Dedicated to Deposits: Deals, Data, and Discussion

Update on Penfed's 6.25% CDs

POSTED ON BY

There are only three more days left for Pentagon Federal Credit Union's 6.25% CDs. This rate will likely go down on February 1st. For more info on Penfed and these CDs, please refer to this post.

I just opened another 6.25% CD online today at Penfed. One important change that I noticed in the application is that the maximum deposit allowed for funding from another bank is now $25,000 instead of just $10,000. I've heard that the $10K cap is removed after being a member for 6 months, but I've only been a member for only about 4 months. So I assume this change applies to everyone.

The maximum deposit by funding with a credit card remains at $10K. Be careful about this option. You never know when your credit card company may decide to charge you a cash advance fee.

The third option to fund the CD online is by transferring the money from your Penfed savings acocunt. There is no cap listed for this option. A reader made the good point that this can be an easy way to fund the CD online without any cap. Just do an ACH push of your money into the Penfed savings account from your other bank. Then you can fund the CD without any problems. I haven't done this so I don't know if there could be any complications. Also note that many banks can take 2 or more days for an ACH transfer to complete.

Readers have also mentioned that they've opened the CD by phone and did not have any deposit cap. If you're worried about opening this CD before Thursday, I suggest contacting Penfed. The CSR should be able to provide you with the best options.


Comments
15 Comments.
Comment #1 by Anonymous posted on
Anonymous
My experience with PenFed so far:

I applied to be a member with PenFed online in December, the day their new rates were announced. I joined their family organization for $30 since I'm not active/retired military. After two weeks had passed I finally received their signature card and correspondance in the mail. I sent it back, and never heard anything from them.

Called and talked to a CSR. He told me they hadn't received it, and the only way to get the account opened was to fill out another signature card and send it in, which I did. Certified Mail. I received a notice from penfed to "check my account for the latest statement" but that is kind of hard to do without a member login and PIN. Tried to call them on Friday, got put on hold for eternity, so I sent in a note using their online system. No response thus far.

Having had experiences with joining ING, GMAC, Eloan, Capitol One, DIME, and TreasuryDirect, I'd have to compare PenFed to a pile of dog crap. Its almost like they don't want you joining so they can minimize the amount of people that are able to take advantage of their rates. Its been a month and I still cannot login or purchase these supposed 6.25% cds.

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Sorry to read about your problems with Penfed. I have a feeling the high demand for these CDs may be hurting their customer service. I didn't have problems when I joined in September. Please refer to my post about joining Penfed. But it should be noted that they've made changes recently on their password system. So the online sign-up process may now be different.

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Comment #3 by Anonymous posted on
Anonymous
I opened a share savings acct online on Friday and received a PIN hours later. I was able to open a Money Market Cert with the PIN. I funded the Cert with an ACH push. Checked my bank and the money is still there. I don't know how long it will take to get the money over. That makes me nervous that I may miss the deadline.
What about the signature card? Do I have to return it before 2/1 to get the 6.25%??

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Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
I believe that if you open the CD online or by phone before the end-of-day Wednesday, you should get the 6.25%. The CDs that I've opened online have the initial date as the business day of when the application was done. It's also noted online with the APY of 6.25%. So I don't think the sig card needs to be signed and returned before 2/1.

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Comment #5 by Max (anonymous) posted on
Max
From what I gather, the way the PIN system works is tricky. If you join through a family member or if you are affiliated with the Navy, you should be able to set up your PIN either at the time of application or shortly after. If you pay the 25 dollar fee to be a member I believe you have to wait for them to send you a PIN in the mail because you cannot set it up while opening the account.

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Comment #6 by Anonymous posted on
Anonymous
I filled out the application and mailed a check for the funds by priority mail 1/23. I tracked the letter and it arrived 1/25. After that point I kept checking with a CSR because it wasn't showing up on my internet account. I re called again this morning and was asked for my tracking number. Yahoo, it finally showed up on my account a few minutes ago and was dated 1/25.

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Comment #7 by Anonymous posted on
Anonymous
Is it safe to use ACH?? I've heard before EFT is risky. Can someone share some info on how this work?
Will your source bank requests additional info from the client before pushing the money to another financial institution?? How does the process work?

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Comment #8 by Banking Guy (anonymous) posted on
Banking Guy
About ACH, here's a good reference on it at google answers.

It's the same transfer system businesses use to make direct deposit to your bank accounts.

The only bank that I know that blocks an ACH debit is ING Direct. There may be others. I've done ACH debits from a dozen banks without a problem.

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Comment #9 by Anonymous posted on
Anonymous
We can't thank you folks enough for the information via this web.

We opened six CD accounts with more than 10k or 25k over the phone.

Simply, you open a standard account, then bank wire the funds to that account. Then we were told to call PenFed back and open the 6 accounts. It cost $0. We are extremely happy with the service.

These folks are truely tops. Just FYI, I was informed that PenFed will have a higher rate beginning in the Nov-Dec timeframe (as is customary).

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Comment #10 by Anonymous posted on
Anonymous
Based on this website, I recently opened a cd. I first called Penfed. To pay the $25 fee for (NMFA) organization, rather than paying to PENFED and wait for 2 days to get the PIN, as well as to avoid the possibility of "cas advance", the customer service suggested that I call NMFA directly. I became a member by doing so over the phone, paid the membership fee by credit card, and immediately got a PIN number. I then called PENFED,the customer service immediately erolled me, with that PIN number. Then, immediately I wrote a check, along with application for a CD, + $5 savings deposit, I mailed my application. During my phone enrollement, the rep also gave me a password, which I was able to use to access my acct online, and then change my password. I found the response positive. My acct became online, 3 days after I mailed my check.

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Comment #11 by Anonymous posted on
Anonymous
I posted the first comment on Jan 28th at 4:58p.m. Here is a followup to my experience with this credit union. Firstly, the response from their automated system was as follows:

Thank you for contacting Pentagon Federal Credit Union.
-----------------------------------
During this time we are not staffed to call out, please contact a Member Service Representative at 1-800-247-5626, (541) 225-6700
or 510-376-7328 from a Class A DSN phone line. Representatives are available 24 hours a day, 7 days a week for your convenience.
-----------------------------------

So on Monday I called and spoke to a customer service representative once again regarding the problems and delays I've had. They initially offered to create the CDs for me over the phone using ACH pull from my checking account. They asked the amount I'd like to transfer, I told them $75,000, split three ways into a 3, 4 and 5 year CDs. At that point they suggested I send them a wire transfer and fax in a money market share certificate form, because they have a limitation of 25,000 per day using ACH. I asked if they could go ahead and do one 3-year CD and they acted like they'd rather not do it now, and just suggested I do the wire transfer. Fine.

So Tuesday I sent to my Penfed account # and the correct routing number a wire transfer for $75,000. It left my checking account on Tuesday night. It cost me $25.00 for the outgoing wire fee with my local bank.

Wednesday afternoon I faxed three share certificate forms in. Three hours later I called and spoke to a customer service rep to confirm they had received them. He stated they did receive the forms but had not yet received the wire transfer. He stated if they did not receive the funds by midnight, that tomorrow they'd go ahead and open three CDs for me for whatever new rates are established. This is totally unacceptable after all the delays I've experience, even now after over a month I cannot access my account - and they received my second signature card mailing on Tuesday.

I think I'll probably pull a chargeback on them for the initial $30 due to services not rendered, and tomorrow I'll have the funds bounced back to checking and try to close my penfed account.

Sometimes it makes sense to deal with a more reputable bank even if the rates are worse, rather than go through the stress and headache of an out of state credit union. What really surprises me is how many other positive comments there are with PenFed, I don't get why I've been ****ed over.

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Comment #12 by Anonymous posted on
Anonymous
I first opened an account with Penfed one year ago and opened two CD accounts, thanks to this site. Have had nothing but a positive experience with them.

Just this month I opened two more personal CDs and also opened a IRA account with them and transferred a considerable amount of money from another financial institution into it and then opened an IRA CD. No problems at all.

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Comment #13 by Anonymous posted on
Anonymous
Wow, they didn't go to around 6 (except the 7 year one) as some of the csr's thought. They went down to 5.5 for 3 and 4 year and 5.75 for 5 year.

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Comment #14 by Banking Guy (anonymous) posted on
Banking Guy
Anonymous, sorry to read about the problems you experienced with Penfed. Thanks for describing the issues you had. Looks like the $25K cap on ACH applies to both online and over the phone. I had thought Wire Transfers had almost no delay. Perhaps Penfed's system to receive incoming wire transfers has an issue.

The rate drops are disappointing, but I guess should be expected since the 6.25% were so much higher than the market rates. I just did a new post on this here.

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Comment #15 by Anonymous posted on
Anonymous
Last week I wired 32000 to Penfed one afternoon. Called them next day and they verified it was there.
Their receiving incoming wire was no problem. I suppose someone could have a problem though with the outgoing bank/CU too.

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