Pentagon Federal Credit Union review 2024
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“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Published 8:00 a.m. UTC Jan. 23, 2024
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Pentagon Federal Credit Union
Pros
- Easy for anyone to join.
- Competitive APYs.
- Wide ATM network.
Cons
- Requires you to have a savings account for membership.
- Money market certificates have steep early withdrawal penalties.
Pentagon Federal Credit Union basics
- Checking accounts: PenFed Free Checking, PenFed Access America Checking.
- Savings accounts: PenFed Regular Savings, PenFed Premium Online Savings.
- Money market: PenFed Money Market Savings Account.
- Certificate of deposit (CD): PenFed Money Market certificates.
- Other Accounts: IRAs, credit cards, auto loans mortgages, personal loans, student loans.
- Bank branches or online only: Branches and online.
About Pentagon Federal Credit Union
Established in 1935, Pentagon Federal Credit Union (PenFed) is one of the largest credit unions in the U.S. and serves nearly three million people. Anyone can become a member by opening a savings account with just $5.
The credit union has a wide variety of offerings, including checking and savings accounts and loans. There are branches in the following 13 states, as well as the District of Columbia, Guam and Puerto Rico:
- California.
- Florida.
- Georgia.
- Hawaii.
- Maryland.
- North Carolina.
- Nebraska.
- New Jersey.
- New York.
- Pennsylvania.
- Texas.
- Virginia.
- Wisconsin.
Checking
PenFed offers two checking accounts: Free Checking and Access America. You’ll need to make a $25 initial deposit to open either account. You also have to be a PenFed member, which requires having a savings account with an initial deposit of $5.
Free Checking has no monthly fees or minimum balance requirements. It also doesn’t earn any interest.
Access America Checking has a $10 monthly fee (waived by having direct deposits of at least $500 a month or maintaining a daily balance of at least $500). This account also earns 0.15% APY on a balance of less than $20,000 and 0.35% APY on balances between $20,000 and $50,000.
Like with many checking accounts, you can set up direct deposits and get your paychecks up to two days early with either of PenFed’s checking accounts. You’ll have access over more than 85,000 fee-free ATMs. You can also send Zelle payments for free via the mobile app.
Both accounts have overdraft protection. You can use your savings to cover insufficient funds in your checking account without paying a fee, and overdraft lines of credit of $300 and more are also available (though you have to be approved for one). You’ll receive your first 50 checks for free.
Savings
PenFed offers two main savings accounts: Regular Savings and Premium Online Savings, both of which you can open with just a $5 deposit that will gain you membership to the credit union. The interest is compounded monthly and dividends are added to your account each month.
The Regular Savings account offers an APY of 0.05% (which is uncompetitive in any interest rate landscape, but especially this one) and has no monthly fee. It also comes with ATM access, which could come in handy. There are over 85,000 PenFed ATMs you can use for free, however there is a $1.50 fee to use a third party ATM. This account can be opened online, over the phone or in person.
The Premium Online Savings offers 3.00% yield with no monthly fee. This yield is not as high as many other online savings accounts that are touting yields around 5.00%. This account can only be opened online and does not have ATM access, you’ll need to transfer funds in and out of this account via a linked checking account.
Money market
In addition to savings and checking accounts, PenFed has a money market account — which are often referred to as a hybrid between a savings and checking account — called Money Market Savings. There’s no monthly fee and there’s a minimum deposit of $25.
Like many savings accounts, Money Market Savings earns interest. The yield is 0.05% on account balances less than $10,000, 0.10% on balances between $10,000 and $99,999, and 0.15% on balances over $100,000.
Like a checking account, you get checking writing abilities and ATM access. The account comes with free checks, too.
Money market certificates
PenFed offers CD-like products called money market certificates, which come with a variety of term lengths and competitive yields, with the highest rates being for the 1-year and 18-month certificates.
Each has a minimum balance requirement of $1,000 and compounds dividends daily, except for those on the six-month certificate, which earn dividends on a simple interest basis.
When you open the certificate, you will choose what you’d like to do at maturity: Your options include automatically renewing your certificate, moving the funds into another PenFed account or receiving a check. You can change this selection at any time during the term of the certificate.
If you have to access the funds before maturity there are penalties. For certificates with terms less than six months you’ll pay up to 90 days’ of dividends. For certificates with terms longer than six months, you’ll pay up to 30% of the dividends you would’ve earned at maturity for terms of more than six months.
Other products
- IRAs. At PenFed, you can buy both IRA certificates and open an IRA savings account.
- Credit cards. You can choose from up to four credit cards at PenFed, most of which have no annual fee.
- Auto loans. PenFed offers the ability to purchase a car or refinance.
- Mortgages. The credit union has a variety of mortgage offerings, including primary mortgages, HELOCs and refinancing.
- Personal loans. PenFed offers personal loans for debt consolidation, home improvement, transportation, medical and dental and other life events. You can apply for up to $50,000 total.
- Student loans. PenFed has student loan refinancing and they partner with Ascent to issue in-school student loans.
How Pentagon Federal Credit Union stacks up
Pentagon Federal Credit Union vs. Navy Federal Credit Union
PenFed membership is open to anyone, but to join Navy Federal Credit Union, you need to be an active or former member of the military, work for the Department of Defense or have someone in your immediate family or household who is a member.
The rates on PenFed’s Premium Online Savings account are higher than the rates you’ll find on Navy Federal’s savings accounts. However, the rates on the Navy Federal Credit Union Money Market Savings Account beat PenFed’s, but you need to maintain a minimum daily balance of $2,500 to earn dividends.
Pentagon Federal Credit Union vs. USAA
USAA Bank also has strict eligibility requirements. You have to be an active or former military member, or have someone in your immediate family who is.
The savings rates at USAA Bank are also lower than with PenFed’s Premium Online Savings account. However, if you’re eligible and looking for a bit more guidance with your finances, it may be worth considering USAA Bank.
The bank has an advice center where you can find personalized advice and tools on everything from buying a car to managing debt, and it comes with perks like deals on travel and rental cars.
Pentagon Federal Credit Union vs. State Department Federal Credit Union
While the State Department Federal Credit Union has a few more ways to be eligible than Navy Federal and USAA Bank, it still has strict eligibility requirements — especially compared to PenFed, which anyone can join.
The State Department Federal Credit Union’s rates are lower than PenFed’s Premium Online Savings. It does, however, offer higher rates on its money market accounts.
Frequently asked questions (FAQs)
PenFed is a solid option for people looking for competitive rates on savings accounts and money market certificates, as well as other banking products like loans and credit cards. It’s also easy to join.
Money in both credit unions and banks are insured up to $250,000 per depositor — credit unions by the National Credit Union Administration and banks by the Federal Deposit Insurance Corporation.
You can open a savings account with as little as $5.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
