Dedicated to Deposits: Deals, Data, and Discussion

Penfed's CD Rates Drop More Than Expected

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As expected Pentagon Federal Credit Union lowered the rates today on its CDs (what Penfed calls Money Market Certificates). The 6.25% yields are over. There were rumors that the new rates would be 6%. Unfortunately, only the 7-year term has a 6% APY. The 5-year CD APY dropped to 5.75% and the 3 and 4 year CD APYs dropped to 5.50%. The shorter term CD rates remained the same low rates as before. These new rates are effective through February 28th.

Even though these are large drops, the CD rates are still competitive compared to other banks and credit unions. For example, the best APY for a 3-year CD currently listed at Bankrate.com is 5.40% (from Netbank).

One note regarding the 6% 7-year term CD is that it has up to a one-year early withdrawal penalty. If you do an early withdrawal before the first year, you forfeit all interest. After the first year, the penalty equals one year of interest. It's a large penalty, but at least it doesn't eat into the principal. For the full details of these CDs, please refer to the second page of Penfed's Money Market Certificate application (pdf), and for more discussion on Penfed CD's please refer to this previous post.

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Comments
6 Comments.
Comment #1 by Anonymous posted on
Anonymous
Yay, i got in just in time last evening. :)

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Comment #2 by Anonymous posted on
Anonymous
Sorry got the 5yr rate term wrong there banking guy still I like the fact they have the specials now and then this way Im allready a member no waiting for mail stuff or they dont allow just joining of the NMFA to gain membership Thanks again Duck

1
Comment #3 by Anonymous posted on
Anonymous
The agents told me that they were flooded with checks and several days behind, but backdating the certificates.

For some odd reason, they are now offering special deals on loans :)

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Comment #4 by SVG (anonymous) posted on
SVG
Banking Guy,

Well ... as expected yields dropped.

However the 'cycle' continues ! Surely some other Banks/CUs will offer something 'better' than what's available ... and we'll have to be on the lookout for what they offer !

- SVG

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Comment #5 by Anonymous posted on
Anonymous
Given the good experience opening a CD, I went ahead and opened their 5%-Cash-Back-on-Gas Credit Card. However, they have only paid a lower 1.25% rebate on all the gas purchases on the first two statements. When confronted, they said that none of the gas stations used the right code to flag those purchases. I am having a hard time believing that both gas stations I used would make a mistake. Furthermore, my Citicard Dividend CC hasn't had a problem identifying these purchases and paying the correct 5% Cash Back. Oh well! I guess I will revert to using my Citicard for my gas purchases. Is my experience an isolated case?

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Comment #6 by Banking Guy (anonymous) posted on
Banking Guy
That would be quite frustrating. Like you said, I would think gas stations would be easy to recognize. I'll have to look in to this.

1