Table Of Content
Two credit unions that offer competitive Certificate rates are Navy Federal Credit Union and Pentagon Federal Credit Union (PenFed). Whether you’re a current member of one of these credit unions or looking to join, understanding the details of their CD offerings can help you maximize your savings.
In this article, we’ll compare the CD rates, terms, and early withdrawal fees of these two credit unions to help you make an informed decision.
Here’s a general CD comparison:
Navy Federal CDs | PenFed CDs | |
|---|---|---|
CD Range | 1.50% – 4.15%
| 2.00% – 4.35% |
Minimum Deposit | $1,000 | $1,000 |
Early Withdrawal penalty | 90 – 365 days of dividends | 90 – 365 days |
Terms | 3 months – 7 years | 6 – 84 months
|
Navy Federal vs. PenFed CD Rates
The table compares the CD rates offered by Navy Federal Credit Union and Pentagon Federal Credit Union (PenFed) for specific terms.
The data shows that for the 3-month CD term, Navy Federal has a higher APY range than PenFed, while PenFed offers the highest APY for the 6-month term.
For the rest of the terms, there is no significant drawbacks between them.
CD Term | Navy Federal APY | PenFed APY |
|---|---|---|
3 Months | 1.45% – 1.50%
| N/A |
6 Months | N/A | 2.80% |
12 Months | 3.85% – 3.90%
| 3.20% |
18 Months | 3.75% – 3.80%
| 3.20% |
24 Months | 3.55% – 3.60%
| 3.10% |
36 Months | 3.70% – 3.75% | 3.10% |
48 Months | N/A | 3.10% |
60 Months | 3.50% – 3.55% | 3.10% |
84 Months | 3.50% – 3.55% | 3.00% |
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Which Is Better If You Need An Early Withdrawal?
An early withdrawal penalty is a fee imposed by financial institutions when an account holder withdraws funds from a certificate of deposit (CD) account before the maturity date.
If you need to withdraw your CD before maturity, PenFed is a better place to do it – as you can see in the table below, the dividends you’ll need to pay are lower compared to Navy Federal.
CD Term | Navy Federal | PenFed |
|---|---|---|
3 Months | Dividends for 90 days
| N/A
|
6 Months | Dividends for 90 days
| Dividends for 90 days |
12 Months | Dividends for 90 days
| 365 days / 30% of dividends |
18 Months | Dividends for 180 days
| 365 days / 30% of dividends |
24 Months | Dividends for 180 days
| 365 days / 30% of dividends |
36 Months | Dividends for 180 days
| 365 days / 30% of dividends |
48 Months | N/A | 365 days / 30% of dividends |
60 Months | Dividends for 365 days
| 365 days / 30% of dividends |
84 Months | Dividends for 365 days
| 365 days / 30% of dividends |
Do Navy Federal And PenFed Offer Alternatives to CDs?
Choosing a savings account as an alternative a CD may be suitable for those who value liquidity and flexibility more than higher interest rates. Despite having lower interest rates, savings accounts allow for easy access to funds without the risk of early withdrawal penalties.
PenFED Savings | Navy Federal Savings | |
|---|---|---|
Savings Rate | 2.80% | 0.25% |
Minimum Deposit | $5 | $5 |
Fees | $0 | $3 per quarter (waived if your balance over $50) |
Promotion | None | None |
PenFED offers two savings accounts, Regular and Premium, both with no minimum balance requirements to earn the APY. The Premium Online Savings account offers a competitive rate of 2.80% APY and no monthly fees, and both accounts offer free bill pay services. The Regular savings account provides ATM access but with fees, while Premium Online Savings does not have an ATM card.
On the other hand, Navu federal savings is not a real alternative to its CDs due to the significant difference between the rates and the low APY it offers.
The Smart Investor CDs Comparison Methodology
In our comprehensive certificate of deposit (CD) comparison, The Smart Investor team meticulously evaluated various CDs across four key categories to assist you in selecting the most suitable option for your savings goals.
- CD Rates: We thoroughly examined the interest rates offered by each CD, considering their competitiveness in the market. Higher rates typically translate to greater returns on your investment over the CD’s term. Additionally, we scrutinized any special promotional rates or conditions that might affect the overall value of the CD.
- CD Features: This category focuses on the unique features and terms associated with each CD. We assessed factors such as minimum deposit requirements, early withdrawal penalties, and the availability of flexible terms. Additionally, we considered any additional perks like interest compounding frequency or options for automatic renewal.
- Customer Experience: A positive customer experience is crucial in banking, and we evaluated each institution’s performance in this regard. We looked into aspects such as the ease of opening a CD, the quality of customer service, and the availability of support channels. Reviews from reputable sources such as Trustpilot and JD Power rankings were also considered to gauge overall user satisfaction.
- Bank Reputation: The reputation of the bank is a significant factor in the decision-making process. We examined the bank’s financial stability, regulatory compliance, and public perception to assess its overall trustworthiness and reliability as a CD provider.
