PenFed Credit Union (Pentagon Federal Credit Union) is a credit union that specializes in banking for members of the armed forces, Department of Defense and Homeland Security, military associations, as well as eligible veterans, retirees and their families.
If you are not at all affiliated with any of these departments or the armed forces, you can become an eligible customer if you donate to a select charitable military organization of PenFed’s choosing.
PenFed offers checking and savings accounts, loans, money market accounts, IRAs and many more banking products. Before opening an account with PenFed, consider the details of each specific account to see if it is the best place to do your banking.
- Who Is PenFed Credit Union Best For?
- Who May Want To Skip PenFed Credit Union?
- Types of Accounts Available
- How To Bank With PenFed Credit Union
- Availability of Funds
- Summary of PenFed Credit Union
Who Is PenFed Credit Union Best For?
PenFed Credit Union is best for anyone looking for a traditional banking experience and is either affiliated with the U.S. armed forces, military or is in the Department of Defense or Department of Homeland Security. However, you can still bank with PenFed if you aren’t affiliated with any of these. Simply make a select donation to any of these military programs that PenFed supports:
- Military Heroes Fund
- Dream Makers
- Asset Recover Kits
- The Defenders Lodge
If you are looking to open a new account or change your financial institution, consider the pros and cons of banking with PenFed.
|Pros and Cons of Banking With PenFed Credit Union|
|24/7 access to your account with PenFed’s mobile app||Physical branches are not located throughout the U.S.|
|Grow your money to pay for education with Coverdell Education Savings Certificates||If not affiliated with the U.S. armed forces, military, Department of Defense or Department of Homeland Security, you must donate to a select organization to be eligible to bank with PenFed|
|Access to PenFed Wealth Management Center||Minimum opening deposit required to open checking account|
Who May Want To Skip PenFed Credit Union?
If you are not affiliated with the U.S. armed forces or the Department of Defense or Department of Homeland Security, you may want to skip PenFed because you will have to donate to a military charitable organization to be eligible.
If you have the money to donate and want to, then you need to decide if your banking needs and habits align with what PenFed Credit Union is best for or worst for before banking with this financial institution.
Who Is PenFed Credit Union Best For and Worst For?
|Best For||Worst For|
|Creating a relationship with employees at a physical branch if you live near one||People who like banking in person but do not live near a physical branch|
|Interest checking with high APY rates||Customers who want to avoid monthly service fees|
|Someone who is affiliated with the U.S. armed forces, military, Department of Defense or Department of Homeland Security||Customers not comfortable with digital banking like online wallets|
Types of Accounts Available
PenFed Credit Union has an array of accounts available to its customers, but those accounts have varying fees and features to consider. Depending on your account balance, banking expectations and financial habits, certain accounts may be more worth your money than others.
Consider the account types, features, fees and rates before opening an account.
|Types of PenFed Accounts|
|Account Type||Features||Rates||Fees||Comparative Rates|
|Access America Checking||$10 monthly service fee if balance is below $500||Wells Fargo’s Everyday Checking has no interest with a $10 monthly service fee|
|Regular Savings||Accessible online, through the mobile app and at a physical branch||0.05% APY on all account balances||$5 minimum deposit to open account||Bank of America’s Standard Savings APY is 0.03%|
|Premium Online Savings||This account is only available online and through the mobile app||1.60% APY for account balances below $250,000||$5 minimum deposit to open account||Navy Federal’s online savings APY is 0.25%|
|Money Market Accounts||No fees for both Money Market Savings and Money Market Certificates||Ally Bank has an APY of 0.75% on all account tiers|
|Certificate of Deposit||Coverdell Education Savings Certificates||1.70% APY for a 3-year term; terms range from 1 to 7 years||$25 minimum opening deposit||Santander Bank has an APY of 1.80% for an 18-month term|
|Individual Retirement Account||Ally Bank has an IRA High Yield CD APY rate of 2.00% for a 12-month term|
|Investment (Nonbank) Option||PenFed Wealth Management offered through CUNA Brokerage Services, Inc.||Rates depend on your unique plan||Fees depend on your unique plan||N/A|
|Loans||Fees will depend on your specific loan agreement and terms|
These account types, rates and fees are competitive with other financial institutions that are not credit unions like Chase Bank, Capital One and Chime Bank, as well as other international credit unions.
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PenFed’s Access America Checking offers a debit card with over 68,000 fee-free ATMs. This is the perfect account for a customer looking to link a checking account with their digital wallet, and it competes with the best checking accounts out there.
- You can earn 0.50% APY on your account balance between $20,000 to $50,000.
- You can earn 0.20% APY on your account balance below $20,000.
- Online and mobile app availability
- Overdraft protection available
- Need $500 account balance in order to waive monthly fee
- Overdraft protection needs credit approval
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PenFed Credit Union’s Regular Savings account is competitive with all the other basic savings accounts out there. Using this account establishes your part ownership in PenFed.
- 0.05% APY for all account balances
- Up to $250,000 is backed by the NCUA
- This account is accessible by ATM with a free ATM card given to you by PenFed.
- Dividends are compounded monthly and credited to your account.
- $5 opening deposit required
- The APY rate is subject to change at any time.
PenFed’s Premium Online Savings is worth considering if you want to grow your money. This is another account that can help you easily establish a membership with PenFed Credit Union.
- High APY rates
- Free online transfer
- First $250,000 in your account is NCUA-insured
- No monthly maintenance fees
- The APY rate is only for your first $250,000 in the account.
- A $5 minimum deposit is required to open the account.
Money Market Account
PenFed offers three different types of Money Market accounts, but one will be detailed as an IRA product. The other two are Money Market Savings and Money Market Certificates.
- Money Market Savings features high APY rates for account balances at $10,000 and above.
- Money Market Certificates features high APY rates, but in a locked predetermined term or maturity.
- Money Market Savings has no monthly service fees and you can access your funds online.
- Money Market Certificates allows you to renew or close at the end of your term.
- Money Market Savings doesn’t offer its highest APY rates until you have an account balance above $100,000.
- Money Market Certificates require a minimum of $1,000 to begin your investment.
PenFed offers three certificates of deposit products: Money Market Certificates, IRA Certificates and Coverdell Education Savings Certificates. The Coverdell Education Savings Certificates will only be detailed in this section as the other two are detailed in other sections.
- Coverdell Education Savings Certificates are tax-free because this CD is specifically for education.
- You can choose from a variety of terms, depending on your financial needs.
- First $250,000 saved is insured by the NCUA
- Funds can be used for eligible elementary and secondary school tuitions
- $500 minimum deposit needed to begin investing
- Can only contribute $2,000 maximum to your CD each year
Individual Retirement Accounts
PenFed Credit Union offers three different IRA products: IRA Certificates, IRA Premier Accounts and IRA Savings Accounts. Each has its own unique APY and features available.
- IRA Certificates feature daily compounds that are paid out monthly.
- IRA Premier Accounts feature the same kind of flexibility as a liquid investment.
- IRA Savings Accounts have an opening account deposit of $25.
- All three products are available as an IRA, Roth or SEP IRA.
- Traditional IRAs have no taxes taken out until distribution.
- Roth IRAs are perfect for those who plan on retiring in a high-income bracket.
- SEP IRAs have no taxes taken out until distribution and contributions can generally be deducted come tax season; perfect for the self-employed.
- Traditional IRAs must have minimum distributions made at age 70 1/2.
- Roth IRAs will tax your contributions.
- SEP IRAs have a limit to annual contributions of 20% of net earnings.
Investment (Nonbank) Options
PenFed’s Wealth Management uses CUNA Brokerage Services, Inc. as its investment platform. Simply fill out a quick application to connect with a financial advisor.
The investment products are for all of life’s big stages.
- IRA Options
- Find a unique investment strategy that works for your unique goals.
- CBSI is a member of FINRA/SIPC.
- Not NCUA/NCUSIF/FDIC-insured
- CSBI is a separate institution and does not have the guarantee of returns insured by PenFed.
PenFed Credit Union offers many different loan products. Depending on your needs and banking habits, you can find a specific loan agreement with your financial advisor:
- Auto Loans
- New Auto Loan
- Used Auto Loan
- Refinance New Auto Loan
- Mortgages and Home Equity
- Conventional Fixed Rate Mortgage: Available to all credit union members — these loans are for any dollar amount below $484,350.
- VA Loans: Available to veterans, service members and eligible beneficiaries like family members — this loan’s dollar amount is the same as the most current VA home loan limits set by the U.S. Department of Veteran Affairs.
- Jumbo Loan: Available to all credit union members — this loan is for $484,350 to $2 million.
- Personal Loans
- You have immediate access to your loans and no hidden fees or origination fees.
- Student Loans
- In-School Student Loan Options: for students’ higher education needs
- Parent Loan: Pay for your student and take responsibility for the loan.
- Scholarship Search: access to over 3.5 million scholarships
The pros and cons of these loans really depend on your specific loan agreement and loan term. Consider your banking habits and banking history before signing up for any loans.
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How To Bank With PenFed Credit Union
Banking with PenFed Credit Union is easy. There are four major ways to bank with PenFed:
- Visit a PenFed branch using the online locator.
- Call a customer service representative at 800-247-5626.
- Email all inquires to PenFed Credit Union.
- Use the mobile app and send a message via online banking.
You can use either PenFed’s online banking features or its award-winning mobile app. Both give you 24/7 access to your funds from anywhere in the world (that has service or Wi-Fi). The mobile app gives you access to your funds, allows money transfers and deposits checks. Online banking can do the same things the mobile app does except for depositing checks.
There are many normal fees associated with PenFed’s banking products like check stop payment fees and out-of-network ATM withdrawal fees, but the most common fee you will have to deal with is the monthly maintenance fee for your Access America Checking Account.
The fee is a $10 monthly maintenance fee that can be waived if you have a daily account balance minimum of $500 or you make a minimum of $500 in direct deposits into this account each month.
Availability of Funds
The availability of funds depends on how, when and for how much you deposit into your account.
- Same business day availability of receiving deposit:
- Cash and personal check deposit up to $200
- Direct deposit
- Wire transfers and electronic deposits
- Nonpersonal check deposits up to $500
- U.S. Treasury checks
- For checks over $5,000, the credit union can hold onto any portion of that check above $5,000 for what it deems a “reasonable” length of time.
Summary of PenFed Credit Union
Ultimately PenFed Credit Union works well for service members, active military, veterans, military beneficiaries and employees of the Department of Homeland Security and/or Defense.
The benefits and drawbacks of PenFed depend on your banking expectations.
|Benefits and Drawbacks of PenFed Credit Union|
|High APY for Money Market Accounts||If not affiliated with U.S. armed forces, must make a donation to join the credit union|
|Checking accounts earn interest||Checking account has a monthly maintenance fee|
|Access to PenFed Wealth Management Center||Physical branches are not throughout the U.S.|
PenFed Credit Union is competitive with the best banks out there for anyone looking to grow their money and to have a modern banking experience. If you are a member of the U.S. armed forces or a beneficiary, this credit union is worth your money.
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Rates and fees are accurate as of Dec. 12, 2019, and are subject to change. This content is not provided by PenFed Credit Union. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone and have not been reviewed, approved, or otherwise endorsed by PenFed Credit Union.