Saturday, 23 January 2021

PenFed Credit Union CD Rates, Checking, Savings, Money Market, and IRA Accounts

PenFed Credit Union CD Rates, Checking, Savings, Money Market, and IRA Accounts
29 Jan
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How PenFed’s Money Market Certificates compare

PenFed offers very competitive rates on its Money Market Certificates. Each certificate carries a higher-than-average interest rate compared to those listed in our roundup of the best available CDs. These high rates, combined with flexibility on how you earn dividend payments and how the money market certificate is renewed, make this a great choice for people looking for a well-rounded CD option from a credit union.

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How PenFed’s Access America Checking account compares

PenFed’s Access America Checking account offers a low annual percentage yield (APY) compared to our roundup of the best online checking accounts. In addition, the credit union charges its own fees on out-of-network ATMs and offers no refunds for third-party ATM fees.

There are plenty of other checking account options that charge no monthly fees and also reimburse third-party ATM fees. Unlike other checking accounts that charge a flat rate for any overdrafts, PenFed’s optional line of credit accrues its own interest. The APR for its overdraft line of credit is exorbitant, even when compared against credit cards — let alone other banks.

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How PenFed’s Money Market Savings account compares

The APY on PenFed’s money market account is very low compared to the rates on our listing of the best accounts. In fact, you can earn higher interest rates by keeping your money in PenFed’s checking account.

Furthermore, we find it odd that the credit union charges you to make an ATM withdrawal from this account — even from its own ATMs. At least PenFed offers free checks, but that won’t help you if you need quick cash.

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How PenFed’s Savings account compares

The interest rate this savings account is extremely low. You likely won’t earn much, especially when compared with other online high-interest savings accounts listed on our site.

Furthermore, we don’t like the fact that you need to pay to use an ATM with this account, even for in-network PenFed ATMs. Most banks at least let you use their own in-network ATMs for free, so the fact that you need to pay to do so with this account puts it at an even further disadvantage.

However, even though all members are required to open this account when establishing their membership with PenFed, it doesn’t mean you have to use it. It’s perfectly fine to let it sit idle with the $5 minimum deposit since there are no monthly account maintenance fees. It’s probably best to view this account just as the minimum requirement for PenFed credit union membership.

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How PenFed’s Premium Online Savings Account compares

The interest rate on PenFed’s Premium Online savings account is refreshingly competitive. You do sacrifice accessibility in terms of of visiting a branch or using ATMs, so this account might not be best for those who need cash quickly.

That being said, if you are looking for somewhere to park your money for a while and let it accrue interest, this could be a good account for you.

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How PenFed’s IRA CDs compare

While PenFed doesn’t offer the highest interest rates on its IRA certificates, the credit union is industry-competitive. If you’re looking to get as high in returns as possible, it’s tough to go wrong with PenFed, but you may earn more with other IRA CDs listed on our site.

What stands out the most with PenFed’s IRA certificates is that people who are over age 59½ can make partial withdrawals from these certificates without paying any early withdrawal penalties (assuming they keep at least a $1,000 balance in the certificate to keep it open). This unique feature is why PenFed’s IRA certificates can be a good choice for older adults looking to retain access to their capital throughout the term of an investment.

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How PenFed’s IRA Premium account compares

At the time of writing this article, it is hard to see any benefit to this account. The high minimum balance and paltry APY make little sense when compared to some of PenFed’s other products.

Typically, the more money you bring to the table, the higher the interest rate you can earn (as with PenFed’s Money Market Savings account), but that is not the case with this account. That could change in the future, however, if the credit union decides to increase its interest rates for this account.

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