Is Pentagon Federal a Good Credit Union?

FT Contributor  | 

Pentagon Federal Credit Union, commonly referred to as PenFed, was established in 1935 in Washington, D.C. but is now based in Tysons, Virginia. The credit union offers a suite of financial services to over two million members throughout all 50 states who have or have had an affiliation with the U.S. military.

PenFed is a good option for military-affiliated members who prioritize competitive interest rates for checking, saving and money market certificates.

PenFed holds over $25 billion in assets but only has 46 branch locations in 13 states, including:

  • California.
  • Florida.
  • Georgia.
  • Hawaii.
  • Maryland.
  • North Carolina.
  • Nebraska.
  • New Jersey.
  • New Mexico.
  • New York.
  • Pennsylvania.
  • Texas.
  • Virginia.

You can also find PenFed branches in Washington D.C., Puerto Rico, Guam, and Okinawa. With limited credit union branches, PenFed specializes in online banking. Review information about PenFed credit union services to learn if it’s the right bank for you.

Who Is Eligible for Pentagon Federal Credit Union?

To become a PenFed credit union member, you must have some affiliation with the military or federal government. You may be retired military, active duty, or a member of a military-affiliated organization, such as the Air Force Association or Marine Corps League.

As a PenFed member, you have access to several benefits, including discounts with participating companies. For example, PenFed members receive free guaranteed asset protection (GAP) and mechanical breakdown coverage on auto insurance.

Credit union members also benefit from discounts on home warranties, car rentals, and car service through participating providers. They may qualify for homeowners and auto insurance discounts with affiliated insurance providers including Travelers and Trustage.

Pentagon Federal Credit Union Services

PenFed offers the usual banking resources to members, such as checking and money market accounts. The credit union is also known for additional financial services available to members.

Checking Accounts

PenFed members can open a checking account called the Access America Checking account. As long as the daily balance or monthly deposits total at least $500, there are no service fees and the account earns dividends. Checking account holders have access to mobile banking, ATMs throughout the country, and a debit card. Members can also apply to set up an overdraft protection line of credit that coincides with the account.

Savings Accounts

There are two different types of savings accounts at PenFed: one that caters to online bankers and a regular savings account. The online savings account option offers a high annual percentage yield (APY) rate at 1.05% but no access to in-person branch services. The regular savings account has a 0.05% APY rate but allows account holders to visit local branches and ATMs to complete transactions.

Money Market Accounts

The PenFed money market account includes no monthly fees and free checks upon request. Members who keep an account balance under $10,000 are eligible for a 0.05% APY while those with a balance between $10,000 and $99,999 receive a 0.10% APY. Members with a money market account balance higher than $100,000 earn a 0.15% APY.

Certificates of Deposit

PenFed offers a money market certificate of deposit (CD) with a term of six months to one year. Members can invest as little as $1,000 and benefit from a 0.95% APY when they choose a year term.

Members who are focused on saving money for education can open a Coverdell Education Savings Certificate and benefit from tax-free earnings. This CD account offers a one to seven year term with a 0.90% APY for a three-year term.

IRA Certificates

PenFed Credit Union rolls the benefits of an individual retirement account (IRA) and CD into one with an IRA certificate. With a $1,000 minimum balance required to open, members can choose a one to seven year certificate term. The account pays dividends like a CD but offers tax benefits like an IRA.

Pentagon Federal Credit Union Customer Service

You can contact the PenFed Credit Union customer service department by phone, email, or by visiting a local branch. The customer service department is available Monday through Friday from 7 a.m. to 11 p.m. Eastern Time, Saturday from 8 a.m. to 11 p.m., and Sunday from 9 a.m. to 5:30 p.m. The company also allows members to securely upload documents online if sensitive information is needed to open an account or verify identity.

Pentagon Federal Credit Union Contact Information

Contact the customer service department by calling 724-473-6333 or 1-800-247-5626 during operating hours. You can also email the department at info@HQ.PenFed.org. Securely send documents to PenFed Credit Union by providing your information and uploading documents through the secure document portal.

Pros and Cons of Pentagon Federal Credit Union

PenFed credit union members have reported both advantages and disadvantages to the services the financial institution offers.

Benefits

While there aren’t many credit union branches, PenFed does have an extensive ATM network. Members have access to over 68,000 ATM machines. The credit union also offers an interest-earning checking account, which is a rare opportunity for your checking account money to grow over time. PenFed Credit Union members also benefit from online banking and a robust mobile app that’s easy to use.

If you qualify to bank with PenFed Credit Union, it’s important to review the characteristics of the accounts you may need to open to see if they’re right for you. Compare the features of the credit union with other banks before deciding whether to become a member.

Drawbacks

To become a PenFed member, you must have or have had an affiliation with the military so some interested consumers may not qualify to open an account. PenFed Credit Union only offers a small network of 46 branches, meaning in-person customer service may not be an option unless you live close to a branch.

To earn the highest APY on your savings account, you must have a high balance. While the PenFed CD is an easy way to make your savings work for you, you’re responsible for hefty early withdrawal penalties if you need access to your money before the term is over.


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