PenFed Review

Pentagon Federal Credit Union, or PenFed, offers a traditional banking experience with a diverse platform of attractive financial products. PenFed savings accounts, checking accounts, mortgages, personal loans and other financial products all beat what many traditional and online banks are offering.

The credit union opened its doors in 1935 and has grown into one of the largest in the market. It’s currently headquartered in Alexandria, Virginia, and has 1.75 million members with a collective $25 billion in assets. While originally founded to support the defense community, it has expanded to be much more inclusive.

Military families, government employees and members of certain partner organizations are automatically eligible for membership. However, if you don’t fall within these qualifications, you can make a small donation to an organization chosen by PenFed and you will be eligible.

How PenFed Stacks Up


  • High APY on checking accounts
  • Competitive APY on premium savings account
  • Access to 68,000+ ATMs and 24/7 access via the web


  • Low regular savings APY
  • High minimum deposit for money market certificates
  • Requires membership to access products

What’s Interesting About PenFed

PenFed gives you the relationship-focused experience of a traditional bank while still offering online banking amenities. It has more than 68,000 free ATMs nationwide and a large suite of financial products that help to make it a one-stop-shop for many banking needs.

Things to Consider

Keep in mind that you’ll have to become a member to access PenFed’s products and perks. While anyone can join, it’s an extra hoop to jump through that you won’t necessarily encounter with banks and other traditional lenders.

Checking and Savings Accounts

PenFed’s Access America Checking account offers great rates at 0.20% annual percentage yield (APY) with a daily balance of less than $20,000 and a 0.50% APY for a balance between $20,000 and $50,000. It only requires a $25 minimum deposit, and you can avoid a monthly maintenance fee if you keep a daily balance or make a monthly direct deposit of at least $500.

A PenFed savings account is used to establish your membership. It only requires a $5 deposit, but the APY falls short at just 0.05%. However, there is a premium online savings account option that offers a higher APY at 1.60% with the same $5 minimum to open and no monthly maintenance fee.

Money Market Accounts

A money market savings account can earn more than a regular Pentagon Federal Credit Union savings account (0.05% APY), but you’ll need to bring at least $10,000 to the table in order to tap into its second-tier interest rate — 0.10% APY — and at least $100,000 to earn the 0.15% APY.


PenFed’s money market certificates function as its standard certificate of deposits (CD) and require an investment of at least $1,000. The credit union compounds its dividends daily and pays them out monthly by either putting it back into the certificate, transferring it to another account or sending it with a check.

PenFed also has an option to open a Coverdell Education Savings Certificate to pay for elementary, secondary and college education expenses. This certificate can be opened for as little as $500 and has a maximum annual contribution of $2,000.

Credit Cards

There are several credit cards available through PenFed. First, there’s the Power Cash Rewards VISA Signature® Card, which you can use to earn 2% cash back on travel purchases and 1.5% on all other purchases. There is also the Platinum Rewards VISA Signature® Card, which offers five times the points on gas, three times the points on supermarket purchases and one point per dollar on all other purchases. The Gold VISA® Card is PenFed’s card with the lowest rate on purchases and cash advances, and the Promise VISA® Card lets you take advantage of a card with no fees. You won’t be charged anything for foreign transactions, balance transfers or cash advances when using that card.

All of these cards come with a $100 cash-back statement credit if you spend $1,500 in your first 90 days after opening the account and none of them have an annual fee.

Personal Loans

PenFed offers personal loans up to $25,000 for as low as 6.49% with no origination fees. This is an advantage over some other lenders, who may charge up to 6% for miscellaneous loan costs and fees. You can use your personal loan to consolidate your existing debt, make home improvements or fund any other major expense.

Mortgage Loans

Conventional fixed-rate, adjustable-rate and jumbo home loans are available to PenFed members for 15- and 30-year mortgages. PenFed also offers first-time home buyer programs, low down payment options and VA home loans with interest rates as low as 3% to service members, veterans and their spouses.

Mortgage Refinancing

PenFed’s popular refinancing options include a 5/5 adjustable-rate mortgage (ARM) and a 30-year fixed-rate mortgage. You can use its mortgage refinance calculator to determine what your refinanced payments may look like.

Home Equity Loans and HELOCs

Use the equity in your home to access a home equity line of credit (HELOC) with PenFed. Loans range from $25,000 to $500,000 and have a variable APR of 5% to 6.25%.

With a PenFed HELOC, you’ll have a 10-year withdrawal period where you’ll only be required to make interest payments. You’ll then have an additional 20 years to complete your repayment period.

PenFed also offers benefits like covering most closing costs and waiving its $99 annual fee if you meet certain criteria.

Car Loans

Lastly, PenFed offers new and used auto loans for up to $100,000. Its new auto loans range from 2.99% to 3.49% with terms up to 84 months, while its used auto loans are available for 3.99% to 4.24% with terms up to 72 months for 2014 to 2020 models. All other years qualify for up to 60 months of financing.

The Final Word

Overall, this credit union has a wide array of competitive financial products. PenFed savings accounts (premium), checking accounts, auto loans, personal loans, credit cards, CDs and mortgages all offer good rates and terms.  When it comes to the money market savings and regular savings accounts, you’re better off opting for the premium savings account to maximize your returns.