PenFed Credit Union review: Competitive rates, low fees, and outstanding member benefits

If you're interested in switching to a credit union, PenFed Credit Union may be able to answer most of your banking needs. This credit union offers solid rates, a diverse product lineup, and exceptional member benefits. 

With a history dating back to 1935, PenFed has become one of the largest credit unions in the country, serving almost 3 million members. We’ll explore PenFed's features and products, helping you decide if it's the right choice.

About PenFed Credit Union

Pentagon Federal Credit Union was established in 1935 to serve U.S. military and government employees. Today, it has 2.9 million members and is the second-largest credit union in the country, with nearly $35 billion in assets. 

The credit union has also expanded its membership to include just about anyone. You can apply as a U.S. citizen or a permanent U.S. resident. To become a member, you must open and maintain a savings account with a minimum balance of $5. Membership perks include discounts, advice, and a financial hardship center offering borrower assistance. 

PenFed offers a holistic suite of financial products and services. This includes checking and savings accounts, money market accounts, and certificates of deposit (CDs). The credit union also offers personal loans, auto loans, mortgages, and credit cards. 

PenFed is federally insured by the NCUA and is an Equal Housing Lender.

PenFed Credit Union Bank Accounts

PenFed Checking accounts

PenFed has two checking accounts: Free Checking and Access America.

The Free Checking account is a good choice for those who want to avoid minimum balance requirements and monthly fees. While it doesn't earn interest, the lack of fees makes it a cost-effective option for everyday banking needs.

The Access America account offers up to 0.35% APY on your checking account funds — rare for most checking accounts. But to earn the top rate, you must keep a daily balance of at least $20,000 (or earn 0.15%). That may be hard to attain for most users. 

This account has a $10 monthly fee, which you can waive by keeping a daily balance of at least $500 or receiving at least $500 in monthly direct deposits. 

Both accounts have a free debit card, mobile check deposit, and access to over 85,000 ATMs nationwide. You can access your paycheck up to two days early via direct deposit. 

PenFed Savings Accounts

PenFed’s primary savings account is its Premium Online Savings account, which offers a competitive rate and no fees. 

• APY: 3.00%
• Monthly fees: $0
• Minimum initial deposit: $5 

You may be able to find higher interest rates — up to 5.00% APY — at leading online banks. But, you may not get access to the full suite of products that PenFed offers. You’ll also automatically become a PenFed member just by opening an account. 

PenFed also offers a Regular Savings account, which offers a paltry APY — 0.05% — but has ATM access, making it easy to transfer funds to other accounts. 

PenFed Money Market Account 

• APY: Up to 0.15% 
• Minimum deposit to open: $25
• Monthly fees: $0 

PenFed's Money Market Savings account offers tiered interest rates based on account balance:

• 0.05% APY on balances below $10,000
• 0.10% APY on balances of $10,000 to $99,999.99
• 0.15% APY on balances of $100,000 or more

The Money Market Savings account is a good option for those with higher balances who want to earn some interest while maintaining easy access to their funds. However, these rates are lower than today’s top money market accounts. Plus, the balance requirement to earn the highest APY is quite steep.

This account has no monthly service fee and a low $25 minimum opening deposit. 

Certificates of Deposit (CDs)

• APY: 3.00%-4.00% 
• Terms: 6 months to 7 years 
• Minimum deposit to open: $1,000
• Early withdrawal penalty: 90 days’ interest (6-month CDs), 365 days’ interest (24-84 month CDs) 

PenFed offers a wide range of CD terms with competitive interest rates, The $1,000 minimum deposit requirement is relatively standard among credit unions and banks. 

Current CD rates are:

• 6-month CD: 3.00% APY
• 1-year CD: 4.00% APY
• 15-24 months CD: 4.00% APY
• 3-year CD: 3.40% APY
• 4-5 year CD: 3.20% APY
• 7-year CD: 3.00% APY

As with most CDs, early withdrawal penalties apply if you access your funds before maturity. You can receive your funds or renew the CD shortly after maturity. 

Other PenFed Credit Union services

In addition to its banking products, PenFed Credit Union offers a range of other financial services: 

• Personal loans: PenFed offers personal loans at competitive rates and with flexible terms. Loan amounts range up to $50,000, with terms of 12 to 60 months. APRs start as low as 8.99%. 
• Auto loans: Members can finance new and used vehicles through PenFed, with rates as low as 4.47% APR. Loan terms range from 36 to 84 months, and financing is available up to 125% of the vehicle's value (a maximum of $150,000).
• Mortgages: PenFed offers a variety of mortgages, including conventional, FHA, VA, and jumbo loans. Members can choose from fixed and adjustable-rate mortgages, with competitive rates and terms.
• Credit cards: PenFed has a selection of rewards cards, including cash back and travel rewards. Popular options include the PenFed Platinum Rewards Visa Signature® Card, which offers 5X points on gas purchases and 3X points on supermarket purchases, and the PenFed Pathfinder® Rewards Visa Signature® Card, which offers 4X points on travel purchases and a $100 annual travel credit.

PedFed Credit Union fees

Some PenFed accounts have low monthly fees that are easy to avoid. For instance, the Access America Checking account has a $10 monthly fee. You can waive this fee with monthly direct deposits of $500 or more or by maintaining a daily balance of at least $500. 

Like most financial institutions, PenFed Credit Union also charges certain service fees. Here is a breakdown of some of the most common fees:

• Overdraft Fee: $15
• Non-Sufficient Funds (NSF) Fee: $30
• Domestic wire transfer: $25
• International wire transfer: $30
• Outgoing Wire Transfer Fee: $25 per transfer
• Out-of-network ATM fee: $1.50

You can avoid many of these fees by maintaining sufficient account balances or setting up overdraft protection.

PenFed Credit banking experience

Online and mobile banking platform 

PenFed's online banking platform helps members manage their accounts, pay bills, and transfer funds. It includes features like: 

• Mobile check deposit
• Bill pay
• Account alerts
• P2P payments
• ATM locator

PenFed's mobile app, available for iOS and Android devices, has mixed reviews. It has 3.2/5 stars on the Apple App Store and 3.5/5 on Google Play. Some users report difficulty making payments and poor user experience and functionality. 

PenFed has around 50 physical branches across the U.S., which is somewhat limited compared to larger banks. 

Customer service

PenFed Credit Union offers customer support via phone, email, and live chat. The customer service team is available Monday through Saturday from 8:00 AM to 8:00 PM ET. You can also reach customer service 24/7 by live chat or email. 

Members generally report positive experiences with PenFed's customer service. On Trustpilot, PenFed has a rating of 4.2 out of 5 stars, with 79% of reviewers rating their experience as "Excellent" or "Great." Common praise includes the helpfulness and professionalism of the support staff and the quick resolution of issues.

A reliable customer support team isn’t the only highlight. If you open a savings account with a $5 minimum deposit, you become a PenFed member. You’ll get many benefits as a member, such as discounts on insurance policies, more affordable software, and other perks. 

PenFed offers financial assistance programs for members who are enduring financial hardships. Depending on your loan, you may qualify for deferred payments, a forbearance plan, a repayment plan, or a loan modification. 

Account security

PenFed offers NCUA insurance on accounts up to $250,000 as a federally insured credit union. This insurance protects your funds in the event of credit union failure. It provides the same level of protection as FDIC insurance for banks.

In addition to NCUA insurance, PenFed employs various security measures to protect members' personal and financial information. This includes encryption, firewalls, and secure online and mobile banking login processes.

How PenFed Credit Union stacks up

PenFed Credit Union's product offerings and rates are similar to other credit unions and online banks. Here's a quick comparison of PenFed with two popular alternatives: Alliant Credit Union and Ally Bank.

How we rated this bank 

Every bank review we publish has undergone a rigorous editorial process to ensure accuracy and objectivity. Learn more about our methodology here. 

Here are some of the factors that influenced this bank’s overall score: 

• Interest rates: PenFed Credit Union offers competitive interest rates on its Premium Online Savings account and solid rates on CDs. However, the rates on checking and money market savings accounts are lower and require a high balance to earn the maximum APY.
• Fees: The Free Checking account has no monthly fees, and the Access America Checking account has low, waivable fees. However, there are overdraft and wire transfer fees. 
• Requirements: PenFed has no minimums for most accounts and a low $5 deposit to open savings accounts and become a member. The $1,000 minimum for CDs is moderate, and the requirements to waive fees on the Access America Checking account are achievable for most. 
• Product mix: This credit union offers a solid mix of deposit accounts and lending products, including mortgages, auto loans, personal loans, and credit cards. 
• Customer service: PenFed excels at customer service, offering 24/7 support through multiple channels and high customer satisfaction ratings on Trustpilot. 
• Digital experience: While app ratings are mixed, PenFed's mobile app offers essential features like mobile check deposit, Zelle integration, and easy account management.
• ATM & branch access: PenFed members have access to a large network of fee-free ATMs, which is a significant advantage. However, the limited number of physical branch locations may be an inconvenience for some members. There are also fees for out-of-network ATM use.

The bottom line 

While PenFed has much to offer, it’s important to consider your financial needs when choosing a credit union. Some credit unions or online banks offer higher rates for checking and savings accounts. Others may also let you open a brokerage account and invest in stocks — while PenFed currently doesn’t offer that capability. Knowing what you want from a credit union will make finding the right one for your needs easier.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.