such as the conversion rates, our team of reviewer's finding and subjective experience and product popularity, impact the placement and position of the brands within the comparison table. In the event rating or scoring are assigned by us, they are based on the position in the comparison table, or according to other formula in the event specifically detailed by us. See our How we Rate page and Terms of Use for information. The reviews, rating and scoring are provided “as-is” without guaranties or warranties regarding the information contained in our website, which shall not be considered as endorsement. We make the best efforts to keep the information up-to-date, however, an offer’s terms might change at any time. We do not compare or include all service providers, brands and offers available in the market.
Andrew Omalley Andrew Omalley
Andrew is a freelance writer who has been crafting valuable pieces of content relating to personal finance for more than five years. Previously, he studied Economics & Finance at university and he has professional qualifications relating to financial advice.
This review is based on the writer's personal opinion.