Update 10/13/07: The 3, 4, 5 and 7 year CD rates are now 5% APY.
Pentagon Federal Credit Union (PenFed) continues to offer 6% APY on its money market certificates with terms of 3 to 7 years. As I mentioned in my last week's PenFed post, these CD rates will likely not last the entire month as the rate table may lead you to believe.
I purchased a 3 year CD last Sunday (9/30). Since I've been a member for about a year at PenFed, I just had to log into my account. From there it was easy to open and fund a CD online. PenFed gives you 3 choices to fund the CD:
- credit or debit card - $10K max - PenFed notes that this will be considered a cash advance on your credit card
- Electronic funds transfer (ACH) from an external savings or checking account - $999,999 max for those who've been members for over 6 months, $25K for new members
- Transfer from another PenFed account - no maximum listed
If you're a new member and want to open a CD with more than $25K, you can always open additional CDs. Also, you can always transfer the money into the share savings account either by wire transfer or an ACH transfer initiated at your other bank. Readers also mentioned being able to open a CD by phone without these limitations.
I chose to use the ACH transfer and pulled the funds from my GMAC money market account. The CD was opened immediately and was listed in the CD summary page. The ACH wasn't debited from my GMAC account until today (10/3).
One feature that would improve this process in my opinion is if PenFed added account verification with trial deposits to make sure that the external account you specify is the correct account. I'm not sure what would happen if you gave the wrong account number. In the terms, PenFed does state that they'll apply a fee for any rejected ACH requests.
For more info on PenFed and these CDs, please refer to my last week's PenFed post.
For questions about maximizing your NCUA coverage, please refer to the NCUA Insurance Estimator.