PenFed Credit Union Premium Online Savings Account 2024 Review
PenFed Credit Union offers an online high-yield savings account that you can open with a minimum deposit of just $5. You don't need to be an existing PenFed Credit Union customer to open a savings account, though you will need to become a credit union member.
PenFed's Premium Online Savings account features a low opening deposit and a competitive APY. You can open an account online in minutes with as little as $5 to start earning interest.
Saving with PenFed Credit Union could be an excellent choice for people who:
- Are interested in exploring the benefits of saving with a credit union vs. a bank
- Would like to get an above-average APY on savings balances
- Want to avoid a monthly maintenance fee with a savings account
- Prefer the convenience of branch banking access
To open this savings account you'll first need to become a PenFed Credit Union member. Unlike other credit unions that may limit membership to people working in certain professions or living in specific areas, PenFed membership is open to everyone. You'll need the minimum opening deposit and some basic information to get started.
PenFed Credit Union Premium Online Savings Account Pros & Cons
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Compared to Other Online Savings Accounts
Synchrony Bank High Yield Savings Account
Synchrony Bank offers high-yield savings accounts and CD accounts to savers who want to earn exceptional rates and don't mind banking online. There's no minimum deposit required to open a savings account with Synchrony and no monthly maintenance fees. You'll also find money market savings accounts offered here for even more variety in terms of where you keep your money.
Read our full Synchrony Bank High Yield Savings review
Navy Federal Credit Union Savings Account
Navy Federal Credit Union has multiple savings account options, though none quite match what PenFed offers when it comes to savings rates. You'll need to join the credit union to open an account and membership is extended to military members and their families. The minimum opening deposit to set up a membership account is $5.
Read our full Navy Federal Credit Union savings account review
Blue Federal Credit Union Money Market Account
Blue Federal Credit Union offers a money market account in partnership with Raisin that boasts an impressive APY. You'll need to open the account through Raisin to take advantage of the higher rate but the minimum deposit is just $1, and there are no fees of any kind. The APY is one of the best among online savings accounts offered at a bank or credit union.
Read our full Blue Federal Credit Union Money Market review.
Alliant Credit Union High-Rate Savings Account
Alliant Credit Union's high-rate savings account is most similar to PenFed's premium online savings account when comparing the APY. This account has a higher minimum deposit of $100 but there's no monthly fee and you have the option to access your savings at thousands of fee-free ATMs. Alliant offers multiple ways to qualify for membership based on employment, geographic area or contributions to the Alliant Credit Union Foundation.
Read our full Alliant Credit Union High-Rate Savings review
Interest Rates
Credit unions may offer higher rates to savers versus traditional banks. But how do they compare to the best high-yield savings accounts from online banks?
PenFed stands out for its competitive rate, though it's important to note that it's not the best rate you could get with a savings account. If you already have accounts with PenFed, however, it's still worth a look if you'd like to keep all of your money in the same place.
Remember that if you're choosing an online savings account to get a better rate, there may be some downsides. For example, you may not have branch or ATM access, which could make it difficult to deposit or withdraw cash.
Here are a few tips to remember when comparing rates.
- Check the rate structure. Some banks apply the same APY across all balances, while others tier them. So it's important to know what rate you'll earn on the amounts you save.
- Look for rate caps. Though less common, some banks cap your APY once your balance reaches a certain limit. For example, you might earn 5.00% but only on the first $1,000 or $5,000 you save.
- Size up CD and money market rates. CDs require you to be more certain of when you'll need your savings, since you may be penalized for withdrawing money early. But they could offer even better rates than savings accounts. Money market accounts, meanwhile, can allow for more flexible access to your money if your account includes a debit/ATM card or check-writing.
Comparing savings account rates from at least three banks or credit unions can give you an idea of what's available when looking for the best place to save.
Fees
Credit unions can charge fewer fees than traditional banks, but that doesn't mean they're fee-free. PenFed doesn't charge any monthly fees for premium savings accounts, but there are some other fees to be aware of.
Other Service Fees - ConnectOne Bank Connection Plus Savings Account
| Type | Fee |
|---|---|
| Monthly maintenance fee | $0 |
| Dormant account fee | $5 |
| Returned item fee | $15 |
| Stop payment | $25 |
| Outgoing domestic wire transfer | $25 |
| Outgoing international wire transfer | $40 |
| Research fee | $25/hour |
Depending on how you use your savings account, you may not encounter any of these fees. But it's still a good idea to know what they are in case you get hit with a surprise charge.
ATM Access
PenFed does have ATMs but you won't be able to access your savings account at any of them. This account doesn't come with an ATM card or debit card.
If you're looking for a savings account that permits ATM withdrawals, there are some out there. When comparing them, it helps to consider:
- How many ATM locations you'll have access to
- What fees you'll pay to use your bank's ATM vs. another bank's ATM
- Whether your bank refunds any foreign ATM fees
Some banks offer unlimited ATM fee refunds, while others cap them at a certain dollar amount. And some don't refund any ATM fees at all.
That's important to keep in mind if you regularly withdraw cash, or would like to be able to in an emergency.
Account Management
PenFed offers online and mobile banking access to your savings account. If you have questions or need help, you can also visit a PenFed branch near you.
The mobile banking app has all the features you'd expect. You can use it to:
- Check balances
- Transfer funds between PenFed accounts
- View statements
- Link external bank accounts to schedule transfers
Customer service is available by phone and a chat option if you have questions. PenFed has approximately 50 branch locations.
FDIC Insurance
FDIC insurance is designed to protect deposit accounts in the rare event that a bank fails. The current FDIC protection limit is $250,000 per depositor, per account ownership type, per financial institution.
Credit unions are not covered by FDIC insurance. That doesn't mean, however, that your money is unprotected.
Like other credit unions, PenFed is insured through the National Credit Union Administration (NCUA). The NCUA insures credit union deposits up to $250,000.
What to Look for in a Savings Account
Savings accounts aren't all alike and it's to your advantage to shop around. Whether you decide to go with a credit union or a bank, you want to find an account that fits your needs.
Here are some things to consider as you weigh different savings accounts.
- Interest rate and APY
- Minimum opening deposit requirements
- Minimum balance requirements to earn interest or avoid a fee
- Monthly service fees, if any
- Other fees, such as excess withdrawal fees or wire transfer fees
- Online and mobile banking features
- ATM or debit card access
- Branch banking access
- Savings features and money management tools
- Deposit and withdrawal limits
- Overdraft protection
- Customer service and reputation
- Overall user experience
You can first compare savings accounts at online banks, and then expand your search to traditional banks. And if you're looking at credit union options, remember to check the membership requirements.
Frequently Asked Questions
What's the difference between PenFed regular savings and premium savings?
PenFed's regular savings account option earns a much lower APY than the premium savings account. However, the regular savings account includes ATM access at more than 43,000 fee-free locations. You won't be able to visit the ATM to withdraw cash from the premium savings account.
Does PenFed offer CDs?
PenFed offers certificate savings accounts, which are the credit union equivalent of CDs. There are money market certificates, IRA certificates, and Coverdell ESA certificates to help you fund different goals. All three options earn competitive rates.
Can anyone join PenFed Credit Union?
Anyone can join PenFed Credit Union because the membership requirements make it easy to open an account. You'll need to be at least 18 to join and have a $5 minimum opening deposit to open a share savings account.
