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The NFCU vs USAA vs PenFed Guide
As a member of all three of these financial institutions. I have been looking at them to compare and contrast the differences of each in hopes of getting the most benefit out of each. I believe that this post can help clarify some of the differences of all three which traditionally have been restricted to those with a military affiliation.
I plan on updating this post monthly as product and rates change. Please feel free to point out any errors, mistakes or improvements that can make this post help others in the future.
Updated 10-4-19
Navy Federal Credit Union (NFCU) is the largest credit union in the world. Since 1933, NFCU has grown from 7 members to over eight million members. Unlike the largest banks, NFCU offers competitive rates on checking and share certificates.
Eligibility for membership is limited to members of the military, veterans, individuals who have current ties to the armed forces, Department of Defense, or National Guard or have an immediate family member who has a membership with Navy Federal or is eligible to join.
Accounts and other products: Credit unions, even big ones, typically offer better rates than banks. NFCU’s rates include 3.50% returns on 12-month Special EasyStart Certificates and annual percentage yields of 0.35% or more on one of its interest checking accounts with a $1,500 average daily balance. It also offers low credit card and auto loan rates.
ATMs and branches: NFCU has a strong presence on and near military installations in the U.S. and abroad. The credit union also belongs to the Co-op network, giving members fee-free access to more than 30,000 ATMs throughout North America. When you use overseas Visa/PLUS ATMs, NFCU typically charges up to 1% and $1 per transaction.
Key Points
Credit Cards
Credit Union Experience
Overdraft Fees
Benefits
Credit Bureaus
Updated 10-3-19
United Services Automobile Association (USAA) is best known for its automobile insurance products. It was founded in 1922 by a group of 25 U.S. Army officers as a way to provide for mutual self-insurance for their automobiles. Today, USAA Bank offers it more than 12 million members a range of insurance, bank accounts, and investments.
Eligibility for membership is limited to individuals who are currently serving in the U.S.armed forces. Those who have retired or separated from the U.S. military with a discharge type of Honorable. Widows, widowers and un-remarried former spouses of USAA members who joined USAA prior to or during the marriage and individuals whose parents joined USAA. Cadets and midshipmen at U.S. service academies or affiliated academy preparatory schools, in advanced ROTC or on ROTC scholarship, plus officer candidates within 24 months of commissioning.
Accounts and other products: USAA is well known for its auto insurance, homeowners insurance, and renters insurance. USAA checking accounts have no monthly fees or minimum balance requirements. USAA also offers a range of products including savings accounts, credit cards, and auto loans. You also can use Apple Pay, deposit checks from your mobile device and access USAA’s online money-management tool.
ATMs: Members get free access to USAA Bank-owned ATMs as well as 10 free withdrawals each month at the bank’s wider network of 65,000 USAA-preferred ATMs in the U.S. In addition, some of USAA’s checking accounts reimburse you up to $15 per month in fees for out-of-network domestic ATMs.
Key Points
Savings
Certificates of Deposit
Bank Experience
Overdraft Fees
USAA Debt Forgiveness - Getting off the "Blacklist" thanks @vV35Hszm
Credit Bureaus
Updated 10-3-19
Pentagon Federal Credit Union, commonly referred to as PenFed, was established in 1935 and today is the nation’s second-largest federal credit union. PenFed is one of the country’s strongest and most stable financial institutions serving 1.7 million members worldwide with an impressive network of ATMs. It’s online savings also has a stellar rate.
Eligibility for membership has been traditionally limited to members of the U.S. military or uniformed services; employees of the U.S. government; individuals related to someone who meets the previous criteria; join the National Military Family Organization for $17. I have recently seen reports that PenFed now has open enrollment, no eligibility required as of May 2019. But PenFed requires a hard inquire of your credit report immediately when you open a checking or savings account.
Accounts: PenFed checking and savings accounts have consumer-friendly terms. The rate on its premium online savings account is a stellar 1.80% APY. Its checking account has an APY starting at 0.20% for balances below $20,000. The regular savings account earns only 0.05% APY but has a minimum deposit of just $5.
ATMs and branches: PenFed offers free access to over 68,000 ATMs through the Allpoint and Co-op networks, some of the largest fee-free ATM networks in the U.S. But to visit a branch, you need to be in the Washington, D.C., area or near select military bases in the U.S. and abroad.
Key Points
Member Experience
Overdraft Fees
Credit Bureaus
Best of the Best
NFCU vs USAA vs PenFed
September 2, 2019 | NFCU | USAA | PenFed |
Credit Report Inquiries for Membership | Soft Inquiry | ? Data Points Appreciated | Hard Inquiry |
No Fee Checking | Free EveryDay Checking | All Account Types | With daily balance or monthly direct deposit of $500 or more |
Free Checks | Yes - Free name only checks and free standard shipping | Yes - Free check designs come with free order tracking. | Yes - Free Box of Checks |
Interest Bearing Checking | Flagship Checking earns 0.35% to 0.45% APY | Classic Checking earns 0.01 % APY interest on balances of $1000 or more. | Checking earns 0.20% APY with daily balance or monthly DD of $500 or more |
Savings Interest Rate | Share Savings Account 0.25% APY | $10,000 earns 0.15% APY | Premium online savings account earns 1.80% APY |
No Fee Credit Card | Platinum Visa | None Available | PenFed Promise VISA |
Low APR Credit Card | Platinum Visa 8.24% - 18.00% Variable APR | Rate Advantage Visa 8.90% to 25.90% Variable APR | PenFed Gold VISA 9.24% to 17.99% Variable APR |
Sept 03, 2019 | NFCU | USAA | PenFed |
0% BT card | NFCU Platinum Visa - 0% introductory APR for 12 months - NO balance transfer fee | By Invitation (Thanks jaxstraw) | PenFed Promise Visa - 0% promotional APR balance transfer rate for 12 months - NO balance transfer fee |
Secured Credit Card | nRewards Secured Mastercard | Not Currently Available | None Available |
No Foreign Transaction Fees | All CCs with no FTFs | All CCs with no FTFs | PenFed Gold VISA Penfed Promise VISA |
Lowest % New Auto Loan | Up to 36 mos. APR as low as 2.99% | Up to 36 mos. APR as low as 2.89% | Up to 36 mos. APR as low as 2.49% |
Lowest % Used Auto Loan | Up to 36 mos. APR as low as 3.99% | Up to 36 mos. APR as low as 3.24% | Up to 36 mos. APR as low as 3.49% |
Mortgages | 30-Year Conventional Loan 3.375% APR | 30-Year Conventional Loan 3.649% APR | 30-Year Conventional Loan 3.601% APR |
Free FICO Score | Equifax FICO 9 | Experian FICO 8 | Equifax FICO 9 |
Experian Credit Boost | Not Supported | ? Data Points Appreciated | ? Data Points Appreciated |
Free Credit Monitoring | None | Experian Credit Monitoring and Credit Report | None |
Early CD withdrawal penalty |
Future Edit
Fantastic Topic...thanks @Medic981
@Medic981 wrote:
Pentagon Federal Credit Union (PenFed)
- Money market certificates, PenFed’s version of a certificate of deposit, earn competitive APYs, up to 2.50%. They function like standard share certificates, the term used by most credit unions.
Keep in mind that breaking PenFed Certificate requires you to write a letter to the credit union. It can't be done online. Furthermore the lengauge is not very straight forward. But it looks like if you break a 1 year CD prior to 1 year then you loose all dividents. If you break a 2 year CD, you loose entire 1 year of dividents plus 30% of total dividents you would have earned.
I would avoid their CDs unless you are 100% sure that you will not withdraw your principle.
I copy and pasted their terms below. It would be nice if you compared these terms to those of USAA and Navy. I don't have the latter.
All requests for early withdrawal must be in writing. In the event of early withdrawal, one of the following penalties shall apply: 1) Six-month Money Market Certificates. a) If redeemed within 90 days of the issue date or any renewal date, all dividends will be forfeited. b) If redeemed thereafter, but prior to the maturity date, dividends for 90 days will be forfeited. 2) Certificates Having a Term Greater Than Six Months. a) If redeemed within the first year, all dividends will be forfeited. b) If redeemed thereafter, but prior to the maturity date, the early withdrawal penalty will equal 30% of what would have been earned if the certificate had been held to maturity, not to exceed total dividends earned 3) Exceptions. The penalties described above will not be applied if the redemption is made: a) Subsequent to the death of any holder of the certificate; b) As a result of the voluntary or involuntary liquidation of the credit union.
@Green456 wrote:
@Medic981 wrote:
Pentagon Federal Credit Union (PenFed)
- Money market certificates, PenFed’s version of a certificate of deposit, earn competitive APYs, up to 2.50%. They function like standard share certificates, the term used by most credit unions.
I would avoid their CDs unless you are 100% sure that you will not withdraw your principle.
As with most, if not all financial institutions, the earlier you withdraw money from your CD, the less interest you’ll earn. And in most cases, you’ll also have to pay some sort of penalty. I would avoid ANY CD or Share Certificates unless you are 100% sure that you will not need to withdraw your principle.
My Emergency Fund is 100% funded (6 months of expenses) in a PenFed Premium Online Savings Account earning 1.80%. My excess funds are in an NFCU share certificate. I am getting a great rate of 3.50% APY on that money. If my Emergency Fund runs dry, then and only then would I withdraw money from this share certificate.
Great information! Thank you for taking the time to piece this together. I would like to add my $0.02:
USAA:
You list as a con that USAA is restricted to individuals with military affliliation. I feel this is a Pro! NFCU has become the town bicycle ever since they opened the floodgate to membership in 2017. It seems most people my age and older either served or had a grandfather or father (or grandmother/mother) that served in WWII, Korea or Vietnam and now even Desert Storm; thereby making a large segment of the population eligible for membership. I'd like to see NFCU require that one without personal military experience join through an exisitng member that does have military connection. i.e. dad served-great, he can join NFCU and then you join through him. But I digress. Basic point, I like that USAA is not open to all and I find that to be a pro.
PenFed:
There are more cons than pros in your assessment. I have to agree that of the three, they are my least favorite; however, I think they are deserving of the following Pro's:
-The only one of the three to offer a true, easily accessed, Personal Line of Credit (PLOC) NFCU's is a CLOC and USAA doesn't offer one.
-For many but not all members-quarterly, SP approvals for credit (YMMV-hello Turbo Tax!)
-Offers the best unsecured personal loan rates of the three, provided the member has excellent credit at 6.49%
And finally,
NFCU:
-You list the regular share (savings) rate of 0.25% to be a con. If we compare apples to apples, NFCU's regular, share (savings) rate is quite high. Most banks and credit unions are well under 0.15%. If one wants a higher rate than they should open an online savings account or open a CD. Therefore, I would consider NFCU's regular, share (savings) rate to be a Pro or at least should not be listed as a con.
Please take my suggestions as just my thoughts and not a criticism of the hard work you have put forth here.