Pentagon Federal Credit Union, known as PenFed, has earned a stellar reputation for its unwavering commitment to serving members of the armed forces, military affiliates, and federal government employees. In this comprehensive review, we’ll delve into what makes PenFed stand out which we believe is its origin as an exclusive institution for military and government personnel and their families. However, it has expanded its eligibility criteria, making its financial services accessible to everyone.
Pentagon Federal Credit Union Review Quick Overview
Pentagon Federal Credit Union, commonly known as PenFed, is a well-established credit union with a rich history of serving military and government employees. It is the second-largest credit union in the nation, boasting over 2.8 million members and $36 billion in assets. PenFed offers high-yield savings accounts, accessible checking and savings options, and a vast network of fee-free ATMs. While its branch network is limited, its open membership charter allows anyone in the U.S. to join. With competitive rates and a focus on member benefits, PenFed is a strong choice for those seeking financial stability and growth.
Pros and Cons
- High-Yield Savings Account: PenFed’s Premium Online Savings account offers a remarkable annual percentage yield (APY) well above the national average.
- Accessible Accounts: Whether you’re interested in checking or savings accounts, PenFed allows you to start with a modest minimum deposit, ensuring financial inclusivity.
- Extensive ATM Network: With access to over 85,000 fee-free ATMs nationwide, your money is always within reach.
- Open National Membership: PenFed’s open charter membership policy means anyone across the United States can join, providing flexibility and accessibility.
- Competitive APYs: PenFed ensures that its rates remain competitive, meaning you’ll earn more from your savings.
- Daily Compounded Checking Dividends: The dividends on PenFed’s checking accounts are compounded daily and paid monthly, maximizing the returns on your investments.
- Low Savings Account Yield: While PenFed’s basic savings account is a reliable choice, it offers a lower yield compared to other options in the market.
- Limited Branch Network: Although PenFed boasts around 50 branches, they are primarily concentrated in just 13 states, which might be inconvenient for in-person banking needs.
- Waivable Monthly Fee: One of the checking accounts carries a monthly fee that can be waived under certain conditions, but it may not suit everyone’s financial habits.
- Direct Deposit Requirement: To earn dividends in one of the checking accounts, you’ll need to have recurring direct deposits, which may not be the best fit for all customers.
- Penalties for Early Money Market Certificate Withdrawals: If you need to withdraw funds prematurely from Money Market Certificates, be cautious of the steep penalties involved.
- Savings Account Membership Requirement: To become a member, you must open and maintain a savings account, which might not align with everyone’s financial preferences.
PenFed’s Banking Products
PenFed offers a diverse range of banking products, including:
- Premium Online Savings Account: This account stands out with an above-average APY and no monthly service fees.
- Regular Savings Account: While it offers a lower APY, it allows in-branch openings and provides easy ATM access.
Certificates of Deposit (CDs)
PenFed offers a variety of CDs, including Money Market Certificates. These CDs come with different term options and offer competitive rates, making them a good choice for savers.
Money Market Accounts
The Money Market Savings account offers tiered APY, with the highest yields for balances over $100,000. However, you may find more competitive rates at other institutions.
PenFed provides two primary checking accounts:
- Free Checking: This account is fee-free, requiring no minimum balance and offering access to a vast network of fee-free ATMs.
- Access America Checking: While this account has a $10 monthly service fee, it can be waived with a direct deposit of at least $500 per month or by maintaining a daily balance of $500 or more. It also offers dividends and a higher APY for certain balances.
Other Services and Features
Apart from deposit accounts, PenFed Credit Union also offers:
- Coverdell Education Savings Certificates
- IRA Certificates and IRA Premier accounts
- Credit cards
- Mortgage and home equity loans
- Auto loans
- Personal loans
- Student loans and student loan refinancing
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Here’s a breakdown of some of the fees associated with PenFed’s accounts:
PenFed Checking Account Fees
Access America Checking:
- Monthly service charge: $10 (waivable with a direct deposit of at least $500 per month or maintaining a daily balance of at least $500).
- Nonsufficient funds fee: $30.
- International transaction fee: Up to 2% of the transaction amount.
- Returned deposited check fee: $5.
- Monthly service charge: $0.
- Nonsufficient funds fee: $30.
- International transaction fee: Up to 2% of the transaction amount.
- Returned deposited check fee: $5.
PenFed Savings Account Fees
Both the Regular Savings and Premium Online Savings accounts require a $5 initial deposit, with no maintenance or monthly fees. For the Regular Savings account, which comes with an ATM card, there’s a $1.50 fee for withdrawals and a $1.00 fee for balance inquiries at non-PenFed branded ATMs.
PenFed ATM Fees
PenFed typically charges $1.50 for withdrawals and $1 for balance inquiries at non-PenFed branded ATMs. However, these fees are waived for Free Checking and Access America Checking account holders.
PenFed’s Safety and Security
PenFed Credit Union is a secure financial institution. As a federally insured credit union, it falls under the protection of the National Credit Union Administration (NCUA), which offers deposit insurance similar to the FDIC, safeguarding deposits up to $250,000 per depositor in each ownership category in case of a credit union failure. Members can trust that their funds are in safe hands.
Eligibility and Accessibility
PenFed stands out as one of the most inclusive credit unions in the market. Unlike many financial institutions, PenFed’s membership is open to virtually everyone. Whether you’re a military service member, a government employee, or an everyday citizen, you can become a PenFed member with ease.
PenFed’s member services are readily available to assist you. You can reach out through various channels:
- Phone: Contact them at 724-473-6333 or use the toll-free number 1-800-247-5626 during their business hours, ensuring you get the support you need.
- Online Messaging: Send secure messages, including document uploads if necessary, through PenFed’s website for quick and secure assistance.
- Email: For general inquiries, you can email them at firstname.lastname@example.org.
- Mailing Address: If you prefer traditional correspondence, you can send mail to PenFed at Box 1432, Alexandria, VA 22313-2032.
PenFed’s Reputation: Banking Experience
PenFed has earned a solid reputation over the years, providing a reliable and efficient banking experience to millions of members worldwide. The credit union’s commitment to competitive rates and accessible financial products makes it a compelling choice for both new and experienced savers.
PenFed’s Digital Experience
PenFed’s mobile app is highly rated and offers convenience, allowing members to manage their finances easily. Features include mobile check deposit, bill pay, fingerprint access, instant transfers, and an ATM locator. Furthermore, members have access to a vast network of 85,000+ fee-free ATMs through the Allpoint and CO-OP ATM network.
Comparing PenFed with Other Financial Institutions
PenFed vs. Navy Federal
Navy Federal Credit Union is exclusive to military personnel and Department of Defense employees. While it offers competitive savings rates, PenFed often outshines it with higher APYs. However, Navy Federal members must maintain a $2,500 minimum balance to earn money market account dividends.
PenFed vs. USAA
USAA Bank has stringent membership requirements. PenFed usually offers better savings account rates. PenFed also provides money market accounts, which USAA doesn’t offer. If you’re eligible for USAA membership and military discounts, it’s worth considering, but if you seek higher savings rates, PenFed might be a better choice.
PenFed vs. Ally
Ally Bank stands out with highly competitive APYs for savings accounts and money market accounts, with no minimum deposit requirements or monthly fees. PenFed offers physical branches, while Ally operates solely online. Depending on your preferences, you may choose one over the other.
To Recap: Is PenFed a Good Credit Union?
PenFed Credit Union is a reputable institution and one of the easiest credit unions to join, offering a wide range of products and services with competitive interest rates. It’s a strong choice for those seeking high-yield accounts with low fees and accessible minimum deposit requirements.
However, your choice of financial institution should align with your unique financial goals and preferences. PenFed’s commitment to serving a diverse membership base and its robust range of financial products make it a prominent player in the credit union sector. Whether you’re a military affiliate, a government employee, or an everyday consumer, PenFed’s offerings can provide you with the financial solutions you need.
How do I become a member of PenFed Credit Union?
- To become a member of PenFed, you can open and maintain a savings account, which is the primary membership requirement. However, PenFed’s open charter membership allows anyone in the U.S. to join, offering flexibility in membership eligibility.
What is the difference between PenFed’s Premium Online Savings and Regular Savings accounts?
- PenFed’s Premium Online Savings account offers a higher APY and no monthly service fees, making it a choice for those seeking better returns. On the other hand, the Regular Savings account offers a lower APY but allows in-branch openings and easy ATM access.
Can I access PenFed’s services if I’m not in the military or a government employee?
- Yes, PenFed’s open charter membership policy allows anyone in the United States to join, even if you’re not affiliated with the military or government. This inclusivity makes their services accessible to a broad audience.
What is the benefit of having a checking account with PenFed?
- PenFed offers checking accounts with features like fee-free access to a vast network of ATMs, competitive APYs, and daily compounded checking dividends, ensuring you maximize your returns while conveniently accessing your money.
Are there any fees associated with PenFed’s savings and checking accounts?
- PenFed generally offers fee-free accounts, but there may be fees associated with certain services or account types. For specific fee details, it’s best to refer to PenFed’s fee structure.
How does PenFed’s savings account membership requirement work?
- To become a member of PenFed, you’re required to open and maintain a savings account. This account serves as your entry point into the credit union and allows you to access their range of financial services.
Is PenFed a good choice for military personnel and veterans?
- PenFed has a strong reputation for serving members of the armed forces and their families. Its range of accounts and services, coupled with competitive rates, make it an attractive option for military personnel and veterans.
Can I access PenFed’s services online?
- Yes, PenFed offers a highly-rated mobile app that provides convenience for managing your finances. It includes features like mobile check deposit, bill pay, fingerprint access, instant transfers, and an ATM locator.
What makes PenFed stand out compared to other financial institutions?
- PenFed differentiates itself with competitive APYs, an extensive network of fee-free ATMs, and a commitment to serving military personnel and government employees. Its open charter membership also allows a broader range of people to join.
How does PenFed compare to other credit unions like Navy Federal and USAA?
- PenFed often offers higher savings rates compared to Navy Federal and USAA. The choice between these credit unions depends on individual preferences, membership eligibility, and specific financial goals.
Are there any penalties for early withdrawals from PenFed’s Money Market Certificates?
- Yes, it’s important to be aware of potential penalties for early withdrawals from Money Market Certificates. These penalties can vary, and it’s advisable to check the terms and conditions associated with your specific account.
What should I consider when deciding between PenFed and other online banks like Ally?
- When choosing between PenFed and Ally, consider factors like APYs, the presence of physical branches, and whether you prefer an institution with no minimum deposit requirements or monthly fees.
How can I contact PenFed’s customer support?
- PenFed provides various contact options, including phone, email, and physical branches. You can visit their official website for specific contact details and support options.
Does PenFed offer specialized financial products for education, such as Coverdell Education Savings Certificates?
- Yes, PenFed offers Coverdell Education Savings Certificates, which can be an excellent choice for those looking to save for educational expenses.
Are there any discounts or special offers for military members and government employees at PenFed?
- PenFed may offer discounts or special offers for military members and government employees. It’s advisable to inquire with PenFed directly or check their website for any ongoing promotions or benefits.
If you have further questions or specific inquiries, it’s always a good idea to reach out to PenFed directly for personalized assistance.
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