Top Offers of June 5, 2024
You could get over 10 times** the average savings account rate with our featured partners below.
*Annual Percentage Yield
**Accurate as of June 2024, assuming FDIC average savings rate of 0.45% and $2,500 deposit.
PenFed Credit Union CD Rates
PenFed’s certificates let you lock up your money for anywhere from six months to seven years and earn fixed rates varying by the term length and certificate type. Many of PenFed’s certificate rates are competitive compared to other banks and credit unions.
- Money market certificates: These are PenFed’s standard CDs. They feature the largest term selection and highest interest rates.
- Individual retirement account (IRA) certificates: Available for Roth, Simplified Employee Pension (SEP) and traditional IRAs, these certificates offer varying tax advantages for your retirement savings.
- Coverdell education savings certificates: Featuring the same rates as IRA certificates, these tax-advantaged savings accounts are only for a minor’s qualified education costs.
Money Market Certificate
PenFed’s money market certificates come in terms from six months to seven years, require a $1,000 minimum opening deposit amount and include National Credit Union Administration (NCUA) coverage for up to $250,000 per account owner.
The credit union calculates simple interest for the six-month term, while other terms feature daily compounding interest. You can opt for monthly disbursem*nts via check or transfer to an eligible PenFed account.
PenFed charges 90 days’ interest for early principal withdrawals from six-month CDs. For terms of one to seven years, you’ll lose 365 days’ interest during the first 365 days. After that, the maximum penalty is 30% of the total interest that would’ve been earned for the entire term. Note that PenFed doesn’t give you a grace period at maturity.
| PenFed Money Market Certificate | APY* | Interest Earned on a $1,000 Deposit at Close |
| 6 months | 3.00% | $14.89 |
| 1 year | 4.00% | $40.81 |
| 15 months | 4.00% | $71.16 |
| 18 months | 4.00% | $61.83 |
| 2 years | 4.00% | $173.50 |
| 3 years | 3.40% | $107.38 |
| 4 years | 3.20% | $136.55 |
| 5 years | 3.20% | $173.50 |
| 7 years | 3.00% | $233.67 |
IRA Certificate
With potential tax advantages now or after retirement, PenFed’s IRA certificate accounts provide safety for your retirement money through NCUA insurance and fixed returns.
PenFed’s IRA CDs are available in terms ranging from one to seven years. There is also a $1,000 minimum balance requirement to open. If you’re depositing new IRA funds, annual contribution limits apply based on your age, IRA type and tax situation. To open an IRA certificate, PenFed requires downloading a form and submitting it online, by mail or by fax.
The early withdrawal penalties are similar to the money market certificates. During the first year, withdrawing funds costs all your interest. After that, you’ll pay 30% of what the whole term would’ve earned in interest. You might also face income taxes and penalties for IRA account withdrawals.
| PenFed IRA Certificate | APY* | $1,000 Deposit Value at Close of CD |
| 1 year | 3.90% | $1,039.00 |
| 2 year | 3.90% | $1,079.52 |
| 3 year | 3.30% | $1,102.30 |
| 4 year | 3.10% | $1,129.89 |
| 5 year | 3.10% | $1,164.91 |
| 7 year | 2.90% | $1,221.54 |
Coverdell Education Certificate
Available with terms from one to seven years, PenFed’s Coverdell education certificate accounts are best for saving toward a minor’s qualified education costs. The earnings on these NCUA-insured accounts won’t be taxed as long as the withdrawn cash goes toward eligible expenses.
The certificates have daily compounding interest and a $500 minimum opening deposit requirement. Note that you can only contribute up to $2,000 per year. To get this account, you must meet income limits based on your tax situation and fill out paperwork with PenFed.
The early withdrawal penalties are all interest for withdrawals during the first 365 days and 30% of the whole term’s interest after that.
| Coverdell Education Certificate | APY* | $1,000 Deposit Value at Close of CD |
| 1 year | 3.90% | $1,039.00 |
| 2 year | 3.90% | $1,079.52 |
| 3 year | 3.30% | $1,102.30 |
| 4 year | 3.10% | $1,129.89 |
| 5 year | 3.10% | $1,164.91 |
| 7 year | 2.90% | $1,221.54 |
PenFed CD: Who It’s Best For
PenFed CDs are best for someone who’s looking for competitive returns on a variety of CD terms. They can also be suited for someone who’s looking for specialty CDs such as Coverdell education savings or IRA certificates.
PenFed CDs may be best suited for someone who is already a PenFed member, but anyone can join the credit union. If you’re looking to join an accessible credit union to do the majority of your banking with — one that offers high rates and no monthly fees across most deposit accounts — you may find that PenFed fits the bill.
PenFed CD Rates vs. Other Financial Institutions
The top APY offered for PenFed’s one-year money market certificate account beats the Federal Deposit Insurance Corp. (FDIC)’s national average interest rate for one-year CDs and the rates of many brick-and-mortar competitors. Competing banks offer as low as 0.01% on some one-year CDs. However, you can find online-only banks with better rates of up to 5%, and some don’t require a minimum opening deposit.
| Bank | APY on 1-Year CD* | Minimum Opening Deposit | $2,500 Deposit Value at Close of CD |
| PenFed | 4.00% | $1,000 | $2,600.00 |
| Bank of America | 0.03% (fixed-term CD) 4.00% (flexible CD) | $1,000 | $2,500.75 (fixed-term CD) $2,600 (flexible CD) |
| Capital One | 5.00% | $0 | $2,625 |
| Chase | 0.01% (standard rate) 2.00% (relationship rate) | $1,000 | $2,500.25 (standard rate) $2,550 (relationship rate) |
| Citibank | 2.00% for balances below $100,000 (fixed-rate CD) | $500 | $2,501.25 (fixed-rate CD) |
| Discover | 4.70% | $2,500 | $2,617.50 |
| Synchrony | 4.80% | $0 | $2,620 |
Additional Ways To Save With PenFed
PenFed has several other savings products including regular and high-yield savings accounts, a money market account and an IRA savings account. These deposit accounts feature lower minimum opening deposit requirements, more flexibility and no monthly fees. However, they usually pay lower rates than PenFed’s certificates.
| PenFed Account | APY* | Minimum Deposit |
| Premium Online Savings | 3.00% | $5 |
| Regular Savings | 0.05% | $5 |
| Money Market Savings | 0.05% on balances less than $10,000 0.10% on balances of $10,000 to $99,999 0.15% on balances over $100,000 | $25 |
| IRA Savings | 0.05% | $25 |
PenFed Premium Online Savings
The PenFed Premium Online Savings account is appealing for its competitive return, flexibility and low $5 minimum deposit requirement. Its APY is more than six times the national average savings rate of 0.48%. It compounds interest monthly, but the main drawback is that you won’t get an ATM card or ATM access.
PenFed Regular Savings
This basic savings account is needed for PenFed membership. While the national average APY is higher than what this account earns, this account is accessible and requires a low $5 minimum deposit. It also has monthly compounding interest.
You can request a free ATM card to use at more than 85,000 ATMs without fees. However, you’ll pay a $1.50 withdrawal fee for ATMs that aren’t PenFed-branded.
PenFed Money Market Savings
Requiring a $25 minimum opening deposit, the PenFed money market savings account offers the most flexibility with free checks and an ATM card. Like with the basic savings account, you’ll pay $1.50 for non-PenFed ATM withdrawals.
The APYs for PenFed money market accounts are tiered based on your balance, but all fall short of the 0.75% national average for money market accounts.
PenFed IRA Savings
The PenFed IRA savings account is a tax-advantaged option with more flexibility for deposits and withdrawals than an IRA CD. Also available in SEP, traditional and Roth versions, it requires a $25 minimum opening deposit, and IRA contribution limits will apply. There aren’t PenFed-specific early withdrawal penalties or ATM access.
One drawback is that the low APY isn’t ideal for growing your retirement savings compared to certificates and various securities. Tax penalties for early withdrawals from IRA accounts can apply. To open the account, you need to contact PenFed or download a form to upload, mail or fax.
The Bottom Line: Is a PenFed CD Right For You?
Offering competitive rates and many terms, PenFed’s CDs can be right for personal, education or retirement savings needs. They all have typical minimum opening deposit requirements and fixed rates that often beat competitors’ rates. But if you’re interested in specialty CD options such as no-penalty and bump-up CDs, you’ll need to check other institutions.
FAQ: PenFed Credit Union CD Rates
A PenFed certificate is the same as a CD since you commit a lump-sum deposit for a set term and get a fixed interest rate. Credit union certificates sometimes pay better rates than bank CDs, though.
While PenFed originally served military members, it now has an open membership policy. You can become a member by applying and opening a savings account with the institution.
PenFed certificates all have early withdrawal penalties. Withdrawing early from a six-month certificate costs 90 days’ interest, while early withdrawals from longer-term certificates cost 365 days’ interest and 30% of the full term’s interest.
*Rates accurate as of May 28, 2024
**Data accurate at time of publication
If you have feedback or questions about this article, please email the MarketWatch Guides team ateditors@marketwatchguides.com.
Ashley DonohoeContributor
Ashley Donohoe is a personal finance writer based in Cincinnati. She has written for several personal finance websites such as GoBanking Rates, The Balance and PocketSense.
Jared MacarinEditor
Jared is an editorial veteran who joined Home Solutions after more than 20 years in the newspaper industry. He has written, edited or designed more than 50 newspapers across the country, winning numerous awards. Jared has also edited and wrote for Forbes Advisor, Lending Tree, The Streamable and Lonely Planet. When he isn’t working, Jared enjoys spending time with his wife on outdoor adventures, watching sports and reading.
