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

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Pentagon Federal Credit Union
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
  Tags: New York, North Carolina, Texas, Virginia, Pentagon Federal Credit Union, Colorado, CD rates, Maryland, New Jersey, IRA rates

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Comments
43 comments.
Comment #1 by Roadrunner (anonymous) posted on
Roadrunner
isn't the current consensus that rates will rise before 3 years?

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Comment #2 by Julio (anonymous) posted on
Julio
I’ve had the Visa card for about six months now and it’s without doubt the best cash back card available. In addition to the standard cash back, they offer promotional cash periods. Two of the most recent were 5% for airline and 5% for back to school (which included anything on Amazon.com) I got 5% back when I purchased my new HD TV from Amazon, along with all my other Amazon purchases. You also get 2% at Wal*Mart regardless of what you buy. I recently replaced my tires and car battery at Wal*Mart and got 2% off. (btw, wm car batteries are a consumer reports best buy)

Now PenFed is offering 0% for six months on any electronics purchased from Black Friday through the end of the year. Defiantly my favorite card.

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Comment #3 by Anonymous posted on
Anonymous
to apply for the amex card, do I have to be a PenFed member?

Also, what can the points be redeemed for? Can the 20000 points be redeemed for $200 gift cards?

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Comment #4 by Anonymous posted on
Anonymous
So a good customer who has a certificate that matures in February gets no incentive to renew? We shall see if PenFed gives me a yield bump if I want to renew my certificate that matures 2/11/2010. Last February they gave a .25% bump if you renewed a certificate.

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Comment #5 by Anonymous posted on
Anonymous
For PenFed Amex:
It's not very clear what 20000 bonus points can be redeemed for.
There is a limited # of gift cards listed(nothing really valuable). Seems like AA miles are the only type available. 10000pts = 10K miles.
Website mentions that 20000 points is enough for roundrtip ticket within US, but there are no details provided.

Julio, I have a question about PenFed Visa: how often do they run their cashback promos?

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Comment #6 by Anonymous posted on
Anonymous
The Schwab credit card is still the best cash rewards card. 2% cash back on everything, no limit, no tiers. I combine it with my USAA credit card to get an additional 1-5% off online purchases. Of course not everybody can get a USAA card.

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Comment #7 by David (anonymous) posted on
David
Just to clarify, although the PenFed reservation page you linked to does not mention the "cd maturing in January" requirement, they are requiring this in order to make the reservation. CSR apologized and said it should have been on the page.

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Comment #8 by Anonymous posted on
Anonymous
.


Err ... overall I guess PenFed is cutting it a little too close.

They are offering 5/1 and 5/5 ARM at 4.50% ... and they are offering 5 year CDs for 4.00%.

... So if one were to pair-up the CD assets that CU is borrowing from depositors, and the ARM assets that the CU is lending to the debtors, then the spread is too little ...

I know ... I know ... the pairing up does not go hand-in-hand like that ... however there is a loose link between the assets the CU gets from depositors and the assets it lends out to the debtors.


... Should be interesting to see how the thing plays out ...


.

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Comment #9 by Anonymous posted on
Anonymous
.


BTW ... I got to compliment PenFed on the idea of reservation ... They need an exact amount ... So that are going the route of making a CD reservation ... Nice idea ...

Hmm ... A win-win for both the depositors and the CU. The depositor gets an assurance of the rate well in advance ... and the CU gets an assurance of the assets that it will be retaining ...

.

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Comment #10 by Anonymous posted on
Anonymous
That is precisely why most credit unions are better than banks. They look to offer lower borrowing rates to their members while at the same time try to give a decent interest rate on savings and CD deposits.

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Comment #11 by Anonymous posted on
Anonymous
.


>> That is precisely why
>> most credit unions are better
>> than banks.


Err ... better is quite a subjective matter ... For a hypothetical Military person (which both PenFed and USAA serve) perhaps USAA's deposit@home feature will make the bank better than the CU. For a hypothetical Business-person who travels a lot in US and UK, convenience of maybe Citi and/or HSBC will make the banks will make them much better than CU.

... Like I wrote ... it is subjective. One reasonably cannot paint one better than the other.

Oh ... I use banks and CUs both and put the 'better' features they offer to use per my requirements!


.

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Comment #12 by Anonymous posted on
Anonymous
There is a need for both, but:

Most credit unions look out for their members.

Most banks look out for their selves.

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Comment #13 by Anonymous posted on
Anonymous
.


>> Most credit unions look out for their members.

>> Most banks look out for their selves.


Indeed ...

And most depositors look out for their selves.

.

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Comment #14 by Anonymous posted on
Anonymous
The credit unions especially in this recessionary environment seem to have the best saving rates along with services. The fees are normally lower too with a credit union.

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Comment #15 by Anonymous posted on
Anonymous
.

Actually ... I got to compliment PenFed one more more point. They are offering something extra for the already existing depositors for renewal ... Shows their commitment ...


.

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Comment #16 by RJM (anonymous) posted on
RJM
Im not clear...can I JUST renew the amount of the 6.25% CD or are extra amounts allowed ?

Theres NO PENALTY for changing your mind prior to purchase.

Total certificate promotion amount: $250,000,000.00


Reservation Period: 11/15/2009 - 1/31/2010 or until the promotion amount is depleted
Certificate Funding Period: 1/1/2010 - 1/31/2010


Total funds available as of 11/20/2009 3:08:20 PM Eastern:
$242,262,628.64


PS, I can also confirm that I get 2% back on ALL walmart purcahses and have for years with my penfed visa.

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Comment #17 by Anonymous posted on
Anonymous
I just call PenFed and they told me that this offer is ONLY for renewals. No new money is allowed. The CSR stated that they will need to clarify this on their website. It was very easy to lock in this rate, about 3 minutes of my time. Also, in the very rare event that they offer a higher interest rate, one is allowed to call and request the higher rate. However, I don't think this will happen.

1
Comment #18 by Anonymous posted on
Anonymous
.


Okay ... I did the reservation ... was easy ... I have many certificates maturing in Jan, so had to reserve one-by-one ... And each time the amount that PenFed has kept going up ...

Hmm ... Looks like they are going to get their 250 million very soon ...

.

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Comment #19 by RJM (anonymous) posted on
RJM
Help me decide between a 3 year and a 5 !

Not locking in 7 years at 4.25%. If rates stay that low for that long times WILL be tough.

I also have 2 more 6% CDs, with larger $ amounts coming due in Sept & Oct.

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Comment #20 by Anonymous posted on
Anonymous
To: 1:02 PM, November 20, 2009

In my opinion, take the three year rate. When (not if) inflation hits we will be able to get higher rates. This is only my opinion and what I did with my CD's.

Hope this helps.

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Comment #21 by Anonymous posted on
Anonymous
It's great for those having CDs coming due but leaves those of us who would invest new funds saying to themselves "why bother with PenFed - I will go somewhere that will just give me a good deal and not penalize because I don't have CDs renewing."

That's my personal take on it. Now they can be sure they won't get any funds from me now or anytime in the near future.

I will just find a deal someplace else!

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Comment #22 by Anonymous posted on
Anonymous
No one knows when interest rates will be rising again. It could be 1,2,3,4, or 5 years or more from now. That's why it's prudent to ladder your certificates and not try to outguess Chairman Bernanke and the Fed.

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Comment #23 by Anonymous posted on
Anonymous
.


>> I will go somewhere that will
>> just give me a good deal and not
>> penalize because I don't have CDs
>> renewing.


Penalize? Nah ... PenFed isn't penalizing you.

PenFed is merely offering the existing depositors whose deposits are maturing during certain period an "incentive".

Penalty and Incentive are entirely different things. Incentive is something like a higher interest rate to renew, Penalty is something like 3 months interest as an early withdrawal penalty.



>> I will go somewhere that will
>> just give me a good deal
and not
>> penalize because I don't have CDs
>> renewing.


Definitely ... that's your right.


.

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Comment #24 by Anonymous posted on
Anonymous
.


>> No one knows when interest rates
>> will be rising again. It could be
>> 1,2,3,4, or 5 years or more from
>> now.


True ... Japan has a history of near 0% interest rate for a nearly a decade! It is possible that same will happen in US.

.

1
Comment #25 by Anonymous posted on
Anonymous
Since there's no penalty for cancelling your reservation before the new certificate is purchased, I went ahead and made a reservation for two CD's I have maturing in January.

There's still more than $240 million available, but I guess the rate at which the balance declines will accelerate as more people become aware of the promotion.

For those deciding between 3 years or 5 years ... if you take 4% APY for 5 years and pull your money out after 4 years, the net result is like having a 4-year CD at around 3.5% APY. I decided to go for 3 years and hope rates increase by that time.

Right now, it's hard to get more than 3% APY for 3 years from anyone.

Only your CD's that mature before the end of January are eligible for these promotional rates, and you have to roll over the entire maturity balance.

1
Comment #26 by Anonymous posted on
Anonymous
Re: Roadrunner said...
isn't the current consensus that rates will rise before 3 years?

7:19 AM, November 20, 2009

This week, the head of the Fed's St. Louis branch, James Bullard, caused a stir when he suggested that the central bank might wait until 2012 to begin lifting rates.

Bullard didn't say that the Fed would wait that long, but he noted that after the last two recessions (1990-91 and 2001) it took 2 1/2 to three years before policymakers began to tighten credit. If the recession that began in 2008 ended last summer, the timetable of the last two downturns would leave the Fed on hold until the first half of 2012.

1
Comment #27 by Anonymous posted on
Anonymous
Only your CD's that mature before the end of January are eligible for these promotional rates, and you have to roll over the entire maturity balance.

By Anonymous, at 10:22 PM, November 20, 2009


I called and asked about the FULL amount of the CD having to be reinvested.
The PRINCIPAL amount has to be renewed but you can ask for the accrued interest returned to you.

On the day the CD is to be rolled over call them and they will adjust the CD to show only the principal going into the special CD.Of course you can have the whole amount roll if you desire.

1
Comment #28 by RJM (anonymous) posted on
RJM
I just reserved mine for 3 more years.

Shows 3.49% while the ad says 3.50%

Also it shows the accounts CURRENT value to be reinvested but actually, by the time Jan. gets here it should have some more interest accumulated.

Was REALLY easy to do. Im talking 30 seconds after signing in.



3 YR Money Market Certificate Pending 3.44% 3.49% 01/09/2010

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Comment #29 by RJM (anonymous) posted on
RJM
Actually, it figures the amount it will be at maturity and gives it to you, somewhat higher than the amount automatically entered.

1
Comment #30 by Anonymous posted on
Anonymous
Can this be done on line or does a member have to personally call Penfed and talk to a CSR.

1
Comment #31 by Anonymous posted on
Anonymous
To the poster above who wrote:
"It's great for those having CDs coming due but leaves those of us who would invest new funds saying to themselves "why bother with PenFed - I will go somewhere that will just give me a good deal and not penalize because I don't have CDs renewing."

You're pretty much missing the big picture. Yes, apparently, you can't take advantage of this particular PedFed promotion.

But, Penfed's 5 and 7 year CD rates, and particularly their 4% 7 year CD, are among the best available in the market these days...and those are open to everyone.

PenFed is a large and quality credit union with good customer service and a history of high rates. You'd be smart to place your money with them, regardless of the promotion.

1
Comment #32 by Anonymous posted on
Anonymous
As a very happy member of Penfed for several years now, I certainly agree with the 7:54 PM post.

1
Comment #33 by Anonymous posted on
Anonymous
You say, "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." And I entirely agree. I have ended banking relationships when the "new money" gets better rates than existing, loyal customer. I removed $150K recently from ING when they offered a new money premium that I was not allowed to take advantage of.

1
Comment #34 by Anonymous posted on
Anonymous
FYI, PenFed mistakenly sent notices of eligibility to some people. I have a CD maturing on 12/29, and I received a yellow sheet about this promotion. However, when I called the CSR told me they'd goofed up. He was very apologetic, but was unable to offer me any of the promo rates.

1
Comment #35 by Banking Guy (anonymous) posted on
Banking Guy
I've asked my contact at PenFed if they could make some exceptions for those who have CDs maturing near January. She's checking on it. I'll keep you posted.

1
Comment #36 by Anonymous posted on
Anonymous
Just reserved my certificate to replace my CD that matures in January on-line. Very simple process. The confirmation e-mail says you can make changes, if you wish, right up until the reservation date.

Just my thinking, but if Penfed does not reach their reserved limit by January, they may open up the criteria a bit.

1
Comment #37 by Julio (anonymous) posted on
Julio
@9:46 AM

The airline promo was this past summer and the back to school ended a few weeks ago and the 0% starts this week. I don’t know how frequently they offer these promos or what other categories they offer because I haven’t been a member that long, but I did enjoy both while they lasted. Any other PenFed Visa holders in here that might know of other promos?

1
Comment #38 by Jacky (anonymous) posted on
Jacky
I was trying to open a couple CD accounts, but I saw the comment that mentioned "No new money is allowed."
Is that true? Can anyone confirm?

1
Comment #39 by Anonymous posted on
Anonymous
I believe the "No new money is allowed." comment is pertaining to the special reserved CD offers for current CDs maturing in January 2010.

1
Comment #40 by Rich (anonymous) posted on
Rich
I tried to make a CD reservation this evening, but the website indicated that the promotion is finished and wouldn't accept an app.

1
Comment #41 by Anonymous posted on
Anonymous
You're right.

I tried this morning and got the same message. The promotion has ended and is no longer available.

1
Comment #42 by Anonymous posted on
Anonymous
Kind of odd that they pulled the offer so fast.

And will they honor it for those that accepted?

1
Comment #43 by Anonymous posted on
Anonymous
If you were lucky enough to sign up the rate will be honored. It sucks that the rate was pulled so d@mn quickly.Guess enough members got ****ed off from being out of the box.
My take on the promo? FUBAR!!!

1