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Is PenFed Better Than Other Credit Unions?

Photo Courtesy: @PenFedTwitter

PenFed Credit Union was first established in 1935, and is is one of the United States' largest credit unions. However, its membership is limited to those who are government employees in the military or related to those who are in the government,military, or who volunteer in such capacities.

But PenFed isn't so restrictive in its membership.thers are allowed to join. If you make a donation to a partner charity, you are able to become a member. Read on to learn more about what PenFed offers, and how it rates as a credit union.

How Are Credit Unions Different Than Banks?

First, it's important to understand the difference between credit unions and banks. A bank is simply a place where you have your money in a savings or checking account (the simplest options). You may do other business at a bank, such as take out a loan for a mortgage, or put money into a CD or other savings account.

Photo Courtesy: @Nationals/Twitter

But, when you join a credit union, you become a member. At a credit union like PenFed, this allows you to have a "share account," which means that you are also now a shareholder—albeit a very small one—in the company. This means you do get a say in how things are run. You may also get other perks depending on the credit union. For example, PenFed members could get special seating at a Washington Nationals game, along with other local discounts.

How PenFed Rates

PenFed received an overall 4.0 (out of 5.0) score from the website Nerdwallet. This is an overall score based on all of their offerings, such as checking, savings, and share certificates. Nerdwallet was quick to point out that the pros included that checking accounts accrue interest, which is not commonplace, and that members have access to nearly 70,000 ATMs across the country.

Photo Courtesy: @PenFed/Twitter

There's also a good APYT (annual percentage yield) on online savings accounts. However, there was a low APY on the basic savings accounts, a high $1,000 minimum on share certificates, and PenFed does not participate in shared branching, which means you cannot withdraw funds or perform other transactions at other credit unions. This is a feature that many credit unions offer.

Bankrate also rated PenFed on its services, giving it an overall score of 3.6 out of 5.0. One pro that Bankrate pointed out was the ability to perform many banking functions at the same institution. For example, PenFed offers everything from bank accounts to mortgages to home loans, so they can truly be your one stop shop for banking. However, there are not many branches around the United States; so, if you like to do a lot of local banking, and you're not local to the DC/MD/VA metro area, you may want to look elsewhere.

How Does PenFed Compare to Other Credit Unions?

When comparing PenFed to other credit unions, PenFed got extremely high marks for their mortgage interest rates. However, reviewers gave Navy Federal Credit Union top marks for being the best credit union for those affiliated with the military or employed by the government.

Photo Courtesy: @PenFed/Twitter

Reviewers did praise PenFed for its competitive checking and savings options, and noted its various credit card options were well worth looking into. It is also important to note that there are many nationwide ATMs, but not many local branches outside of the DC metro area. With competitive checking and savings options, credit cards, and loans, PenFed is a viable and good credit union option for many, both for those in the military and those not.

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