At a Glance
Rating Breakdown
About PenFed Credit Union
PenFed and Navy Federal are frequently compared as military credit unions, but as of 2023 that comparison is misleading. PenFed opened membership to everyone; you no longer need any military connection whatsoever. Anyone can join by making a one-time $5 donation to the National Military Family Association during the application process. This makes PenFed functionally an online bank that happens to be structured as a credit union, which has a specific financial implication: credit unions are exempt from federal corporate income tax. That tax advantage flows directly into member rates, which is why PenFed can offer CD rates that compete with or beat the best online banks and auto loan rates that undercut nearly every commercial lender. The practical difference between PenFed and Navy Federal comes down to priorities. Navy Federal's primary advantage is its lending rates and member service, supported by 350+ branches. PenFed's primary advantage is its deposit rates (especially CDs and money market certificates) and its auto buying program, supported by only about 50 branches concentrated near military installations. If you need a full-service banking relationship with branch access, Navy Federal is stronger. If you want the best possible CD rates from a credit union with the structural tax advantage baked in, PenFed is the better choice. And unlike Navy Federal, anyone can walk through the door.
Key Features
Open Membership for Everyone
The $5 National Military Family Association donation during application is the only requirement. No military service, no federal employment, no family connections needed. PenFed processes this automatically so the joining experience is identical to opening an account at any online bank.
Top-Tier CD and Certificate Rates
PenFed Money Market Certificates (their CD equivalent) frequently offer the highest rates among all credit unions and compete directly with the best online bank CDs. The 5-year certificate is often the single highest rate available at any institution for that term length. The credit union tax advantage is the structural reason they can sustain this.
Auto Buying Program via TrueCar
PenFed's TrueCar integration provides pre-negotiated vehicle pricing that saves $1,000-$3,000 off MSRP. Combined with PenFed's already-low auto loan rates, this creates a compound savings that makes PenFed one of the best end-to-end auto purchase paths available. Most members never bother using this, which is a mistake.
VA Loan Leadership
PenFed is one of the top 5 VA loan originators in the country by volume. Their VA rates are consistently among the lowest available, with minimal lender fees. For eligible veterans, PenFed should be on every VA mortgage rate comparison shortlist alongside Navy Federal and USAA.
How It Works
Join with a $5 Donation
During the online application, PenFed will prompt you to make a $5 donation to the National Military Family Association. This establishes your credit union membership. No further eligibility documentation is needed.
Open a Savings Account
Deposit $5 into a Regular Savings account to establish your membership share. This $5 remains as your ownership stake in the credit union and earns dividends.
Compare Certificate Terms
Review PenFed's Money Market Certificate rates across terms from 6 months to 7 years. Their 5-year certificate is often the single best rate available for that duration.
Explore the Auto Buying Program
If you are purchasing a vehicle, use PenFed's TrueCar integration before visiting a dealership. Get a pre-negotiated price online, then apply for PenFed auto financing to stack savings on both purchase price and interest rate.
What They Do
- Checking Accounts
- Savings Accounts
- Money Market Certificates
- Credit Cards
- Auto Loans
- VA Mortgages
- Personal Loans
- Home Equity
Debt Types They Take On
- Access America Checking
- Premium Online Savings
- Money Market Certificates
- Money Market Savings
- Regular Savings
- IRA Certificates
Fee & Cost Structure
Regulatory & Trust
Review Summary
Notable Case Studies
Stacked Auto Purchase Savings
Member used PenFed's TrueCar program to negotiate $2,400 off MSRP on a $38,000 vehicle, then financed through PenFed at 4.49% APR for 60 months versus the dealer's 6.99% offer.
5-Year Certificate Rate Comparison
Saver compared 5-year CD/certificate rates across 8 institutions including Ally, Marcus, Synchrony, CIT Bank, and Navy Federal. PenFed's 5-year Money Market Certificate offered the highest rate.
Pros & Cons
Pros
- Open to everyone with a simple $5 donation, no military requirement
- Money Market Certificate rates frequently the highest available for long-term CDs
- TrueCar auto buying program saves $1,000-$3,000 off vehicle MSRP
- Credit union tax exemption structurally supports above-market member rates
Cons
- Checking account (Access America) earns no dividends and offers no competitive advantage
- Only about 50 branches, almost all near military installations
- Digital experience and mobile app lag behind Ally, Capital One, and other digital-first competitors
User Reviews
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Frequently Asked Questions
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Important Banking Disclaimers
- Annual Percentage Yields (APYs) shown are accurate as of the date of publication and are subject to change without notice. APYs may vary by region and account tier. Contact the bank directly for the most current rates.
- FDIC insurance covers deposits up to $250,000 per depositor, per insured bank, for each account ownership category. NCUA insurance provides similar coverage for credit union deposits. Coverage limits are set by federal law and are subject to change.
- Bank bonuses and promotional offers may require minimum deposits, direct deposit setup, or other qualifying activities. Bonuses may be considered taxable income. Consult a tax professional regarding potential tax obligations.
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