Certificate and Credit Card Deals at Pentagon Federal Credit Union - Available Nationwide

Update 12/02/09: There's a new CD rollover program. Refer to this post for the details.

Update 12/01/09: The CD Rollover Subscription Promotion has been cancelled. The PenFed board approved a 0.25% rollover bonus for all certificates maturing in January with terms of 3, 4, 5 and 7 years. Note, I'm still checking with my PenFed contact regarding some more details to see if there's any chance of the originally advertised rates being available.

For those who opened the 6.25% CDs three years ago that mature in January 2010, PenFed has a good deal for you. PenFed is offering the following roll-over CD rates:

• 4.25% APY 7 years
• 4.00% APY 5 years
• 3.50% APY 3 years

These rates are listed at PenFed's Certificates Reservation page as of 11/20/2009. The page states that this offer expires when $250 million has been reserved or on 1/31/2010.

For those who opened a 6.25% APY CD that was longer than a 3-year term, congratulations on your decision to go with the longer term.

Unfortunately, if you don't already have a PenFed CD that matures in January, you won't be able to take advantage of this deal. Nevertheless, this promotion is a feature you might want to consider if you're not yet a PenFed member. Many institutions (mostly banks) only give the best rates to new customers. It's nice to see an institution that rewards its existing customers with the best rates.

Update 11/23/09: I asked my PenFed contact to see if any exceptions could be made for those who have CDs maturing in December or February. Here is the reply:

Your email inquiry regarding our Rollover Certificate Promotion was reviewed by upper management today with much thought and consideration.

It was concluded that PenFed will in all likelihood extended the promotion to February 2010, but it will depend on what January's demand for this promotion looks like before a final decision can be determined. At this time, PenFed will not be including certificates that mature in December 2009 as part of this promotion

The above rates are much higher than PenFed's normal CD rates. The best deals are the 3-year and 5-year rates which are a full percentage point higher. The 7-year CD is just a little bit better. Below are PenFed's current CD rates as of 11/20/2009:

• 4.00% APY 7 years
• 3.00% APY 5 years
• 2.75% APY 4 years
• 2.50% APY 3 years

It's important to note that the 7-year CD has an early withdrawal penalty equal to one year of interest. Terms from 3 to 5 years only have a 6-month penalty. If you have PenFed's IRA CD and you're over 59½, you can be exempt from most of the early withdrawal penalty (see post).

For more details about PenFed's CDs and joining PenFed, please refer to this PenFed review post. Details of the CDs are available in the second page of PenFed's account application.

Credit Card Deals - New AMEX Card

PenFed just announced its new Travel Rewards American Express Card. Cardmembers who spend $650 within the first 90 days will earn 20,000 bonus rewards points (which can be worth around $200). The standard rewards that you can earn include:

• 5 Points for every $1 you spend with airlines
• 3 Points for every $1 on dining and hotels (until 12/31/2010)
• 1 Point for virtually every dollar you spend anywhere else
• No limit to the points you can earn

Note, there is an annual fee of $50 that is waived for the first year (see disclosure). Refer to this FW thread for more discussion on this card. Other good AMEX reward credit cards include those from Fidelity, Citi and Costco.

PenFed has long had one of the best cash back credit cards with 5% cash back at gas pumps, 2% cash back at supermarkets and 1.25% cash back elsewhere (see review).

Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (NMFA). Please refer to How to Join Overview Page for details. Joining NMFA and Penfed can be done at the same time all online. The yearly membership for NMFA is $20, but your membership in the association does not need to be maintained to continue as a Penfed member. You can also be eligible to become a member of PenFed if you are an employee or volunteer of the American Red Cross (refer to this PenFed page).

Branch Locations

Accounts can be opened online, but for those who prefer branches, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

Financial/NCUA Info

PenFed's ratings for safety and soundness are no longer the best, but they remain respectable: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 6/30/09 financial data.

PenFed is one of the largest credit unions in the US with $13.4 billion in assets and 889,874 members. It's federally insured by the NCUA (Charter # 227).

Other High Certificate of Deposit Rates

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