Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate banking products to write unbiased product reviews.
Pentagon Federal Credit Union — more commonly known as PenFed — is a national credit union that offers a variety of banking services, including certificates of deposit.
Learn more about PenFed CDs below.
Who is Eligible for PenFed CDs?
Though PenFed was originally designated for only customers with military ties, that is no longer the case. Now anyone can become a member, regardless of military status, simply by opening a savings account and depositing $5. Once you've opened the savings account, you're free to open other accounts like CDs.
Types of CDs Offered by PenFed
PenFed offers standard, IRA CDs, and unique Coverdell Education CDs.
The credit union's standard CDs are called Money Market Certificates and range from 6 months to 7 years.
If you're unfamiliar with an IRA CD, it's a type of retirement account that lets you invest money in a CD. This type of CD suits people who expect to retire in a few years because it's secure and low-risk. PenFed IRA certificates range from 1 year to 7 years.
PenFed also has Coverdell Education Certificates. This is a type of custodial account parents can open for minors to help pay for educational expenses.
PenFed CD Rates Today
PenFed's CD rates are much higher than the national average CD rates. Still, PenFed's rates aren't quite in line with the best CD rates currently available.
PenFed MMC Rates
A PenFed Credit Union Money Market Certificate has a $1,000 minimum opening deposit.
PenFed CD rates range from 3.00% to 4.00% APY (Annual Percentage Yield).
Here is a full breakdown of PenFed CD rates:
| CD Term | APY |
| 6 months | 3.00% |
| 1 year | 4.00% |
| 15 months | 4.00% |
| 18 months | 4.00% |
| 2 years | 4.00% |
| 3 years | 3.40% |
| 4 years | 3.20% |
| 5 years | 3.20% |
| 7 years | 3.00% |
PenFed IRA CD Rates
PenFed IRA Certificates have a $1,000 minimum opening deposit.
PenFed IRA CD rates are good, but the best IRA CD rates are even more competitive right now.
| Term | APY |
| 1 year | 3.90% |
| 2 years | 3.90% |
| 3 years | 3.30% |
| 4 years | 3.10% |
| 5 years | 3.10% |
| 7 years | 2.90% |
PenFed Coverdell Education CD Rates
PenFed Coverdell Education Certificates have a $500 minimum opening deposit. You can invest up to $2,000 annually in a PenFed Coverdell Education CD. Here are the current rates for each term.
| Term | APY |
| 1 year | 3.90% |
| 2 year | 3.90% |
| 3 year | 3.30% |
| 4 year | 3.10% |
| 5 year | 3.10% |
| 7 year | 2.90% |
PenFed CD Pros and Cons
| Pros | Cons |
|
What Influences PenFed CD Earnings
Choosing a CD at the right time can help you lock in a competitive rate. Be mindful of national CD trends to get the most out of PenFed CD earnings.
Since CDs also pay fixed interest rates, you should maintain funds in an account until CD maturity. Otherwise, an early withdrawal charge can take away from your total interest earnings.
We'll explain more about how these factors affect your CD earnings below.
Role of the Federal Reserve
The Federal Reserve has a committee in charge of managing the federal funds rate. Banking products, including CDs, are impacted if the federal funds rate changes. You'll see CD rates rise when the federal funds rate goes up and CD rates drop when the federal funds rate goes down.
Staying informed about when the next Fed meeting will take place can help you monitor any potential changes regarding the federal funds rate.
Reaching CD Maturity
PenFed CDs have the following early withdrawal penalties:
- For a 6-month term, the penalty is 90 days of dividends earned
- For terms longer than 6 months, the penalty is either the last 365 days of dividends earned (if withdrawal is made within the first year) OR 30% of the gross amount of dividends earned if the CD had reached its full term (for withdrawals made beyond the first year)
If you withdraw from a PenFed IRA CD before you're 59 1/2, you'll pay additional penalties. IRA CDs usually charge a 10% penalty for withdrawals made before you are 59 1/2.
Experts say choosing a CD that matches a financial goal can help you avoid penalties.
How PenFed CD Rates Compare
PenFed CDs vs. Navy Federal CDs
Navy Federal CD rates range from 2.75% to 4.85% APY on standard CDs, so the best choice between Navy Federal and PenFed could come down to which term you want. With Navy Federal, you can choose a term from three months to seven years, and rates are tiered based on the amount of your deposit.
Navy Federal pays an even higher rate — 4.15% to 5.30% APY — on the Navy Federal Credit Union EasyStart℠ Certificate. An EasyStart Certificate only requires a $50 deposit (much less than the $1,000 required for PenFed CDs).
Membership isn't as easy with Navy Federal as it is at PenFed, though. To join Navy Federal or open its CDs, you must be an active duty or retired military service member, veteran, Department of Defense employee, or immediate family member of a military member.
Navy Federal Credit Union Review
PenFed CDs vs. USAA CDs
Again, the higher CD rate between these two institutions depends on which term you choose. USAA Fixed Rate CD rates are competitive on several terms; it pays up to 4.90% APY. USAA offers more term options than PenFed, with terms as short as 30 days.
The downside of USAA is that membership is not open to just anyone. You must be a U.S. military member, veteran, precommissioned officer, or spouse or child of a current USAA member.
USAA Bank Review
Should You Invest in a PenFed CD?
PenFed CDs may be a good option if you want a CD that pays a high interest rate. Other banks and credit unions pay even higher rates right now, but PenFed CDs might be worth it if you have other accounts at PenFed and want to do all of your banking with the same company.
Why You Should Trust Us: How We Reviewed PenFed CDs
To review PenFed CDs, we used Business Insider's certificate of deposit methodology, which considers interest rates, minimum deposit requirements, CD term variety, and early withdrawal penalties. We also look at the credit union's overall ethics, and the quality of its mobile app and customer service.
PenFed CD Rates FAQs
Are PenFed CD rates usually competitive?
PenFed CD rates are much higher than national average CD rates, but they aren't the highest rates out there right now. Some of the best online banks pay even better rates.
Do PenFed CD rates change often?
PenFed CD rates can change at any moment. That said, PenFed CDs often fluctuate because CD rates are influenced by the Fed's decisions. When there's a rate hike or rate cut, the CDs will go up or down accordingly.
What's different about PenFed CDs?
PenFed has a 7-year term, which is a unique term length that isn't usually offered by financial institutions. You can also get a variety of IRA CDs or a Coverdell Education CD at PenFed, which you might not find elsewhere.
Are PenFed CDs safe?
PenFed is a legitimate credit union. It is federally insured by the NCUA, so money in CDs is secure for up to $250,000 per depositor, per account ownership category.
Is it easy to become eligible for a PenFed CD?
PenFed membership is now open to anyone, regardless of their military ties. To become a member, you just need to fill out a form, open a savings account, and deposit at least $5.
Aly J. Yale is a writer and editor with more than 10 years of experience covering personal finance topics including mortgages and real estate. She contributes to Personal Finance Insider’s mortgages and loans coverage.ExperienceAly began her journalism career as reporter, and later an editor, for several neighborhood sections of the Dallas Morning News.Her work has been published in several national publications, including Bankrate, CBS, Forbes, Fortune, Money, Newsweek, US News and World Report, the Wall Street Journal, and Yahoo Finance. She’s also contributed to a variety of mortgage and real-estate publications, such as The Balance, Builder Magazine, Housingwire, MReport, and The Mortgage Reports.Her favorite personal finance tip is to schedule regular check-ins to make sure your credit cards, savings accounts, and other financial vehicles still align with your budget and financial goals. She is a member of the National Association of Real Estate Editors (NAREE).ExpertiseAly’s areas of personal finance expertise include:
- Mortgages
- Loans
- Real estate
- Insurance
EducationAly is a graduate of Texas Christian University, where she received a bachelor’s degree in radio/TV/film and news-editorial journalism.
Banking Editor
Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circ*mstances and overcoming their fears around money.ExpertiseSophia's expertise includes:
- Bank accounts
- Savings and CD rate trends
- Budgeting
- Saving
- How banks operate
EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.
Compliance and Operations Associate
Evelyn He is a Compliance and Operations Associate on the Personal Finance team to ensure content accuracy and editorial independence so readers get up-to-date and objective financial advice.The compliance team's mission is to provide readers with fact-checked and current stories so they can make informed financial decisions. The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team.
Top Offers From Our Partners
SoFi Checking and Savings Earn up to 4.60% APY on savings balances and up to a $300 bonus with qualifying direct deposit. FDIC Insured. There is no minimum direct deposit amount required to qualify for the 4.60% APY for savings. Members without direct deposit will earn up to 1.20% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. To earn the $300 bonus, the customer must complete a direct deposit with a minimum initial deposit of $250 in a new SoFi Checking and Savings account within 45 days of clicking to qualify (offer expires 12/31/24).
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
