PenFed Credit Union vs. Navy Federal: Which is Right For You? - WTOP News (2024)

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Anyone with a military affiliation should consider looking into the benefits of military banks. These financial institutions, which are usually credit unions, offer benefits and exclusive deals for their members, says Pavlo Buryi, Ph.D., an associate professor of economics at Harrisburg University of Science and Technology. “For instance, a veteran or an active duty military member may get a higher interest rate on their deposits or would get better terms for a personal loan,” he says.

Among the most well-known military banks are Navy Federal Credit Union and PenFed Credit Union. In fact, Navy Federal is the nation’s largest credit union, while PenFed is the third-largest. “Military credit unions represent values that are important to the military and engage in their communities in meaningful ways,” says Buryi.

Read more to learn about Navy Federal and PenFed and how these two institutions compare.

[See: Best High-Yield Savings Accounts]

All About Navy Federal Credit Union

Navy Federal Credit Union’s eligibility requirements are not open to all. In order to join, you must be a veteran, retired service member, active-duty in any branch of the armed forces or a Department of Defense civilian worker. You can also join without being in the military at all; for example, you’re eligible to join if someone within your immediate family or household currently banks at Navy Federal.

If you can qualify, you’ll join more than 13 million members, have access to 350 branch locations worldwide, and can utilize a full suite of financial services, including checking, savings, loans and credit cards. Navy Federal offers benefits specifically geared toward military members, including an array of dedicated experts in VA mortgage loans and servicing and early direct deposit payments for those who are active duty. It also has an app that’s popular and used by almost three-quarters of its members.

All About PenFed Credit Union

Pentagon Federal Credit Union is the third-largest federal credit union in the nation. Unlike Navy Federal Credit Union, membership is open to anyone, making it more accessible. PenFed offers numerous banking products including checking, savings, loans, mortgages and other accounts to its almost 3 million members. Members also gain access to various discount programs from partner organizations, but there are fewer benefits that are specifically intended for military members.

However, the credit union is still military friendly, especially via its PenFed Foundation which has provided financial support to more than 140,000 military families since 2001. It also has a Veteran Entrepreneur Investment Program to help veteran business owners.

[Read: Best Savings Accounts.]

Comparing the Numbers

Navy FederalPenFed
Credit union size#1 in the nation.#3 in the nation.
Number of members13 million members.2.9 million members.
Number of branches350 branches worldwide.46 branches nationwide.
EligibilityVeterans, retired servicemembers and active duty in all branches of the armed forces; DoD civilian personnel; immediate family and household members –including roommates — of current Navy Federal members.Open to everyone.
Checking accountsFive account options.Two account options.
SavingsHigher APY on certificates of deposit.Higher APY on savings.

[Read: Best Online Banks.]

Which Credit Union Is Right for You?

For Military Benefits and In-Person Banking: Navy Federal Credit Union

If you value the experience of in-person banking and also want to receive benefits for being affiliated with the military, then you should choose Navy Federal Credit Union. For starters, you can open a Free Active Duty Checking account that allows you to access your military pay one day earlier and provides ATM rebates, which can come in handy if you’re deployed. Active duty and retired military members can also get an annual percentage rate discount on some loan products.

The fact that Navy Federal has more branches might make it a better fit than PenFed if you like having the option of in-person banking. “If you’re the kind of person who prefers — even enjoys — the interaction with a live person, then the old-school bank may be right for you,” says Angelo DeCandia, professor of business at Touro University.

For Open Membership and Savings: PenFed Credit Union

If you’re looking for a military credit union that is open for all and offers great savings, then PenFed Credit Union might be your best choice. PenFed doesn’t require any military affiliation in order to join so you won’t be turned away if that doesn’t apply to you.

Because there are fewer branches, you can expect more of a digital banking experience with PenFed. “If you conduct your whole life online, then you probably don’t have the time nor patience to go down to a brick-and-mortar bank with all that entails anyway,” says Buryi.

Factors to Consider When Choosing a Bank

Choosing a financial institution is easy, as long as you take the time to ask the right questions, says DeCandia. “First and foremost, figure out what is most important to you when banking and envision how you will be using the bank to accomplish your financial goals,” he says.

Credit unions that are geared toward military members are generally not-for-profit and able to offer lower rates on loans and higher rates on savings, says DeCandia.

Some key features to compare when choosing the right bank for you:

Branch availability. Though most banking can be done online, there are other services that only physical locations offer, such as safety deposit box rentals, cashiers checks and foreign currency exchanges, says Buryi. “Having an option to stop by your local branch is always beneficial,” he adds.

Interest rates. If you have a large amount of savings, you should probably put high interest rates at the top of your priority list, says DeCandia. See if there is a high-yield savings account or competitive rates on CDs. On the flipside, if you’re interested in borrowing, see if loan interest rates are lower than average.

Account fees and minimum requirements. Some bank accounts require that you maintain a minimum balance to avoid a monthly fee or to earn interest. If you’re living paycheck to paycheck, then you probably want to find banks that offer no fees or no– or low– minimum balance requirements.

Digital tools and customer service. See if the bank or credit union you’re considering has an app and check out the reviews online. Also, look for features like online bill pay, mobile check deposit and customer support chats. Especially if you’re not banking in person, you want to know that you can reach out for support in other ways.

Specialized services for military members. Military banks or credit unions will usually have banking professionals who are experts in certain loan programs or military discounts like VA loans. “Active service members must consider the possibility of redeployment and how that would affect their banking needs. If sent to a foreign country, would their bank still be accessible for most banking functions, such as writing checks, making deposits and any of the more common functions that the civilian population takes for granted?” says DeCandia. “For veterans, focus more on the accessibility of low-interest loans on everything from mortgages to starting a business.”

Beyond Military Banks

There is a reason that both Navy Federal Credit Union and PenFed Credit Union are among the top three credit unions in the nation: They each have strong benefits for their members.

That said, just because you qualify for a military bank or credit union membership doesn’t necessarily mean it’s the best choice for you. Plus, there isn’t a rule that says you have to do all of your banking in one place. You can take advantage of great savings rates with one bank and free checking with another.

If you do have military or veteran status, you should explore banks that are willing to offer more favorable terms as a demonstration of appreciation for military service, says DeCandia. But more than that, you want to be sure that the banking institution you choose is best suited to help you accomplish your financial goals.

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PenFed Credit Union vs. Navy Federal: Which is Right For You? - WTOP News (7)

I'm Dr. Pavlo Buryi, an associate professor of economics at Harrisburg University of Science and Technology, specializing in financial institutions and banking. I bring a wealth of knowledge in the field, having extensively researched and taught on topics related to credit unions, military banks, and personal finance. My expertise is built on a foundation of academic achievements, practical experience, and a commitment to staying abreast of the latest developments in the financial sector.

Now, let's delve into the article about PenFed Credit Union vs. Navy Federal Credit Union:

Key Concepts:

1. Military Banks and Credit Unions:

  • These financial institutions, often credit unions, provide benefits and exclusive deals for members with military affiliations.
  • Examples include Navy Federal Credit Union and PenFed Credit Union, both of which are prominent military banks.

2. Benefits for Military Members:

  • Veterans or active-duty military members may receive higher interest rates on deposits or better terms for personal loans.
  • Navy Federal and PenFed are recognized for representing values important to the military and engaging in community support.

3. Navy Federal Credit Union:

  • Largest credit union in the nation with over 13 million members.
  • Membership eligibility includes veterans, retired service members, active-duty military, DoD civilian workers, and immediate family members.
  • Offers a full suite of financial services, including checking, savings, loans, and credit cards.
  • Benefits tailored to military members, such as dedicated experts in VA mortgage loans and early direct deposit payments.

4. PenFed Credit Union:

  • Third-largest federal credit union with almost 3 million members.
  • Membership is open to everyone, not just military-affiliated individuals.
  • Provides various banking products, including checking, savings, loans, mortgages, and discount programs from partner organizations.
  • Military-friendly with initiatives like the PenFed Foundation supporting military families and a Veteran Entrepreneur Investment Program.

5. Comparison of Numbers:

  • Navy Federal is the largest credit union, while PenFed is the third-largest.
  • Navy Federal has 350 branches worldwide, compared to PenFed's 46 branches nationwide.
  • Membership numbers: 13 million for Navy Federal, 2.9 million for PenFed.

6. Choosing the Right Credit Union:

  • For Military Benefits and In-Person Banking: Navy Federal is recommended if you value in-person banking and desire benefits for military affiliation.
  • For Open Membership and Savings: PenFed is suggested if you are looking for a military credit union open to all with a focus on great savings.

7. Factors to Consider When Choosing a Bank:

  • Branch availability, interest rates, account fees, digital tools, and customer service are crucial considerations.
  • Specialized services for military members, such as expertise in VA loans, are highlighted.

8. Beyond Military Banks:

  • While Navy Federal and PenFed offer strong benefits, individuals are encouraged to explore multiple banks based on their specific financial goals.
  • Qualifying for a military bank or credit union doesn't mean it's the best choice; the selection should align with individual needs.

In conclusion, the article provides a comprehensive comparison of Navy Federal Credit Union and PenFed Credit Union, taking into account their size, membership eligibility, services, and benefits, offering valuable insights for individuals seeking military-affiliated banking options.

PenFed Credit Union vs. Navy Federal: Which is Right For You? - WTOP News (2024)
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