PenFed Credit Union Review

PenFed started as a credit union exclusive for the ones in the uniform. However, now they have opened their doors to anyone with an American address. With a presence in all 50 states, Pentagon Federal Credit Union is now the 2nd largest financial institute in America.

Their primary customers are members of the armed forces, veterans, and low-income Americans. Offering market-leading financial services, PenFed is at the forefront of the American finance and credit business. For that reason, we decided to bring the Pentagon Federal Credit Union under a detailed evaluation.

In the following lines, you will be reading a detailed PenFed | Pentagon Federal Credit Union review detailing the rates and services offered by the bank. So, let’s get started. 

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PenFed Credit Union Rate

The about us page on the PenFed website states; “Our mission isn’t simply to help our members get by. We exist to help them realize every ounce of their potential. We exist to educate but to also encourage.

We exist to usher their dreams into the land of reality.” But is it really the case? Or is it just another loan shark setting up the bait for vulnerable customers? We tested these claims, and as per our review and evaluation, PenFed got the following ratings:

  • Reputation: 4.6
  • Quality of services provided: 4.7
  • Speed of service: 3
  • Price of services: 4.9
  • Quality of mobile app: 4.6
  • Quality of service support: 4.9
  • Products: 4.7
  • Interest rates: 4
  • Profits: 4.5
  • Easy of use: 4

About PenFed Credit Union

Founded in 1935 as a Virginia-based military credit union, PenFed is now one of the most prestigious social-ecological banks in the world. With a balance sheet totaling 35 billion dollars in 2021 and over 2.5 million active customers, PenFed is the 2nd largest federal credit union in the USA. Owned and operated by Pentagon, PenFed offers market-leading personal loans, credit cards, deposit accounts, savings accounts, and other similar financial services.

The hurdle to being able to use the services provided by PenFed was that you must have served in any of the US uniformed services (army, navy, air force, etc.). However, that isn’t the case anymore, as any American can now join the institute and get their membership by opening up a deposit account for as low as $5. Read on the Pentagon Federal Credit Union 2022 review to learn more about the services offered by the financial institute and our overall ratings for the bank.

PenFed is an excellent option for anyone looking for a fully online banking option with lower minimum deposit requirements while still offering a high yield on savings and investments. Other than that, Pentagon Federal Credit Union would also be a perfect fit for anyone who is:

  • Serving or has served in military or law enforcement services.
  • Looking for a credit card without any fees or charges.
  • Looking to avail multiple options offered by a single bank.
  • Looking for a low monthly fee for the provided services.

Besides, Pentagon Credit Union is also a good option for Americans looking to get loans with minimum interest rates.

Pros of PenFed Credit Union

In our quest to rate Pentagon Federal Credit Union, we first of all paid attention to whether the union can prove itself in everyday life, especially with regard to small business and individual accounts. And here are the main advantages we found:

  • Online Checking Accounts: The bank offers fully-fledged online checking accounts for private use with monthly profits.
  • Worldwide ATM Access: You can get free cash at approx 85,000 ATMs spread across the world.
  • High Profits, Low Deposit: The union offers high-yield saving accounts with required deposits starting at as low as $5.
  • Easy to Join: The union is fairly easy to join and offers free membership for all American citizens.
  • Good For Savers: PenFed is a great option for customers looking to make their profits more profitable through saving accounts and market savings certificates offering up to 3% annual APY. 
  • Mobile Banking: You can take advantage of a highly efficient mobile banking network with the Pentagon Federal Credit Union app and mobile website, allowing you to access your accounts around the clock from anywhere in the world.
  • One Stop Shop for Financial Services: The bank offers multiple financial services (personal loans, credit cards, saving accounts, free checking accounts, auto loans, certificates, mortgages, and home equity) under one roof, including
  • Lower Interest Rates: The financial institute offers personal loans at comparatively lower interest rates.
  • Reliable Customer Service: In case of a financial emergency, you can get help from highly reliable customer services around the clock through multiple channels – phone, email, and 24/7 live chat.

Cons of PenFed Credit Union

Where there are pros, there will always be cons, and here are the ones we found about PenFed:

  • Penalties: The union tends to charge high fees or fines in case you are late on your paybacks or you decide to withdraw savings before maturity.
  • Lengthy Processes: Being a typical federal institution, even the simplest of processes (account verification) in PenFed can take weeks to complete.
  • Fewer Branches: The bank tends to operate online for the most part, which is an advantage. However, finding in-person assistance from the bank might be a bit hard as there are only a few PenFed branches outside Washington state.

What Does PenFed Credit Union Offer

A Pentagon Federal Credit Union membership will make you eligible to take advantage of multiple services offered by the bank, including:

  • Auto Loans;
  • Purchase Mortgages;
  • Checking Accounts;
  • Savings Account;
  • Money Market Certificates;
  • Personal Lines of Credit;
  • Credit Cards;

Other than that, the bank also offers its customers investment opportunities, individual retirement accounts, wealth management services, financial advisors, Brokerage services, student loans, IRAs, and insurance.

Auto Loans

PenFed Federal Credit Union offers a variety of loans for the purchase or repair of a vehicle, allowing customers to buy new and used vehicles worth up to $150,000 or 125% vehicle’s value. These include all post-purchase expenses such as tags and taxes. Three products are offered under PenFed auto loans – New Vehicles, Used Vehicles, and Auto Refinance.

The loan terms for 2022 range from 36 to 60 months. PenFed offers one of the lowest interest rates in the market, ranging between 5.24% and 7.04%, depending on the loan terms. Here is an example to ease out the loan terms and rates:

  • For a $20,000 new car loan with a 7.04% APR, the 84-month term would have monthly payments of around $300 per month, while the total loan cost would be about $25000.
  • Processed through an online application, PenFed auto loans are quick and easy, and you will be approved within a few minutes if everything checks out.

Purchase Mortgages

PenFed mortgage options include Power Buyer, VA Loans, Fixed Mortgage, Jumbo Loan, FHA Loan, VA Streamline, Home Equity Line of Credit (HELOC), Adjustable Rates Loans, and House Refinancing. Rates, terms, and limits for each of PenFed mortgage products can vary and are changed annually. The highest possible credit limit stays around $700,000, while the average APR ranges between 3% and 5%.

The PenFed mortgage is offered for a maximum term of 30 years, while the minimum credit terms are 15 months.  To get your pre-approval, you can fill out the online application and wait for the credit officer to contact you for the details. The highly trained professionals will lead you throughout the loan process, so there will be no confusion or hurdles.

Checking Accounts

Checking accounts are the most basic and free financial product offered by the credit union. These accounts allow you to manage our day-to-day expenses and income. Besides, these checking accounts can also help you save money and earn high-yielding profits. 

Accessible through online channels (app and website), this product is an account designed to facilitate your financial transactions. These checking accounts are an ideal option for basic banking needs: entering and withdrawing cash, direct debiting income, receiving a salary or pension and making online transfers, withdrawing money at ATMs, etc.

With PenFed Access America checking accounts, you can earn up to 11x of the national average on your balance with $500 of monthly deposit requirements.  Besides, you can also earn up to 0.35% APY on your daily checking account balance. You can apply for a PenFed checking account by filling up the online form and making a minimum deposit of $5. Alternatively, you can also visit a branch to get yourself a PenFed membership by opening a checking account.

Personal Loans

Personal loans are the most flexible, fast, and secure financing offered by PenFed. They represent an easy, direct and accessible solution for thousands of families, especially during unforeseen moments and in exciting projects, trips, studies, or business.  They are an all-in-one financing product, offering loans up to $50,000 for a maximum term of 60 months. The APR for such loans ranges between 7.74% and 11%, depending on the loan amount and terms.

PenFed personal loans take around 2 to 3 days to get approved. You can apply for approval by filling up the online application. If you already hold an account with PenFed, you can check out the pre-approved loans on your online dashboard.

Savings Accounts

If your goal is to save, and you want to do it your way, PenFed offers you an array of financial products under their saving accounts title, which includes: Premium Savings Account, Regular Saving Accounts, and Money Market Savings. These accounts generate high-yielding returns, with an APY going as high as 1.20%. 

PenFed savings accounts are a great way to make savings highly profitable as there are no monthly maintenance fees, commissions, or pre-maturity withdrawal fees. Besides using PenFed saving accounts, your money and profits are always open for withdrawals through online transfers and ATMs.

You can open a PenFed saving account by filling up an online application or by giving the PenFed a call. The minimum deposit for opening a PenFed account is $5 only. 

Money Market Certificates

PenFed Money Market Certificates are another great option if you want to save your money while getting huge profits on your savings. The PenFed money market certificates allow you to invest safely, with reasonable interest rates reaching as high as 3.25% and simultaneously obtain a fixed income from your money.

The minimum deposit to avail PenFed money market certificates is $1000, while there are no commissions or monthly maintenance fees of any type. However, there is a penalty on pre-maturity withdrawals, and the bank can keep up to 30% of your dividends. You can get your certificates for a maximum term of 84 months, with free renewals and withdrawals upon maturity. 

Personal Lines of Credits

PenFed personal line of credit is a financial product aimed at companies or individuals seeking long-term financing. The product works the same as credit cards, where you get a limited finance assistant and can use as much as you want to. You will only be obliged to pay back the amount you have used, and the interest would also be applied only to the used amount.

PenFed offers a personal line of credits on forms of checks. You can use these checks anywhere that accepts check payments. You can also deposit your lent funds into your account using the checks.

PenFed personal line of credits is offered for a maximum term of six months, while the credit limits can range between $1,000 and $100,000. The interest rates for PenFed PLOC can vary between 7.74% and 11.24% and is payable only on the amount you have borrowed. For example, if you are approved for $4,000, and you only use $1,000, then you will be paying interest only on the $1,000 you have used.

To get your PLOC approved by PenFed, you can apply online to secure a personal line of credits. You will then receive a limited number of checks you can use anywhere where check payments are accepted.

Credit Cards

Safe, flexible, and practical are the three words that perfectly define PenFed credit cards. Whether traveling abroad or buying in your neighborhood store, a PenFed credit card makes your day-to-day operations more accessible, thanks to various functionalities and benefits.

The bank offers multiple credit card products. These include Gold Visa Card, Power Cash Card, Platinum Card, and Pathfinder. All of the cards provided by PenFed come with a Visa signature. Therefore, they can be used in ATMs and stores throughout the world.

The annual APR for credit cards ranges between 11.49% and 17.99%. Besides, the credit limits can also vary depending on the type of PenFed card you have. PenFed credit cards come with a whole list of features and rewards, including paybacks, travel points, 0% APR on the first 15 months of usage, emergency card replacement, etc.

Whether You Should Apply For PenFed Membership?

PenFed is by far the best option if you are looking to avail multitudes of financial services from a single institution. With the market’s leading financial solutions, PenFed offers everything you can wish for with lower interest rates and higher profits. Other than that, according to our review team, you would have access to the following benefits using Pentagon Credit Union:

  • Lowest deposit checking accounts.
  • Higher APY on savings and investment certificates.
  • 24/7 access to your accounts and balance through online channels (website and app);
  • Lowest interest rates in the market;
  • Quick loan processing;
  • Higher financing limits;
  • Easy auto loans;
  • Low rate mortgage;
  • 0% maintenance fees on most of the account products;
  • Discounts on your first purchase through PenFed credit cards;
  • Bonus and rewards program;
  • 100% insured products;
  • Financial help;
  • Investment advice;
  • Reliable customer service.

Conclusion

Overall, PenFed is the perfect financial institution offering tens of products to make consumers’ lives easier with easy access to credit and financing. On paper, our team couldn’t identify a single drawback of the union, and everything seemed perfectly in place. 

Whether you are looking for a personal loan with a low credit score or looking to finance your dream car, PenFed will have you covered. Besides, personal credit options offered by the institute are market comparative and provide financial stability without costing half of your monthly earnings. Bank’s saving accounts and saving certificates offer higher returns as compared to any other financial institution in the country.

Methodology

With the growing usage of credit lines and bank financing, it is now crucial to pay more attention to the abuses many banks inflict on their clients, either due to ignorance or misleading publication.  This is why we pay special attention to the criteria by which we rate our banks, so we can see through the publicity stints and present our readers with absolute facts. Following are the factors that are of utmost importance for us as we rate a banking institute:

  • Asset quality;
  • Offered interest rates;
  • Hidden fees or requirements;
  • The gap between advertised and actual products;
  • Customer service; 
  • Usability and availability;
  • Access to information and transparency;
  • Customer Reviews. 

FAQ

What does FDIC mean?

FIDC stands for Federal Deposit Insurance Corporation. Created by Congress, FDIC is an independent federal institution that oversees the American financial system to maintain public trust and well-being.

Is PenFed Credit Union FDIC insured?

PenFed deposits and credits are insured by NCUA (National Credit Union Administration), which is equivalent to FDIC in functions and jurisdictions but deals with credit unions instead of banks.

Does PenFed Credit Union have branches nationwide?

Yes, PenFed does have its branches spread across the country. However, the number of branch branches might be limited if you are somewhere outside of Washington state.

How do I contact member services at PenFed Credit Union?

You can contact PenFed customer services through email, onsite live chat, or by giving them a call at +1-541-225-6700.

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